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The new FTC Rules Concerning Endorsements & Testimonials
by Chris Farrell
So I am getting a lot of questions Marilyn
(some from concerned folk) about the new FTC regulations.
Firstly — who are the FTC?
The FTC deals with issues that touch the economic life of every American.
Let me say this.
These new rules are good.
Unless you have something to hide.
Uncle Sam wants to make sure the old rules of fairness and transparency still apply.
That’s surely a good thing for us all of us.
As the web continues to grow and evolve – and remember it is still early days in this business — the FTC deem that changes need to be made to preserve a free and open Internet.
So what are these scary sounding changes?
Let me tell you.
OVERVIEW
There are two primary areas covered that could affect us.
They both affect affiliates who use testimonials – and/or reviewers/bloggers who recommend products.
* 1: Using Testimonials. The commission is now saying that advertisers featuring testimonials that claim dramatic results cannot hide behind disclaimers that the ‘results aren’t typical.’
* 2: Using Reviews and Endorsements. The FTC will require that writers on the Web clearly disclose any freebies or payments they get from companies for reviewing their products.
Let’s look at both in a bit more detail:
TESTIMONIALS: Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as’ typical’ – when that is not the case – will be required to clearly disclose the results that consumers can generally expect.
But what does this actually mean?
Here’s a good example that is on Joel Comm’s blog.
Say you offer a product that helps people develop a marketing strategy for the internet. One person vigorously applies the system to a great product, makes $250,000 in the first month, and sends you a testimonial praising your genius.
That’s the truth – for that person.
Another person buys your product, and does a half-hearted implementation and makes $250.
That’s the truth too, but this person doesn’t bother to tell you the results or share their implementation strategy.
As a marketer, what do you communicate to potential customers?
Under the old rules, you could happily post the wonderful testimonial from the wildly successful (and true) customer and capture the aspirations of your potential customers.
All you had to do was post a clear and conspicuous disclaimer saying that the successful customer’s results were not typical.
This “results not typical” “safe harbor” is being removed.
THIS IS THE IMPORTANT CHANGE GUYS!!!!!!!
New Rule: The Federal Trade Commission is changing its guide to eliminates advertisers’ ability to use statements like “Results may vary” as a safe-harbor disclosure that eliminates responsibility to substantiate claims.
This is what David Vladeck who is the head of the FTC’s Bureau of Consumer Protection — has to say on this:
“In the FTC’s review of 300 ads, two-thirds used consumer testimonials. Few showed realistic claims, and disclosures of atypical results were flashed too quickly to read. ‘Results may vary’ does not adequately inform consumers that claims are outliers or extreme cases. They do not disclose results consumers should realistically expect. That is the main problem.”
Misuse has been especially prevalent in weight-loss products.
Vladeck says the revised guides do not bar use of disclaimers — they merely make advertisers responsible for ensuring that consumers are not misled by an ad in its entirety.
Of course, some advertisers are all mad and bent out of shape over this ruling, which is hardly surprising given how some online play fast and loose with the truth (anyone seen the RIDICULOUS Jeff Paul Infomercial for example…) (and don’t start me with Stores Online…)
A few have asked me about the testimonials on the Digi Camera Page.
After reviewing them just now — I see no danger for anyone.
None of the testimonials are making outlandish claims — they are all saying a similar thing — which is ‘I love the book’ sort of thing.
In fact — maybe in a strange premonition kind of way — I have always avoided using monetary testimonials from others that have used my products. Not because I don’t have any (I do) but because personally I don’t like them.
I am happy to use myself as an example — but I never liked marketers who would parade others and say ‘Mary made this using my product’.
I am happy when we hear and share success stories in the Forum — but as a testimonial for a product — I have always stayed away from this.
You will note that most of my testimonials for my products — Digi Camera Cash — Create Your First Website — various ebooks — membership site — tend to talk more of the the ‘human’ side of this business — me ‘getting on the phone and helping someone’ etc etc .
REVIEWS & ENDORSEMENTS for you Bloggers
Do you blog?
Are you trying to make money with your blog by promoting some company’s products or services? If so, you better be careful because the Federal Trade Commission has its eye on you.
The Federal Trade Commission announced that it’s Guides Concerning the Use of Endorsements and Testimonials would be revised in relation to bloggers.
The new guidelines specified that bloggers making any representation of a product must disclose the material connections they (the presumed endorsers) share with the advertisers.
What this means is that, under the new guidelines, a blogger’s positive review of a product may qualify as an “endorsement” and that keeping a product after a review may qualify as “compensation.”
So again — what is this actually saying?
New Rule: It’s saying that if you get money for something — then say so.
I think this is TERRIFIC news.
How many times have we Google a review of a product — we find a review site/blog — it gives the products a great review — and then a ‘click here to buy’ link.
Of course the review is going to be good — there is an affiliate link for it on the page!!!
For this reason alone I do not like Review sites.
I always like to say if I use affiliate links — in fact in many of my videos on this site where I recommend aweber I purposely say in the video that the link ‘below the video is my affiliate link’. Full Disclosure!
( please click here for an example of me doing this)
So bloggers have to now come clean and disclose payments for reviews.
This won’t be hard for me to comply with, since very few people send me free stuff…
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