By Devdiscourse team

A federal district court has granted the Federal Trade Commission’s request to stop a group of San Diego-based Internet marketers from deceptively advertising free trial offers and not only charging consumers full-price for the trial product but also enrolling them in expensive, ongoing continuity plans without their knowledge or consent. The court order announced today temporarily halts the operation, freezes its assets, and appoints a temporary receiver over the business.

According to the FTC’s complaint, the defendants market and sell a variety of products online, including skin creams, electronic cigarettes, and dietary supplements. Advertising through third-party websites, blog posts, and surveys, the defendants allegedly offer consumers “RISK FREE” trials of products such as “Wrinkle Rewind,” “Erase Repair H/A,” “Pro Vapor,” “Cerebral X,” “Test X Core,” and “Garcinia Clean XT.”

In addition, the FTC alleges the defendants use deceptive order confirmation pages to trick consumers into ordering additional products, for which the defendants similarly charge consumers full price and enroll them in negative-option plans. The defendants then make it difficult to cancel the continuity plan, stop or avoid the recurring charges, or obtain a refund.

Read the full article here.

Here’s How To Make Sure You, Your Business and Website Are FTC & GDPR Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC & GDPR compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission and the new GDPR guidelines.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance & GDPR trainer in the World, for a one-of-kind, completely free online compliance workshop.

Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

By Mix

As part of its larger efforts to clean up its act, a couple of months back Facebook announced it will no longer allow ads promoting crypto-products and initial coin offerings (ICOs) on its platforms. But it seems that sly marketers have already worked out how to slip cryptocurrency ads past the filtering system.

The worst part is that the trick is ridiculously simple: all it takes to circumvent the cryptocurrency ad ban on the popular social media platform is to avoid using any of the forbidden terms. This is why some marketers have begun to strategically abbreviate the word “cryptocurrency” to “c-currency” – and other similar variations.

Some users have already taken to Reddit to notify fellow crypto-enthusiasts of this new shifty tactic.

Read the full article and learn more about Deceptive Advertising and Social Media here.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

Despite the explosion in mobile advertising (eMarketer pegs mobile to generate $70 billion in the U.S. this year, up from $47 billion in 2016), mobile advertising, by and large, still sucks. Creative is often jammed into small boxes and ad formats that litter websites, and in some cases, marketers use deceptive design tricks to incentivize people to click.

Dozens of subreddits are dedicated to uncovering such stealthy-yet-spammy tactics. A few weeks ago, a screenshot of a mobile banner ad for Chatmost, a competitor to Craigslist, started spreading on Twitter and Reddit because the creative included a small speck that looked like a piece of dirt, encouraging users to swipe their screen as a way to drive clicks.

By Barnett Gilmer

Google recently made an incredibly important decision that we are confident will help protect those who are at a vulnerable time in their life on the search for a reputable drug and alcohol rehabilitation facility.

Here’s what was happening:
Before Google made this decision, anyone could pay to run an ad at the top of your search results for essentially anything related to alcohol and drug rehabilitation. Illegitimate “facilities,” such as “referral” services that are being paid a commission for leads were paying to be linked to specific keywords such as: drug rehabilitation center, alcohol rehabilitation facility, heroin detoxification, drug treatment, alcohol treatment, etc. These referral services would earn a commission by luring the person seeking treatment to a particular drug or alcohol recovery center that was paying the “finder’s fee.” Many people would also be lured into facilities that might advertise as a “holistic drug rehab” or a quality “non-12 step drug rehab” but were really a facility only interested in finding ways to bill insurance companies for services they didn’t provide.

If all drug and alcohol treatment centers would act legitimately, then there wouldn’t be a problem. Unfortunately, scammers buying these keywords effectively preyed on vulnerable people who were attempting to save themselves or their loved ones.

Read full article and learn more about Deceptive Advertising here.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

By Chip Cooper, Esq

Experienced Internet marketers often operate under the misconception that the CAN-SPAM Act doesn’t apply to most routine business communications.  With CAN-SPAM Act fines of up to $16,000 per violation, this misconception could add up to a big number.

