Get On The Good Foot With The FTC

Website owners can be particulary slow in creating the full set of policies needed to protect visitors, customers, and themselves. After the scare a few years ago, when a well-known internet marketer was fined by a watch-dog government body for not having certain disclosures on his web site, most marketers began being more diligient about their practices. They were getting on the good foot by taking steps that kept them out of the dogpile.

The big overhaul included creating Privacy Policies, Disclaimers, Earnings Statements, and Website Terms of Use. The frenzy was at such a fever-pitch that a new breed of internet compliance lawyers not only sprang up, but a few thought suing marketers over using their new internet compliance documents was another profit center.

What’s The FTC Up To Now?

The Federal Trade Commission (FTC) has updated its Advertisement Endorsement Guidelines for the first time in many years, most notably to deal with the responsibility of bloggers and the information bloggers are required to disclose to their readers.  As an owner of an online presence, if you’re blogging as part of your overall strategy, this is important. 

In a nutshell, if you blog about or write about a product or service for which you receive some type of compensation, whether affiliate income, referral payment, or free products and services, you’ll need to disclose that information to your audience.

The FTC is concerned that you will influence your audience by your endorsement.

In the video below, Mary Engle, Associate Director of the Bureau of Consumer Protection, gives a quick overview of the rationale behind the new (updated) policies.

 

But before the FTC settled on the final guidelines, they got an earful from marketing types.  You can read a summary of their comments in the docs referenced at the end of this article.  No doubt, those emphatic comments influenced the commission to at least concede:

Thus, a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement.¹

You can see why it is wise to adopt a policy, as much as is practical, of recommending products and services you use for your business versus spouting off praises for products and services you know nothing about.

Are You Protected?

Unfortunately, many small business owners who had websites weren’t aware of those other marketers’ plight, and if they had a Privacy Policy, that was about it.

If your business — or even personal website — is missing these critical legal-type documents, it’s high time you did something about it. Lack of know-how is not a good-enough reason. And if you need a bit of encouragement, the Federal Trade Commission’s recent actions concerning Advertising Endorsements should light a fire under your buns.

Not having them could be harmful to your internet business health.

You need to get on the good foot with the FTC. Read on to get a heads up on governance changes that could soon affect your online existence. Later in this article I’ll point you to some free resources to create these critical documents. Just like the ones you have for your offline business (if you have one), you need a set of policies for your online business activities. Not having them could be harmful to your internet business health.

 

A More Personal Big Brother

On their website, the FTC has posted a series of short videos, which answer key questions about the Advertisement Endorsement Guides.  The videos feature explanations by Mary Engle, Associate Director of the Bureau of Consumer Protection.

The six key questions answered are:

1. What’s new about the Endorsement Guides? (video below)
2. Why did the FTC update the Endorsement Guides?
3. What do the Endorsement Guides mean for bloggers?
4. How do bloggers follow the Endorsement Guides? (video link below)
5. Is the FTC planning to sue bloggers?
6. Where to go for more information.

Watch The Videos

I’ve included links for two of the videos below.  (I didn’t embed the videos here because they play really choppy, even on the FTC website.) Just click the link for your preferred version and it will open using software already on your computer, either Quicktime or Windows Media Player.

View What’s New About The Endorsement Guides

Click here to open in Quicktime OR

Click here to open in Windows Media Player

View How do bloggers follow the Endorsement Guides?

Click here to open in Quicktime OR

Click here to open in Windows Media Player

How Can You Help Fellow Online Business Owners and Personal Bloggers?

It is not enough to read this information and keep it to yourself.  Why not?  Because when you get in the habit of sharing what you know that could adversely affect your target audience or your comrades-in-arms, you can expect they will reciprocate.  Besides, you could avert an impending disaster just by passing along critical, heads-up information!  (This is much better stuff than firing off those “Virus Alert! New Virus!” type messages everybody used to be so eager to send to their entire address book from Outlook Express!)

Take Action

I’m not really opposed to the FTC’s move to bring some accountability to the blogging world.  I hope with time — and input from consumers and marketers — these policies and practices will become internalized by business owners, and we will effectively govern ourselves.  Towards that end, here are a few things you can do.  You are not limited to doing just one of them.

