Honest Business, Internet Scams, and the FTC

It’s tough to run an honest business these days. On the customer side, you have the late payers, the non-payers, and the outright cheaters that suck away your profits. On the supplier side, you have the offline scammers, the online scammers like the Nigerian internet scam, and the outright hackers who consume your attention and resources. You have to deal with your competition. And now there is a new impediment to running an honest business — the FTC.

Wait a minute, isn’t the FTC supposed to protect honest consumers and businesses from unscrupulous scammers? Before 10/5/09, that would be true. As of 10/5/09, I’m not so sure. You see, the FTC released a new guideline on Monday that affects how businesses can use endorsements whether online or offline.

The document is here:

http://ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf

I’m not a lawyer and I don’t play one online so I can’t provide any legal advice. What I am is a marketing specialist. As a marketer, I know that in order to sell products via copy, you need a good headline, a description of the problem or pain, your solution, your benefits, social-proof via endorsements or testimonials, and a call to action thrown-in with some scarcity. If you miss any element of that marketing chain, your sales argument becomes weaker. In other words, the prospect is less likely to buy from you.

From what I’m reading about the new FTC ruling, sellers who use endorsements no longer have a “safe harbor.” In other words, I will need to go to great lengths to add disclaimers about the testimonials and endorsements. The worst part is that this also applies to my affiliates who may not be as diligent. As I understand it, even if my affiliate breaks an FTC rule, I will be liable. Ouch!

Yes, I know that there are real scammers out there online and offline. Yes, I understand the argument that this type of regulation was designed to catch the bad guys. But on balance, the FTC has thrown the baby out with the dirty bath water. Besides, consumers should also be responsible for their own behavior. Come-on, who in their right mind believes that an acai berry – a blue berry cousin – for goodness sake, can make you lose 30 pounds in 2 weeks? Do we need the FTC to protect us from being gullible?

What is an honest business to do? I suggest you consult with your attorney today regarding this new FTC guideline. I’m not a lawyer. I don’t give legal advice. And if there are links on my site, they are likely affiliate links where I get compensated in some way if you buy through my links. Any testimonials on my site are for informational purposes only. Your results will likely vary because you are a totally different person than the one giving the testimonial. In fact, just don’t even read the testimonials. The same is true for any endorsements. Who cares what others say anyway, right? “If you were a sheep and noticed that the sheep in front of you just jumped off a cliff, would you jump too?” Anything else that I need to disclaim in case the FTC is watching? 😉

Copyright © Alex Tran