That’s why Internet marketers should avoid 3 blunders that are CAN-SPAM traps for the unwary.

The CAN-SPAM Act

The CAN-SPAM Act of 2003 (CAN-SPAM) promised to provide remedies against annoying and unsolicited bulk email known as “spam”.  Typical of legislation that starts out with limited objectives, CAN SPAM reaches much further than regulating unsolicited, bulk email – and that’s where the blunders come into play.

Before we get to the blunders, let’s review CAN-SPAM’s 5 basic rules as supplemented by amendments enacted in 2008:

• header information (identifiers such as To, From, IP Address): must not be materially false or materially misleading;
• subject line: must not mislead the recipient about a material fact regarding the email’s contents or subject matter;
• return email address: must contain a functioning email address that the recipient can use to request no further messages;
• requests to unsubscribe: if a recipient requests unsubscribe from receiving additional emails, emails matching the unsubscribe request must be honored within 10 days with a mechanism that is available from a single web page and that operates with a single click; and
• contents: the email must (i) clearly and conspicuously identify that it is an ad, (ii) provide clear and conspicuous notice the recipient may unsubscribe for additional emails, and (iii) contain a valid postal address for the sender (may include a valid post office or private mailbox address).

In addition to supplementing the 5 basic rules, CAN-SPAM’s 2008 amendments added an additional rule regarding email newsletters and other emails that have multiple advertisers, contributors, or senders.  Under the new “designated sender” rule, multiple contributors to the email may designate as single sender who must be designated in the From line, and who will be responsible for CAN-SPAM compliance.

“Commercial” emails are required to comply with all 5 of the basic rules, plus the “designated sender” rule.

“Transactional or relationship message” emails are required to comply only with the header information requirement and the “designated sender” rule.

Blunder 1 – CAN-SPAM Applies Only to Bulk Email, Right?

Not true.

Although much of the publicity surrounding the passage of CAN-SPAM focused on regulation of unsolicited, bulk email, there is no minimum number of emails for CAN-SPAM to apply; CAN-SPAM applies to even a single email.

So, if a single email relates to the business of an individual or entity, it’s a “commercial” email and CAN-SPAM applies, and the email is subject to all 5 of the basic rules, plus the “designated sender” rule.

Blunder 2 – CAN-SPAM Only Applies to Unsolicited Email, Right?

Not true.

The Federal Trade Commission (FTC) made it clear that CAN-SPAM may apply to emails that are solicited.  The FTC stated in regulations issued in 2008 that the FTC would view email newsletters that were subscribed to (or solicited by) a person to fall within the definition of a “transactional or relationship message” if the newsletter consists exclusively of informational content or combines informational and commercial content.

So, even if the email newsletter is solicited by the recipient, CAN-SPAM applies; however, as discussed above, as a “transactional” email, the sender is required to comply only with the header information requirement and the “designated sender” rule.

Blunder 3 – Regular “Business-to Business” Emails are Not Covered by CAN-SPAM, Right?

Not true.

The FTC made it clear in 2008 that emails sent in connection with what most businesses view as “business-to-business” relationship emails may also be regulated as “commercial” emails under CAN-SPAM.  For example, the FTC noted that “business-to-business relationship” emails could include mortgage lenders sending emails to brokers with the latest interest rate information or equipment leasing businesses sending emails to equipment vendors regarding rate sheets.

The FTC expressly rejected a request by business leaders to add a “business-to-business relationship message” category to the “transactional or relationship message” category discussed above.  This means that “business-to-business relationship” emails are subject to all 5 of the basic rules, plus the “designated sender” rule.

So, even though this determination by the FTC regarding “business-to-business relationship” emails flies in the face of reason and common business practices, it’s the law according to the FTC.

Conclusion

With CAN-SPAM, as with many statutes, there are unintended consequences that sometimes lead to surprising results.  Nevertheless, strict compliance with the rules involving the 3 blunders is required in order to avoid liability under CAN-SPAM.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

By Josh Long

Alzheimer’s disease is the most common form of dementia among older adults, with experts suggesting the ailment plagues more than 5 million Americans, according to the National Institutes of Health. As Baby Boomers survive past their 70s, 80s and beyond, old age brings with it a trifecta of complications: an increased risk of loss of memory, dementia and ultimately death.

