The Disclosure You Need On Your Hubs Today To Avoid FTC Prosecution

It has just been announced that the U.S. Federal Trade Commission (FTC) wants to expand its enforcement against false and misleading advertising by extending its jurisdiction to online writing.

In the updated FTC Guidelines Concerning the Use of Endorsements and Testimonials in Advertising, the agency proposes searching online pages for misleading information and failure to publicize potential conflicts of interest. What that means is that any blogger (defined loosely as anyone writing a personal journal online which of course includes Hubbers) that reviews products is subject to a thorough examination.

These guidelines are expected to be approved in a couple of months from now with some likely modifications which could make them more or less strict. As they exist now, they would clarify that the FTC has the right to prosecute online writers as well as the companies that pay them fees no matter how small, for any false claims or for failing to disclose the conflicts of interest.

The definition of conflicts of interest would be the ones that arise when anyone places on a website any form of review or test of a product while at the same time collecting any amount of money from clicks on the ads which relate to the product. It actually goes beyond this: According to the Washington Post, any type of blog could be scrutinized, not just ones that specialize in reviews.

Let's take an example: You write a Hub about a Technowizard iWidget phone. The Hub outlines the features of the iWidget and includes your favorable experience with an iWidget. If anyone clicks on any of the ads, including the Adsense, eBay, Amazon, or Kontera links and ends up buying even a $2 vinyl iWidget carrying case which results in the big commission to you of 2 cents, the FTC could prosecute you under the new laws.

According to Rich Cleland, the assistant director in the FTC’s division of advertising practices: "Affiliate marketers are covered, and the stress there is on 'marketers'. You can put a different name on it, but you’re still a marketer. We really want people to distinguish between advertising and nonadvertising."

The interviewer went on to ask the question of whether the FTC really wants to spend time making sure that bloggers who make a nickel commission on the sale of a $0.99 mp3 clearly disclose their "conflict of interest" to their readers? Answer: Yes, they do.

The way the FTC guidelines currently stand they are not out and out prohibiting discussion of products or services, as that would violate First Amendment rights. What they are demanding is a disclosure statement on any page where claims are made about a product or service.

I don't usually direct Hub readers to other sites, but in this case I believe it's necessary. DisclosurePolicy.org's Policy Generator allows you to answer a few questions and get a fully applicable and legal disclosure policy generated to suit your web page's content. It's completely free to use and there are no limits.

Keep in mind that this DisclosurePolicy.org site is operated by the company that runs PayPerPost.com, which is a leading paid blogger review organization exactly of the type which is in the FTC's crosshairs. That can be a good thing, as it's quite certain that their lawyers will stay right on top of this developing situation at the FTC and will ensure that the disclosure statements generated will adhere to all the guidelines.

Therefore, from now on, if you write a Hub that mentions a product or service in any way other than blasting it as the worst POS on the face of the Earth (and even that could be taken as some form of sideways endorsement) and you have any form of Adsense, Kontera, eBay, Amazon or advertisement placement on your page that has anything at all to do with that product or service, place a clear and properly worded disclosure on each and every Hub or other web page you write!

Start today as you never know whether the FTC is going to establish some form of retroactive policy. Also, don't use the excuse that you live outside the USA to avoid this disclosure. HubPages is based in the United States, fully within FTC jurisdiction and that still means that the manure could impact the spinning blades.

Remember: Better safe (and fully disclosed) than sorry!

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Comments 31 comments

Gypsy Willow profile image

Gypsy Willow 7 years ago from Lake Tahoe Nevada USA , Wales UK and Taupo New Zealand

Big Bother is closing in. Excellent hub. Thanks for being our look out guy.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Thanks for the compliments, Gypsy Willow. That's what I'm here for! :)


Staci-Barbo7 profile image

Staci-Barbo7 7 years ago from North Carolina

Hal, the unethical marketers out there actively posing as independent review panels for products and services have brought this ruling upon us all!  Thank you for this timely information. 

Does anyone know if HubPages management has any specific recommendations on the subject?  Will Hubbers need to update previously written Hubs with conflict of interest disclosures, as Hal suggests, out of due caution?

Staci


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

You're very welcome. Yes, the few bad apples have spoiled it for all of us, that is for certain. I can't speak for HubPages, but Ryan Hupfer does so it might be a good idea to ask him. Personally, I'm quite certain that HubPages is carefully studying the situation and will take all necessary steps to protect Hubbers.


fortunerep profile image

fortunerep 7 years ago from North Carolina

and why exactly are they doing this?

dori


quicksand profile image

quicksand 7 years ago

Hi Hal, thanks a lot for this very valuable information. First of all, going through millions of websites, blogs and articles would be a task that would require thousands of employees selected for this very purpose alone.