• Write a short message in your online or offline newsletter about FTC changes for bloggers and provide the link to the videos on FTC website and to their full publication.
• Add a resource section to your website and your online newsletter that tells bloggers and business owners where to get free help with creating their own policies. (Just copy from below and if you find others, let us know.)
• Send a series of tweets out to your followers about the videos.  If you use HootSuite (www.hootsuite.com) or another tweet scheduler, go ahead and schedule the same tweet to be sent once a week for 3 or 4 weeks, at different times, so you’ll be sure to hit people in different time zones.  If you want, you can cut-and-paste one of those below.
• Bring your online activities in line (in government speak, “in compliance”) by reviewing your policies and creating those that are missing.  Dial up your attorney or use the free resources below to get started.
• Share your opinion … Leave a message in the comment section.

Here are some sample tweets . . .

Sample Tweets

RT @CoachNotesBlog: Recent changes to FTC Guidelines could adversely affect bloggers. Find out more http://bit.ly/2EtROp

What is the FTC up to now? It could affect your online business. http://bit.ly/kJVDG

RT @CoachNotesBlog: Is the FTC planning to sue bloggers? Video explanation here http://bit.ly/2EtROp

Advertising Endorsements: FTC Video explanation here http://bit.ly/kJVDG

RT @CoachNotesBlog: Get On The Good Foot With The FTC. Effective Dec. 2009 http://bit.ly/2EtROp

Free Resoures For Creating Critical Documents*

*The following information is for informational purposes only and is not intended as legal advice.  Please consult a qualified legal professional for particulars about your business and/or internet-based activities.

Sources for Policies

Before downloading any templates or documents, make sure your virus protection is up-to-date to avoid mishaps and unpleasantries!

• Interactive Disclosure Policy at http://www.disclosurepolicy.org
• 4 Free Templates from Free Net Law:  Copyright Notice, Disclaimer, Privacy Statement, Cookies Policy (all under Creative Commons License)
• Privacy Policy for websites that include Google Adsense Ads by JenSense.com
• Do a Google search for “policy legal templates”

Federal Trade Commision Resources

• FTC Advertising Endorsement Guides (Video Series)
• FTC Revised Endorsement and Testimonial Guides (pdf)
• FTC Press Release Highlighting Changes (web page)
• Federal Register Notice, Includes Citizen Comments (pdf)

WordPress Plugins

• Privacy Policy plugin by Synclastic.com

Do you know of additional resources that should be included here? Had any hair-raising encounters with the FTC? Share your experiences and comments below.

Update February 26 2010

Discussions and analyses of effects of the FTC Guidelines continue. The updated policy went into effect in December 2009.

I was asked by a commenter for additional information about this subject. There were myriad conversations going on around the web concerning the subject from the time of the first announcement, through the commenting period, and after the final changes were made policy. Here are just a few more sources (some dating back to early 2009).

As soon as time permits, I’d like to do a followup article as part of my Internet Policies series. Please request the RSS Feed to stay informed. Thanks for reading.

• Bloggers Can (Not) Be Fined Up to 11K Per Post for Non-Disclosure
  by Chris Crum at Web Pro News
  The FTC is now saying that the $11,000 fine is not accurate, at least for the first violation. Fast company got some responses from Richard Cleland, assistant director, division of advertising practices at the FTC, who says . . .
• TV, Electronic Media Complaints Rank Twelfth at FTC For 2009
  by John Eggerton, Broadcasting & Cable, 2/24/2010
  Special report indicates a total of 26,568 complaints in that category, 2% overall . . .
• FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising
  Contributor: Pryor Cashman LLP
  Published: 11/14/2009
  Pryor Cashman Entertainment and Intellectual Property Partners Brad D. Rose and Howard Siegel, along with associate Melissa Tomkiel, have written an informative Legal Update about the Guides . . .

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Footnotes

1. Federal Trade Commission, Guides Concerning the Use of Endorsements and Testimonials in Advertising, p. 9.  Accessed 10/23/2009. PDF opens in a new window.  [↩ go back]

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