Unsurprisingly, aging Americans—including those seeking to treat or prevent Alzheimer’s—are hungry to preserve their minds and fight off a loss of memories, and as the U.S. Government Accountability Office (GAO) acknowledged in a May 2017 report, consumers “have increasingly turned to dietary supplements for help.”

However, some marketers touting memory supplements are exploiting a vulnerable demographic, misrepresenting product benefits to the brain and even promising treatment for a disease like Alzheimer’s.

FDA, FTC Enforcement Actions

According to GAO, an independent, nonpartisan agency that works for Congress, two firms addressed FDA’s concerns after receiving “advisory letters” from the agency. Online advisory letters are a relatively new tool used by FDA to fight the online promotion of dietary supplements that purport to treat a disease. The letters provide notice of violations of the law, and they are subject to a shorter internal review process than warning letters.

In February 2017, FDA issued a warning letter to a company that several of its products were suggested as treatments for diseases, including Alzheimer’s, HIV/AIDS, leukemia and Parkinson’s, among several others.

Commenting on GAO’s report, the Council for Responsible Nutrition (CRN)—a Washington-based trade organization representing the dietary supplement industry—acknowledged that such disease claims are fraudulent.

GAO Recommendation

Consumers who are the targets of deceptive advertising and marketing practices may not fully appreciate or understand the roles played by FDA and FTC. For example, while FDA’s jurisdiction over dietary supplements extends to marketing information used in the sale of a product—including supplements marketed on the internet—consumer groups with whom the GAO conferred “were either unaware of FDA’s role with regard to internet sales and marketing of dietary supplements, or said that the shared oversight roles between the two agencies was unclear.”

GAO recommended “the secretary of the Department of Health and Human Services [HHS] and the chair of the FTC develop and provide additional guidance to consumers delineating the agencies’ differing roles in their shared oversight of memory supplement and other dietary supplement marketing on the internet.”

Read full article and learn more about Deceptive Advertising and the FTC here.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

By Brian Barrett 

The new Amazon Echo Look seems like a logical enough extension of Alexa, the company’s AI-powered digital assistant. Previously, Alexa lived inside speakers. Now, it’s in a camera. That progression belies just how much more the Echo Look could know about you than other Alexa hardware does—especially if Amazon ever unleashes the full power of its machine learnings smarts.

Amazon envisions the Echo Look as a way to get fashion advice. Command it to take a photo of you, repeat across various clothing options, and get a recommendation of what you should wear. Along the way, Amazon will also suggest clothing you might want to buy. From Amazon. Including, one imagines, from one of Amazon’s in-house lines of clothing.

In other words, the Echo Look feels like the culmination of a process that started with the words CAMERA and COMMERCE scrawled on a dry-erase board. That alone shouldn’t surprise. Amazon exists, after all, to sell things. But the Look also marries Amazon’s powerful machine learning technology with a camera designed to take regular pictures of you and your surroundings—with no guarantees that in the future, it’ll stick to just your clothes.

Got the Look

As a consumer product, the $200 Echo Look surely makes sense for some people. Maybe a lot of people! Alexa makes for a great digital assistant, and we could all use a little sartorial wisdom now and then. It’s important, though, that those people know exactly what they’re getting.

“A lot of consumers see the convenience and don’t think about the long-term records that are being kept,” says Peter Swire, who specializes in privacy law at the Georgia Tech Scheller College of Business.

In the case of Look, those records include not just audio taken from your Alexa requests, but however many photographs taken in, presumably, your bedroom, as well as what you’re wearing in those photos. It compares different outfits for you as well, and knows which outfits you buy or don’t based on its recommendations. That’s already a ton of data—and before you get to the fact that it also sees your body and face, and whatever objects happen to be in the background. That matters in particular because Echo Look uses machine learning, technology that knows not only identify what an object is, but also what it’s like.

“In a simplistic way, we’re going from being able to give things names or nouns to being able to give them adjectives,” says Louis-Philippe Morency, a machine learning expert at Carnegie Mellon University. “We can describe not just that it’s a shoe, but it’s a red shoe.”