With no prior experience they would be quite eager to show off their efficiency by grabbing the very first blog or website and hurling it into "the arms of the law." This of course puts everyone in the danger zone irrespective of whether his/her blog contains phrases deliberately designed to deceive the viewer into buying or not.

Even a simple phrase like "the solution to your online marketing problems" is very likely to trigger off problems if, in the opinion of the authorities the advertised e-book or software can really not be the "solution" to anything.

Selection of web pages and blogs for this purpose would be based on the rankings given by search engines I guess. Would it not be a good and fair dealing idea to start this project offline as offline advertising existed long before online advertising came into being.

In this case, statements we have been tuned to respond to, like "zings go better with zoka zola," or "zoka zola flattens you best," ... and so on, should be first examined and the merits and de-merits of these advertising phrases should be evaluated and if required, action taken. What do you think?

Thanks once again for publishing this article.


Alexander Mark profile image

Alexander Mark 7 years ago from beautiful, rainy, green Portland, Oregon

Thanks so much for the info, what a bunch of crap isn't it? Yeah, we know that there are plenty of scamming idiots out there, but putting a disclosure on all websites will not keep the dumb people safe.

I think what is really going on is another attempt to get our money, just like minor traffic tickets, (like the ticket I just got for talking on the cell phone - even though I was not driving recklessly or too fast and even though I have a clean record and it would have been fine if the cop had given me a warning), that ticket was supposed to be 20 bucks, and for some reason it is 130+ with no explanation. Although I did break the law, I think this type of nagging is out of hand, and so it is with this new yoke on our necks.

Oh my God, did someone just go to my profile page and look at one of my hubs? I think I just made a penny - watch out!


Army Infantry Mom profile image

Army Infantry Mom 7 years ago

Wow,..All I can say is,...That's Bull Crap. You done a wonderful job on this hub,.Sorry about the penny you earned off of me,..LOL


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

fortunerep: The basis of the FTC action is legitimate. There are many bloggers who get paid big wads of cash by the manufacturers, or get to keep their test products for free. Of course if, for example, Dell gives me a Core i7 PC system to test and tells me that once my testing is over I don't have to return it, I'm going to be significantly biased towards the unit and give it a stellar review (actually I WOULDN'T BE BIASED, but many people are easily corrupted). The FTC had to step in as that is clearly misleading advertising, not a fair and balanced review. What the FTC has done that is so controversial is to extend that enforcement to ANY related payment to the blogger right down to Adsense, eBay, Amazon, Kontera, etc. I guess they had no choice as they had to enforce the law equally to all, large and small.

quicksand: I doubt that they are going to start prosecuting every blogger around. However, they may be using the RIAA/MPAA precedent where they pick a few scapegoats at random and make total examples out of them, such as the recent case where Jammie Thomas-Rasset was hit with a two million dollar fine for sharing 24 measly songs on Kazaa. They didn't go after the seeders who put terabytes of copyrighted content up, they hit a few average small time sharers so that other average sharers would see that example and get scared off, since that's the majority of the traffic. Regardless, the law is the law, and you DO NOT want to get on the wrong side of the FTC as they'll make you sorry you were born. Since it seems that all they want is a disclaimer on the page, it's far better to just give them what they want and rest assured in the knowledge that they'll leave you alone.

Just look at the recent YAZ contraception commercial where they have had to eat their previous claims, or the Activia yogurt ads that were pulled for the same reason. The FTC is very active in monitoring claims that are not substantiated so that we can expect zoka zola to have to prove just how much better their zings go! :)

Alexander Mark: Fortunately it seems that all they want is a disclaimer, so let's just give them one and hope that they'll go away! You know how my Adsense earnings go... wouldn't it be a kick in the butt to write as many Hubs as I have, make pennies per Hub and then still face a Federal prosecution? OUCH! :(

Army Infantry Mom: Thanks! I'll refund you the penny right away! Please don't tell the Feds! :)


CMHypno profile image

CMHypno 7 years ago from Other Side of the Sun

Thanks for all the great information - especially the info that I don't have a 'get out of jail free' card just because I'm based in the UK! One question - would we have to put a disclosure on every single Hub or just one on the profile page?


quicksand profile image

quicksand 7 years ago

Scapegoat is a scary word indeed!

Fortunately, In my blogs and websites I have always maintained a "take it or leave it" attitude when it comes to pointing at affiliate products, without making any referrence to any of the "plus points" of the product concerned.

Anyway, lets hope that zings will not change for the worse. Thanks once again, Hal. :)

 


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

CMHypno, most likely the legislation is going to call for each and every page where claims appear to have a disclosure, so that would be every Hub. I guess we'd better get used to seeing those at the bottom of our pages from now on! :(

quicksand: I have a Hub entitled Whi I Won't Bui an iPhone.

http://hubpages.com/technology/Whi-i-wont-bui-an-i

I trash the iPhone and state that "I'd rather light my BBQ with a couple of hundred dollar bills than buy an iPhone." Still, the Hub is chock full of iPhone accessory ads and I can assure you that it technically violates the new FTC regs as it sits sans disclosure!


