The Federal Trade Commission (“FTC”) has taken action in the recent months to target advertisers in the nutraceutical market for advertising deemed misleading. I couldn’t be more thrilled.

This is something that is long overdue and unfortunately, even with the changes that have been made by those who are FTC compliant; the acceptance by most advertisers is slow at best.

The FTC has come down on some continuity program offers for statements claimed in their advertising and have offered guidance to those willing to make the changes on their own.

The advertisers that are in it for the long run have adhered to the requests from the FTC, whereas those that are in it for the short term are making it very difficult to compete.

The company where I work has spent hundreds of thousands of dollars on compliance lawyers and has made the required changes to our landing pages and creative. Unfortunately, we are seeing traffic by some long standing partners and networks redirected to non-compliant offers which continue to convert higher on the front end.

With enough complaints to the FTC from consumers, eventually the non-compliant offers will have their merchant accounts pulled, close shop and reopen within days, peddling a new offer. It’s frustrating to be among those trying to run an honest campaign with a legitimate offer.

It is a never-ending battle to compete with this ongoing problem and until the non-compliant advertisers feel the repercussions of remaining non-compliant, things will not change.

Even though there are no strict laws published at this time regarding compliance, if the networks and publishers are all on the same page with the recent guidelines the FTC disseminated, it would be much easier to rise to the top.

This industry needs a clean, fresh start on how we promote products. As advertisers, we have become accustomed to sky-rocketing CPA’s and higher re-bills on products.

The last thing we need is for a handful of non-compliant advertisers to ruin it for the rest. We, as an industry need to come together and set realistic limits for all to follow.

There’s enough of a market for everyone to have a piece.

Stacey Sicard is the Director of Marketing and Advertising at E4 Media and the founder of TheAffiliateCore.com.

Download the entire FeedFront issue 6 here – http://feedfront.com/feedfront-issue6.pdf
FeedFront issue 6 articles can be found here as well: http://feedfront.com/archives/article00date/2009/06

Over the past few months, the FTC has filed a number of complaints against affiliates for failing to clearly and conspicuously disclose financial terms as required by Section 144 of the Truth in Lending Act “TILA” and Section 226.24 (c) of Regulation Z.

TILA and Regulation Z require that lending entities disclose finance charges and related aspects of credit transactions in writing, that finance charges are expressed as an annual percentage rate, and establish certain requirements for advertisers of credit terms.

TILA, along with other regulations , was created to prevent businesses from engaging in unfair acts or practices, to ensure representations do not mislead consumers and affect consumers’ behavior or decisions about a particular product or service, and to prevent consumer fraud by encouraging business to accurately and honestly represent products and services.

As an affiliate, you may be responsible for compliance with these regulations, particularly when using your own creative or driving traffic to a landing page that you host and maintain.

TILA and Regulation Z in particular, have certain terms that are often referred to as “trigger terms” which when used in advertising, require specific disclosures.

Although some rules apply specifically to lenders, affiliates often use such trigger terms, but then fail to provide the required disclosures. As in the recent complaints filed by the FTC, such trigger terms included:

• Stating the amount or percentage of any down-payment;
• Stating the number of payments or periods or repayment;
• Stating the amount of any payment; or
• Stating the amount of any finance charge;

Since compliance can be rigorous, and representing loan terms imposes unnecessary and unwanted liability, the safe bet is to just stay away from TILA trigger terms! Examples of TILA trigger terms include:

• Only $15 per hundred borrowed!
• 0% APR
• Low interest rate!
• No Money Down!

Affiliates’ failure to comply with applicable laws can also result in enforcement actions or civil lawsuits.
For advertisers under the FTC’s jurisdiction, that alone could mean court orders to cease and desist, fines for each violation, injunctions, civil penalties, and/or actual damages.

The overwhelming task of trying to figure out what needs to be done to comply with applicable laws and regulations can be quite daunting.

There is hope, however, and such hope may be found in obtaining proper and competent legal advice along with some good old-fashioned common sense.

***DISCLAIMER*** This article represents independent research and opinion of the author and is not to be considered or construed as legal advice. Affiliates should seek independent legal counsel for assistance in their particular advertising activities.

Brad Norton, Esq. is In-House Counsel for PartnerWeekly, LLC and SellingSource, LLC, an Inc 100 company.

Download the entire FeedFront issue 3 here – http://feedfront.com/feedfront-issue3.pdf
FeedFront issue 3 articles can be found here as well: http://feedfront.com/archives/category/issue-3/