Or in a human’s case, not just a face, but one that’s smiling.

There are a few small comforts here. First, Amazon explicitly does not provide “interest-based ads”—the kind that your interactions with an Echo or Look might generate—to third parties. You can also opt out of Amazon itself serving up personalized ads here. You can also delete the photos the Look takes of you at any time. Last, Amazon confirmed to WIRED that Echo Look will only use its machine learning smarts to identify outfits, not expressions or your bed frame or the slightly torn KISS poster on your wall.

That’s right now, though. The future’s not as clear. And unless Amazon explicitly narrows its scope, the Look could someday know so much more.

Fine Print

There does not appear to be a separate privacy policy for Echo Look. When asked for one, Amazon directed WIRED to an FAQ page that focuses more on the process of taking, storing, and deleting photos than it does on how it plans to use its machine learning capabilities now or in the future.

“Amazon doesn’t say anywhere in any kind of clear language what the risks are,” says Susan Liautaud, an ethicist at Stanford University. “Risks more generally about what it might accidentally pick up, and the privacy risk.”

As machine learning advances, those questions will apply to more and more facets of our lives. They’re not limited to Amazon by any means. But they’re still worth asking every time we invite AI into our lives.

“If people don’t know what is recorded, or when it is recorded, and what information is recorded, then it brings more anxiety and more questions,” says Morency of machine learning generally. “The challenge for us moving forward is to be more transparent, to be able to explain better what data is recorded.”

For Echo Look buyers, the answer today is simple: your clothes. They should know also, though, that it’s just a software update away from potentially becoming much more complex.

Read full article and learn more about Privacy Policy here.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help ofFTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

The training is titled: 3 Tragic (Legal) Privacy Policy List Building Mistakes That Can Get You In Hot Water With The FTC Today – Resulting In Your Business Being Shut Down… And How To Solve It!

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

By Chip Cooper, Esq.

Scenario: You’re an online retailer, and you’ve got a network of affiliates that are committed to selling your products.  You expect that your affiliates will engage in online advertising to generate sales. Some of your affiliates will purchase keywords for sponsored ads from major search engines including Google and Bing, and some of these keywords may be trademarks of your competitors.

Consequence: The purchase of a competitor’s trademark as a keyword is likely to result in litigation.  

Thus begs the questions: Do your affiliates’ purchases of a competitor’s trademark for sponsored ads amount to trademark infringement?  And if so, will you be held liable for  your affiliates’ trademark infringement?

Keyword Ad Litigation Trends

The practice of selling and purchasing keyword ads that contain competitors’ trademarks continues to be hotly litigated. To date, most of the lawsuits filed by trademark owners have been aimed at the sellers of the keyword ads – the major search engines, primarily Google.

The current trend of the law seems to be that neither the sale of keyword ads using trademarks (by search engines) nor the purchase of these keyword ads (by advertisers) is inherently infringing by itself. The focus now seems to be shifting from the sale and purchase of the keyword ads to the precise wording of the ads generated by the keywords.

To date, there has been little if any guidance from court decisions regarding whether online retailers can be legally liable for keyword ad buys by their affiliates – that is, until the recent case of 1-800  Contacts v. Lens.com decided by a Utah U.S. District Court.       

1-800 Contacts v. Lens.com

1-800 Contacts sued Lens.com for trademark infringement based on purchases by Lens.com and its affiliates of sponsored ads that contained 1-800 Contacts trademarks and variations of them.

The Court ruled that Lens.com was not liable for trademark infringement for its purchase of the keyword ads stating “… that the mere purchase of a trademark as a keyword cannot alone result in consumer confusion”.  Also, the court noted that Lens.com had not used 1-800 Contacts exact trademark, only variations of it.

After dismissing 1-800 Contacts’ claim against Lens.com for Lens.com’s purchases of keyword ads and the wording of the ads the keywords generated, the court turned its attention to the issue of whether Lens.com was liable for its affiliates’ purchases of keywords ads. In its analysis of this issue, the court addressed:

• whether the keyword ads purchased by affiliates were infringing, and
• if so, whether the infringement by affiliates could be used to hold Lens.com. accountable.

