Website Legal Compliance – FTC Accelerates Crackdown On Fake News Sites

We’ve all seen headlines in search results like this one – “XYZ Exposed: Miracle Diet or Scam”. And perhaps we actually believed there was objective reporting or unbiased commentary behind the headline. But after reading the web page, it was clear that the headline was just a clever way to catch your attention and lure you to a sales page with an aggressive sales pitch.

The Federal Trade Commission (FTC) has seen these headlines too, and the FTC doesn’t think they’re clever at all. In fact, the FTC believes they constitute deceptive and unfair trade practices, as indicated by the FTC’s accelerated crackdown on affiliates of a popular diet drink with aggressive weight loss claims.

Modus Operandi

The modus operandi of these sites was to start with attention grabbing headlines such as the one listed above and these additional ones – “News 6 News Alerts,” “Health News Health Alerts,” or “Health 5 Beat Health News.”

The sites presented what appeared to be a skeptical commentator who raises the question of whether the diet drink is really effective. The commentator appeared to be objective; however, after a few paragraphs the commentator would conclude that use of the diet drink would result in a 25-pound weight loss in 4 weeks – all this without changing diet or exercise according to the FTC.

The prices for the supplement ranged between $70 and $100.

The FTC’s Claims

When the FTC originally initiated law suits against these sites, Charles Harwood, Deputy Director of the FTC’s Bureau of Consumer Protection stated: “We are alleging that nearly everything about these Web sites is false and deceptive”. In addition, the FTC pointed out that the defendants aggressively promoted the deceptive ads by spending millions of dollars for placement on high volume websites resulting in millions of views by consumers and substantial sales.

Specifically, the FTC contended that the offending sites –

* failed to disclose their material relationships involving the payment of affiliate commissions with the merchants of the products;

* failed to produce independent tests to support the claims made prior to public dissemination;

* included a section of “consumer comments” that were completely fabricated;

* used infringing logos of reputable media outlets such as ABC, Fox News, CNN and Consumer Reports to give the false impression of credibility; and

* misappropriated the image of a French reporter for use on the sites.

The Settlements

The cases brought by the FTC were against six affiliates of the merchant that manufactured and supplied the weight loss supplement.

In the settlements, the defendants agreed that they will permanently cease their allegedly deceptive practice of using fake news websites. In addition, the settlements require that the defendants cease making deceptive claims about their other products, including work-at-home schemes and penny auctions which most of them promoted.

The big hammer in the settlements included fines in an aggregate amount which represented the affiliate commissions the defendants received through their fake news sites.

These settlement results clearly indicate that the FTC aggressively pursued every dollar they could under the circumstances (the final amounts left most of them with few real assets, if any):

* one defendant’s $2.5 million judgment was suspended when he pays $280,000 and records a $39,500 lien on his home;

* another defendant’s fine of $204,000 was suspended pending the payment of $13,000 plus the proceeds from the sale of a BMW automobile, and

* still another defendant was suspended pending the payment of almost $80,000 over a 3 year period.

Conclusion

The take-aways from these cases include –

* fake news sites are virtually guaranteed to get you sued by the FTC,

* ditto for fake testimonials or user comments,

* diet supplements of any kind are high on the FTC’s radar screen for regulatory scrutiny,

* the FTC is serious about enforcing its guidelines that affiliates are required to conspicuously disclose the fact that they are paid commissions for endorsements, and

* consistent with the FTC’s long-standing policy, advertising claims should be substantiated prior to public dissemination.

The FTC continues to make it absolutely clear that the days of the “Wild, Wild West” on the Internet, when it was open season on deceptive marketing practices, is clearly over for good.

This article is provided for educational and informative purposes only. This information does not constitute legal advice, and should not be construed as such.

Prepaid Legal Review – Learn What Your Upline Doesn’t Know and Can’t Teach You

Let’s review Prepaid Legal. They are a company, that for a monthly fee, one obtains a membership which provides legal counsel whenever necessary. Prepaid was founded in 1969 by Harland Stonecipher. Though it did not begin as an MLM company, it was recognized as such by the 1980s. By the late 90s, at prepaid Legal was considered the 33rd fastest-growing company on the NYSE.Prepaid is also the listed on Forbes 200 best small companies list.

