Who’s afraid of the FTC’s new guidelines?

social media's magic ingredientAnswer – ” Not you if you’re operating under an authentic business model.”

Social media is all about information flowing freely and easily.    When a company engages in questionable business activities – social media is there, allowing customers to share what it’s like to do business with someone.  However, there have always been business owners who don’t want to play by the rules.  Instead of gathering authentic testimonials – they resort to crafting lies to promote their product or service.   They create “faux blogs” to promote their products – complete with fake testimonials.  They hire celebrities whom you trust, banking on that trust being transitive.   Well, the US government (via the FTC ) has been receiving complaints and is about to join the game.  They are in the process of crafting some new “rules” for the game of doing business – both off line and online!

The FTC stands for the Federal Trade Commission- a US government agency which is charged with the protection of American Consumers. The FTC was founded in 1914 – in the era of “trust building and trust busting.”  Since then, the agency’s powers have been enhanced to include all “unfair and deceptive business acts or practice.”  The most recent (1980)  guidelines are receiving a “face lift” for the new millennium – and may be a cause for concern for those who have been operating outside the bounds of “authentic” marketing and business building.

It’s not just brick and mortar businesses that have to worry about the new guidelines. Bloggers and internet marketers are definitely affected by the latest FTC guidelines that ban deceptive or unfair business practices.  If you’ve embraced my 3 step  authentic business success secrets formula – then you’ll probably welcome the relief offered by these new guidelines -written with social media marketing in mind.

New guidelines are being drafted which in their current state would allow the FTC to go after bloggers for any false claims or failure to disclose conflicts of interest.   The current draft of the guidelines also allows the FTC to go after the companies who partner with bloggers as well.

By the way, this same language also applies to celebrities who endorse products.  It looks like those D list celebrities who endorse such products as Cash 4 Gold had better take a good hard look at the reputation of the company who wants to hire them.

So, if you’ve written a glowing testimonial for a product you’ve never used – you might find yourself in as much hot water as the person for whom you wrote the testimonial.

If you’ve written a glowing review of a product you received  for free and you failed to disclose that you received the product for free –  again, you might find yourself in the same hot water.

Mary Engle of the FTC tells why in this video:

It  appears that the FTC is joining in the effort to keep the communication going on via social media “clean” and free from manipulation.

If you’re running an authentic business model – you have little to fear with the new guidelines.

If the testimonials you feature on your blog or web site are real – both the ones from your customers and the ones you have written for other bloggers and internet marketers – then your compliance with the guidelines will be easy peasy lemon squeazy.

For most ethical business people and bloggers, you may need to disclose the fact that the links in your blog post are affiliate links – but other than that – the new rules shouldn’t cause most authentic and ethical business owners and bloggers much concern.

If however, you’ve been less than authentic in your marketing communications – then you may have a serious problem on your hands when the guidelines are finalized – expected some time in 2010.

Comments

  1. says

    This is great, I wish the UK government would do something similar… However, I wonder how these rules will be enforced? I can’t help thinking it’s just a publicity stunt designed to make people believe that something is being done, when in fact nothing will really change that much.
    .-= Amelia Vargo´s last blog ..Local SEO and hCard Microformatting =-.

  2. Kathy says

    Amelia,

    US Consumers can submit a complaint to the FTC here:
    https://www.ftccomplaintassistant.gov/

    The FTC won’t respond to a single complaint – but rather they use these complaints to “detect patterns of wrong-doing, and lead to investigations and prosecutions. ”

    In other words, you can’t report someone to the FTC and expect them to make it right – but if your report is one of many – it can cause prosecutors to take a good hard look at how you run your business.

    I think you’re right though when it comes to people’s perception of what is happening. I do think there are people who think they can report someone to the FTC and the US government is going to criminally prosecute a business for having misleading testimonials on their site.

    You also bring up a good point – this ONLY applies to US business owners. Business owners in the UK don’t have to worry – yet. 🙂

  3. says

    Hi Kathy – I guess the new rules will protect from those scammy internet marketers who get their friends to write glowing testimonials for $4000 products.

    I haven’t been about much this year so I haven’t taken a lot of notice of the new rules. I guess I should check them out.