Regarding the first question, the court focused on “… not just what keyword was purchased, but what was the language of the advertisement generated by that keyword”. The court ruled that some of the affiliates went too far in their ad copy because they used the exact 1-800 Contacts trademark.  This caused a “strong likelihood of confusion” and therefore infringement.

Regarding the second question, the court ruled that the actions of Lens.com’s affiliates could not be imputed to Lens.com because Lens.com used the Commission Junction affiliate network to acquire its affiliates, and for this reason Lens.com didn’t know who most of the affiliates were and had little direct contact with them.  The court noted that Lens.com had nothing more than “general information” of its affiliates and their activities, and ruled that [Lens.com] therefore cannot be charged with contributory infringement because Lens.com had no actual knowledge or willful blindness based on that information.

Conclusion

The 1-800-Contacts v. Lens.com case is important for keyword ad cases for at least two reasons:

• the court made it clear that it’s about the ad copy, not the ad buy, and
• online retailers won’t be automatically be held liable for infringing ads placed by their affiliates; the result will depend largely on what information the retailer had regarding the identities of the infringing affiliates and their activities,  and what it did (or didn’t do) with that information.

Although this case is not the last word on the issue of a retailer’s liability for keyword ads placed by their affiliates, it does provide some guidance regarding where this emerging trend will lead us in the future.

Here’s How To Make Sure You, Your Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

Smart business owners around the world are doing it with the help of FTC Guardian.

FTC Guardian is a service that is 100% focused on helping to keep you get and stay FTC compliant and fully protected. And right now, we are offering a free training to give you the knowledge, information, and guidance that you need to stay out of trouble with the Federal Trade Commission.

Free Compliance Workshop: Join Chip Cooper, Esq., the #1 FTC Compliance trainer in the World, for a one-of-kind, completely free online compliance workshop. Workshops fill up quickly, so register now.

Here are some of the things you’ll discover on the training:

• Real-Life Examples of People Who Didn’t Think They Were At Risk, But Who Got Nailed By The FTC, And Why It Could Happen To You, Too

• The 3 Enormous Powers The FTC Has That Can Change Your Life – And Your Family’s Life – Forever!

• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

• And Much More…

Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

Go here to register for our next FREE training and make your business is FTC compliant today!

Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.

In a recent settlement, the Federal Trade Commission (FTC) made it clear that deceptive website legal forms, particularly those that support “free” offers, will not be tolerated.

According to the FTC, the deceptive marketing schemes employed by the defendants netted over $450 million in sales.  The result – the FTC came down hard on the defendants, with one individual defendant giving up all the money in his bank accounts, his house, automobile, and other personal property.

The takeaways from this settlement provide clear guidelines for all Internet marketers, particularly those who with sites that use “Free” offers as a lure for upsells to provide recurring revenue, or so-called “continuity” websites.

The Marketing Schemes

The offers were for products with broad market appeal, including weight-loss pills, teeth whiteners, health supplements, work-at-home options, access to government grants, free credit reports, and penny auctions.

A key factor in the marketing scheme was the lure of “free” offers, including “free” trials.  Consumers were often charged a monthly fee, typically $79.95, plus additional monthly recurring fees for “bonus” offers and upsells.

Another key factor in the marketing scheme was significant leverage through affiliates – who drove traffic to the websites with the offers through widespread use of banner ads, pay-per-click ads, pop-ups, and unsolicited email.  Affiliates were paid commissions for the sales resulting from traffic sent to the offering websites.

The Devil Is In The Details

Neither of the above key factors in the marketing scheme are per se illegal.  The problem, according to the FTC, is in the details of how the defendants used the key factors to deceive consumers in violation of the FTC Act.

The following checklist summarizes the deceptive elements alleged by the FTC.