So how does Prepaid Legal work? For around $300 per year, a customer purchases on annual membership. $17 and $26 monthly plans are available. These plans make available to you legal advice on everything from writing wills, buying homes or just be familiar with your basic legal rights. There are more than 60,000 legal forms on the website and members can utilize. Essentially, members use the phone number on their membership card to contact a lawyer that specializes in the area they need help in.Plans vary by state.

So why would anyone want to use Prepaid Legal services? It’s probably easier than panning through the phonebook looking for a lawyer’s number that you need. The company points out that only the wealthiest 10% of people use legal services on a regular basis, and since the rest of us don’t, we might be at a disadvantage.Is the service necessary?
My opinion is not important, since over 1 million people have decided is necessary.

If you want to have a Prepaid Legal business, there is little more that needs to be mentioned. Apparently, the only way you can join, is by filling out an application for enrollment through their website. It costs $49 to start up a business and this includes materials, training, support, Prepaid Marketing Services, marketing supplies and Online Associate Services. Prepaid Legal is very excited about their timing in this industry. They state they are at 2/10 of 1% of growth potential and don’t anticipate critical mass hitting until 2%. Critical Mass is when a company reaches a point where they grow tremendously in a short amount of time. In my opinion, a good time to join a company is before they hit critical mass.

I found a compensation plan a bit of a challenge to comprehend. Prepaid Legal Associates are paid in three different ways. The first way to get paid is by getting commissions on every membership to Prepaid Legal that you sell. The second way to get paid is when you sign-up other people into the business and receive commissions for that. The final way to get paid is via residual income on your team’s success. The part that confused me was that they pay on five different levels according to how many memberships you sell per month. Also, they pay you an advance commission for the annual memberships they sell. For example, if you sell a Prepaid Legal membership to someone, you get paid a years worth of commission. But, if that person cancels their membership before the year is up I will get what is called a “chargeback”. A chargeback is exactly what it sounds like it is. You have to pay back any commissions earned by member cancels early. I’m not a fan.

Traditionally, when joining a company like this, you’re going to be taught approach every person you’ve ever known and try to get them to either sign on as a member or join your team. Let’s face it folks, this is the hard way of doing things. Wouldn’t you rather talk to people that actually care about joining a network marketing company? Wouldn’t you rather use a pain-free, surefire way to gain success in this industry?

Agent’s Commission – How Much Should A Seller Pay?

When selling a house – is it practical for you to have it done through a real estate agent? If you want it sold fast, then the most logical thing to do is have it listed through an agent. These professional experts have experiences that can expedite the sale. But some are wary about employing an agent because of the commission outlay, an amount which could be quite material.

How much commission does a house seller have to pay to his agent? This has been a perennial question asked by a seller? Maybe there had been no straightforward answer given to this. All that has been divulged is that the agent’s commission is a percentage of the total contract price of the property sold. And that the commission is paid upon culmination of the transaction.

The truth about commission- there is no standard and legal commission rate. In reality, the setting of a fixed commission by real estate agencies is prohibited. This could be the reason why the amount of commission is not clear. Each agency has its own rate.

Real estate agencies can actually charge any commission they would want. It all depends on the people, the seller for that matter – how much this seller is willing to share to his or her agent from the proceeds of the sale. The commission can be very high as there is no ceiling. What keeps it down and reasonable is competition. Even in this setting of commission – the economic law of supply and demand seems to penetrate. The presence of many agents keeps the price down.

The commission is internal arrangement between the agency and the agents. The company can set a maximum and minimum rate for the agents and the latter are allowed to negotiate the commission with the clients. If the agent is under a broker, the commission has to be shared between them. Upon listing of the property, the agent already has stipulated the percentage of commission to be set upon sale. If this agent wants to lower this percentage, he has first to seek approval from his supervising broker. This can be done as there really is no fixed commission rate and the arrangement of rate is just internal.

But then there is one restriction – the agent can never divulge to other real estate agents the amount of commission to be put on top of the selling price. And in the same manner, real estate companies are not supposed to expose to any agent outside of the company their implemented rate. The commission earned on the sale is a split between the listing company or broker and the agent. The sharing between them is again a matter of agreement in-between.

Whatever is the amount of commission, a seller should know that he or she can haggle with it. The rate of commission, in this stiff competition, is negotiable. The seller can always search for better deal which will mean less expense for him or her.