Beware the Jabberwock of Affiliate Marketing – By Brad Elbein

by Jenae Reid on December 13, 2017

10 Shares

For Lewis Carroll in Alice in Wonderland, jaws that bite and claws that catch meant the fearsome beast called the Jabberwock. But for affiliate marketeers, the Jabberwock is federal and state regulators—and they’re after you. The recent increase in their enforcement actions reveal some new trends that spell trouble for the affiliate marketing industry.

Much of the enforcement is focused where you’d expect it.  But there are four new developments that the affiliate marketing industry needs to pay attention to.

First, the FTC has been ramping up enforcement, and is on track to file more cases against the affiliate marketing community than in any year in recent memory.

Second, the FTC is showing an increasing will to target individuals. Not just individuals who are owners of the companies: they’ve dipped down to the level of company officers and even “managers.”

Third, the FTC has shown a new interest in suing a widening swath of service providers. Now endorsers, influencers, call centers, and even fulfillment centers are in the crosshairs. This year they even targeted sales agents and sub-ISOs. In one case, the FTC described its focus as anyone who either disseminated or caused to be disseminated deceptive webpages. If you think that phrase could encompass the advertisers, publishers, networks, and service providers that make up the affiliate marketing world, you’re right.

Finally, the most important new development is the increased use of ROSCA. The Restore Online Shoppers’ Confidence Act was passed in 2010, but has only in the last few years become the FTC’s big weapon. ROSCA is too complex to fully explain in a short article, but there are two things you should know.

To begin with, the statute severely restricts “data pass” transactions. These transactions are declared illegal unless they provide extensive disclosures to buyers—disclosures by both the the initial merchant and the third-party merchant receiving the “data pass.” Consult with an attorney to learn how to craft these disclosures.

More importantly, the statute prohibits negative option programs that do not include clear and conspicuous disclosures about the details of the program, fail to obtain express informed consent from the buyer, and do not provide simple cancellation mechanisms. These requirements place a cloud over many of the currently offered affiliate marketing programs. Again, consult an attorney.

What can you do in the face of this aggressive enforcement push? Compliance! Compliance! Compliance! Make sure your programs, advertisements, and procedures are compliant with current law.

Address customers’ complaints immediately. Respond quickly and professionally to regulators’ inquiries. Make sure your service providers comply with the law and discipline them if they do not.

Most importantly: recognize that advertisers, networks, and publishers (everyone who either “disseminated or caused to be disseminated” deceptive communications) can all be held responsible for violations of federal advertising law—and can make you responsible too.

Compliance: it’s the only way to avoid the Jabberwock, with eyes of flame as it comes whiffling through the tulgey wood… hunting you.

 

 

Brad Elbein is a former FTC director now in private practice and blogging at  linkedin.com/in/bradelbein.

This article appeared in issue 41 of FeedFront Magazine, which was published in January 2018. https://issuu.com/affiliatesummit/docs/feedfront-41

 

Comments on this entry are closed.