FTC Places Regulations on Affiliate Marketing
In December 2009, the Federal Trade Commission (FTC) introduced a new set of constrains designed to protect consumers in the Affiliate Marketing industry. With these standards in place, I have decided to remove all current affiliate programs from the website. By doing this I can focus on a narrow set of programs as well as ensure that, I have obeyed all new regulations.
I do plan to continue to promoting Bluehost. The reason for that is because they are my web host of choice, They provide a service that I enjoy, and I will keep telling people that.
Before I outline the new rules, know that I am not a lawyer.
New regulations
You have to be completely transparent about your relationship with people providing endorsements or testimonials.
Advertisers will now be subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose the relationship among themselves and their endorsers. Endorsers also may be liable for statements made in the course of their endorsements.
This rule alone will have a major impact on the industry.
If you have affiliates, the Federal Trade Commission could subject you to liability if they do not follow the rules.
If you are a marketer, working with affiliates you will need to take some steps with these new regulations. You will need to tell all of the existing affiliates that you expect them to be in full agreement with the new FTC regulations as well as reserve the right to drop them as an affiliate and withhold payment if you think that they’re not comply with the new rules.
These new requirements of affiliates need to define in an agreement that not only ensures compliance of regulations but also indemnify you if something they do something results in any FTC legal action.
Actions to take
1. Audit your testimonial-based advertising for compliance with the rules.
2. Adjust your existing advertising campaigns to bring them in compliance.
3. You must also define “Generally Expected Performance” for your products.
4. Require affiliates to complete an application.
5. Revise affiliate-marketing agreements with new regulations.
6. Full Disclosure: Any connection you have with sponsors of products you endorse.
The goal of these new regulations are designed to keep marketers honest.