Enelle Lamb profile image

Enelle Lamb 7 years ago from Canada's 'California'

Thanks for the tip - I really should watch the news more lol


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Especially in this day and age when creeping regulation is threatening to handcuff the entire population! :(


Freeenergyseeker 7 years ago

Very interesting information. Does this apply only in a situation where your comments specificly recommend one product over another, or does it some how even apply to an article about a general topic but with links to specific products as in affiliate marketing.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

It would seem to me given the information I've been able to read so far that it would definitely apply to an article about a general topic if the product itself was mentioned in the text.


Mighty Mom profile image

Mighty Mom 7 years ago from Where Left is Right, CA

Given the choice, I think I'd take the tax increase instead:-). MM


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Given the choice, I think I'd take an impeachment process... :)


Teresa McGurk profile image

Teresa McGurk 7 years ago from The Other Bangor

This comment in no way endorses any idea, patent, product, or concept mentioned, not mentioned, thought about, forgotten about, or otherwise in existence at the time of writing.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Yeah, but what if you have an ad for dementia on your page? :)


mulberry1 profile image

mulberry1 7 years ago

Thank you, thank you, thank you for writing this. I submitted a news item on this to a social bookmarking site. Everyone there just said "Great, we need to protect the consumer against these unfair or slanted paid reviews". They seemed to totally miss the point that it may apply to their little personal comments and recommendations.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

mulberry1, I appreciate your comment. It is very true that most people would agree that it is a blatant violation of conflict of interest when, say, a tech blogger who reviews a laptop computer and gets to keep it, or is compensated to the tune of hundreds or even thousands of dollars by the manufacturer. To that end, the majority would applaud this law. The important aspect as you have discovered and what everyone has to understand is that WE ALL need these disclosures on each and every page where we discuss any type of commercial product or service as the various ad placement algorithms will key in on those statements and serve directly related ads which will be actionable by the FTC.


Sandyspider profile image

Sandyspider 7 years ago from Wisconsin, USA

Why am I not surprise with the FTC. This is too scary to think about.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Sandyspider: Fortunately it seems (at this time) that a simple disclaimer will deflect the FTC. However, I'm still looking into this and I'll post any information I'm able to gather to direct Hubbers into what processes they should implement. I'm not going through my 1,000+ Hubs to plunk disclaimers on them YET as I'm still trying to determine the exact form of the disclaimer and whether a shorter one than the one generated by DisclosurePolicy.org will fit the bill. Again, I'll let everyone know as soon as I get the final info as the FTC wording is still not finalized!


ethel smith profile image

ethel smith 7 years ago from Kingston-Upon-Hull

I guess if governements start these tricks it will be the death knell for many review sites and the like.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

The FTC is taking this action to stop the abuses, and there certainly are many. There are a LOT of reviewers that get paid in cash or merchandise directly from the manufacturer and these people are the ones that the FTC is targeting directly. They won't be able to "disclaimer" their way out of the receipt of compensation from the manufacturers so they're open to prosecution. For the rest of us who make a nickel or dime off of a product review through the ad services, a basic disclaimer SHOULD suffice, but then again, I'm still researching the exact wording.


Raven King profile image

Raven King 7 years ago from Cabin Fever

Wow, this is serious stuff.


Frieda Babbley profile image

Frieda Babbley 7 years ago from Saint Louis, MO

Wait a minute.  I may be missing the boat here, but are we suppose to put a disclosure in our comments as well?  And are we suppose to put disclosures in comments we post on other people's pages?

So my hubs on bassinettes, baby socks, vintage clothing, even some of my short stories and poems, if there are any products involved at all in those words (of course there's at least adsense on those hubs) thoses all need something whether I'm endorsing or not?

Quite frankly, every single thing in the world can be construed or misconstrued as a product...everything.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Raven King: Extremely serious. The FTC is not kidding around here. There will be some "innocent" bloggers who are going to get smacked hard for earning a few bucks.

Frieda Babbley: By far the best way to proceed is to just plunk a good, strong disclaimer on each and every page. It can be placed on the bottom of the page or anywhere else you want, but it has to be there. As for the comments you place on someone else's page, you certainly don't need a disclaimer for that as you are not profiting from any clicks.


theguru-reports profile image

theguru-reports 7 years ago from Montana

The government needs the money...that's why they are doing it. Its all more of the "change you can believe in" Mind control.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Oh, really? Obama hasn't been increasing deficit spending, has he? Oh! And I thought he was such a nice guy! :(

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