FTC Rules, GDPR, Copyright Regulations and Website Rules Compliance – Legal Requirements for Affiliate Marketing

The main federal agency that oversees commercial activity on the Internet is the Federal Trade Commission or FTC. The more familiar you are with their rules and guidelines, the better off you will be. As a general rule, major affiliate platforms typically adhere to FTC guidelines.

FTC Main Guideline

As a general and overriding guideline, you don’t have to be a lawyer to understand this: Do not engage in deceptive, fraudulent, exaggerated or unethical marketing.

In addition to being affiliates and/or merchants, it’s safe to say that we have common ground in that we are all consumers. We have had bad experiences as consumers and we should remember them because they are valuable in helping us become good ethical marketers. We do not recommend being “good and ethical” just because it sounds good or moral or because we read it on some positive thinking site; We do it because being good and ethical is the basis of its profitability.

Seriously, if you do affiliate marketing the right way, you’ll have happy customers and a healthier bank account in the long run. Consider the following points that the FTC highlights as good for you and your customers. Note that virtually every point they raise actually leads back to the main point above.

Avoid Unrealistic Statements

Whenever you make substantial claims on your landing page regarding a product you sell (or recommend to people), those claims or recommendations must be substantiated. Is there credible evidence or documentation to substantiate the product’s stated claims?

The FTC kicks in when it sees claims that are too good to believe. Some phrases that you should be very careful when using in your public advertising text are the following:

“Guaranteed to work 100 percent of the time”
“Guaranteed benefits for you”
“Lose XX pounds, no matter how much you eat or exercise”
We think you get the point. Extraordinary claims need corroboration or the FTC will crack down.

Websites must not guarantee that users will achieve any level of profits or other tangible results. If your website makes a claim about your product or service that includes specific numbers (e.g. dollars earned, leads generated, weight loss, etc.), those claims are subject to additional requirements. Such claims must be supported by specific figures to demonstrate that they are representative of what an “average customer” will generally achieve under the circumstances described.

If the claim is not typical of the average consumer, the website should include a disclaimer regarding performance generally expected under the circumstances described. A general warning like “results may vary” is insufficient. An acceptable alternative would be “Results are not typical and may vary due to a variety of factors, such as the member’s applied efforts, commitment, etc. Members who follow our program, on average, lose between 1 and 2 pounds per week “.

Keeping Records of Testimonies

Testimonials are positive and reassuring statements, presumably from customers and other users, about you, your company or the product/service you offer. The FTC may not care about those glowing testimonials about you as a person, but they do care about testimonials about your product or service.

The FTC wants to know that the testimonial was honest about how good or effective the product was, especially if the claim is to cure a medical condition or affliction. Therefore, be sure to keep records of these customers and testimonials in case the time comes when you need to verify the product claims. Often, FTC inquiries come about when dissatisfied customers bring complaints to them.

If the testimonial is because an actor or notable person made an endorsement, then it must be disclosed whether that person received compensation for making the endorsement. If a testimonial makes a specific, measurable claim, make sure it has substance. The bottom line is that you need to work to ensure that the product or content is of quality so that testimonials and endorsements are easy to obtain and support.

Taking Care of your Language

Keep in mind that words have meanings, especially in a public document like an ad or landing page. Two words you should be careful with are “free” and “guaranteed.” While you’re at it, add the number “100 percent.” Of course, word combination phrases like “100 percent free” and/or “100 percent guaranteed” can be even worse.

If you market a product saying it’s “100 percent free,” but the order form says shipping and handling costs $9.95, you’ll get in trouble with the FTC. When the word “free” is used without any commitment or condition, then the product must be effectively free, at no cost to the consumer.

If there are conditions or stipulations, these must be made clear before making the purchase and presented clearly in the text. If you claim a product is 100 percent guaranteed or offer something similar, such as “100 percent satisfaction guaranteed,” then you should clearly state any conditions or limitations on the warranty. Don’t just say “100 percent money back guarantee” if you mean “100 percent money back guarantee if returned in its original condition within 30 days.”

Keep your Prices Consistent

Consumers don’t like price games, and if you abuse pricing practices, it could mean you in trouble with the FTC. If you say a product was originally priced at $99 and is now being offered at $19 for a limited time, was it really $99 in the recent past and is it demonstrable? If it’s now $19 for a limited time, what is that specific time period? Assuming your incredible price is valid only “until midnight tonight,” what will the price be in the morning?

Also, if you offer bonuses, do you indicate a realistic value for those bonuses? If a landing page offers a program for less than $20 and says the additional bonuses are worth $4,000. That is consistent and credible?

The bottom line is that consumers can sense what is real value and what is hype, and you don’t want this to damage your long-term reputation.

Have a Clear Refund Policy

What is your refund policy and what are the specific terms? Is your refund policy clearly present on the landing page? Close to warranty, if any? How about on the order page? How about what conditions will void a refund?

Make your refund policy clear both on the landing page and again at the point of purchase on the sales page. If there is a problem, complaints could go to the FTC (or another federal or state government agency that handles consumer complaints in your niche).

Be aware of the Rules about Business Opportunities.

As an affiliate, you perform a marketing role and do your best to refer potential customers to a merchant’s offers. At this point, you are not offering a business opportunity, especially if you are doing conventional affiliate marketing. FTC rules govern the offering of “business opportunities.”

However, if you are a merchant looking to recruit affiliates or are an affiliate in a multi-tier compensation model, you should be aware of the rules governing the sale of “business opportunities.” There is nothing wrong with offering business opportunities, but you should be careful when making attractive financial or earnings claims.

Don’t tell anyone that your business opportunity will make them millionaires this weekend. Be careful when reporting exaggerated dollar amounts. Obviously, if you can corroborate your claims and have substance, that’s a different story. But in most cases, when unethical sellers promise great riches, the FTC investigates, especially if there are many dissatisfied and disappointed customers.

Before you think the FTC is lurking under your bed waiting to pounce on you, think again. Consider him your friend. Sign up for their email list at https://www.ftc.gov/business-guidance.

Be proactive about the FTC and the rules it enforces. Head over to their site and click through to their “business center” where they have a blog and business guidance. Stay ahead of the curve; See what they are doing and what is on the horizon for you to be well.