• Misrepresentations About “Free”, “Risk-Free”, and “Bonus”. The primary lures for consumers were the “Free” offers.  The defendants induced consumers to provide their credit or debit card information by falsely promising that the product or service could be acquired on a “free” or “risk-free” trial basis while only paying a nominal shipping and handling fee.  Some offers represented that the consumer would receive a product or service as a “bonus” for simply signing up.  In fact, consumers were charged for products or services that they didn’t know about or had not agreed to purchase, and in some cases the charges were recurring on a monthly basis.  The process for cancelling these charges or obtaining refunds involved separate time-consuming phone calls and other steps designed to significantly increase difficulty.

• Failure to Disclose, or Deceptive Disclosure of, Additional Charges. Despite the “free” offers, there were additional charges.  In some cases there was no disclosure of additional charges.  In many cases, there were disclosures regarding the additional charges, but the disclosures were not in a clear and understandable manner.   Additional terms were buried in a separate “terms and conditions” page loaded with “lengthy, legalistic fine print” that was not accessible from the ordering page.  Consumers were not required to click on an “I Agree” button to indicate acceptance with the “terms and conditions” page.

• Deceptive Refund Policies. Another significant lure for consumers were generous refund offers.  Promises included “100% Satisfaction Guarantee”, “Risk Free Guarantee”, and “Easy Money Back Guarantee… Just Follow the 3 Easy Steps”.  In fact, refund requests were denied, of if promised, they were never issued.  In many cases consumers had to resort to complaints to law enforcement or the Better Business Bureau to actually get a refund.

• Failure to Disclose, or Deceptive Disclosure of, Limitations on Cancellations and Refunds. Despite the refund  offers, there were limitations on cancellations and refunds which were either not disclosed or not adequately disclosed.

• False and Unsubstantiated Efficacy Claims. The defendants did not possess or rely upon a reasonable basis to substantiate their advertising claims on banner ads approved by the defendants for use by affiliate marketers.

• False Celebrity and Other Endorsements. The defendants displayed images of celebrities on their websites without permission and falsely represented that these celebrities endorsed the defendants’ products.  In addition, logos for prominent news entities were displayed with statements such as “Featured On” and “As Seen On TV”, when in fact none of these entities endorsed or positively reported on any of the products.

• Evading Risk Management Rules to Obtain Merchant Accounts. The defendants submitted inaccurate financial information to merchant banks in order to retain or obtain merchant credit card processing accounts.

The Settlement

The settlement included substantial payments by the defendants from the sale of business and personal assets.  In addition, the defendants’ were enjoined for future violations of the deceptive practices discussed above.

Finally, regarding their affiliates, the defendants were ordered:

• to disclose to all affiliates that engaging in deceptive practices would result in immediate termination, and

• to monitor affiliate activities monthly for violations.

Conclusion – Important Settlement Takeaways

Most of the takeaways from this settlement are obvious egregious violations.  However, there are three takeaways that are perhaps no so obvious, but which are significant for Internet marketers:

• reliance on disclosures or disclaimers in website legal documents alone is not enough to avoid liability; in this case there were disclosures regarding additional charges and refunds limitations, but they were buried in the “fine print”, and therefore, they were not clearly and conspicuously disclosed in order to avoid consumer deception;

• even if disclosures are clearly and conspicuously disclosed, using “Free” offers as a lure for upsells, particularly if the upsells involve recurring revenue (continuity plans), will always be a red flag issue, and therefore, attract close scrutiny by the FTC; and

• using affiliates to advertise and drive traffic for sales does not absolve an Internet marketer merchant from liability for the affiliates’ deceptive practices; monitoring of affiliate marketing practices and termination of offending affiliates is required.

Here’s How To Make Sure You, Your Quebec Business & Website Is FTC Compliant

By now it should be clear how important it is for you to be FTC compliant. But how can you do that without spending $7,500-$8,000 or more on Internet Attorneys?

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• How to Avoid FTC Claims When Collecting Leads With Optin Forms

• 3 Privacy Policy Mistakes Every Digital Marketer Is Making, And Why You’re In The FTC Crosshairs.

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Remember: legal protection is a massively important part of your business, and it’s one you cannot afford to ignore any longer.

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Disclaimer:  This article is provided for informational purposes only. It’s not legal advice, and no attorney-client relationship is created. Neither the author nor FTC Guardian, Inc. is endorsed by the Federal Trade Commission.