FTC. Internet Marketing Strategies.
Posted By Francine on August 28, 2010
Are you an information marketer? Do you sell products and/or services on the Internet, including social media sites? Do you consider yourself an eCommerce entrepreneur? Do you use internet marketing strategies as part of your business plan? If you answered “yes” to any one of these questions, then listen up!
Back in January 2007, you may recall that the FTC (the Federal Trade Commission) the consumer watchdog arm of the US government hosted a workshop to discuss negative marketing. In particular, the FTC was concerned with negative option offers, such as:
- Pre-notification negative option plans – This type of negative option plan, such as music, video, audio, or book clubs will send goods to a consumer and charge them if they fail to respond to the offer, such as the monthly book-of-the-month.
- Continuity plans – Here, the consumer agrees to receive periodic shipments or services, which they continue receiving until they cancel, usually in writing.
- Automatic renewals – This negative option plan is where the seller, such as a magazine seller, newsletter seller, SAAS (software as a service), or a hosting or domain name provider renews the consumer’s subscription automatically when it expires, and then charges for that service.
- Free-to-pay or nominal –fee-to-pay conversion offers – Here, the seller offers a trial version, which converts to a paid or upgraded version, unless the consumer takes affirmative action in the form of canceling or returning goods by a specified date.
The outcome of the workshop, although it occurred 3 years ago, remains relevant. Therefore, if you fit into the category of a seller doing any one of the above, this may be the most important blog post you ever read. And the truth is, if you don’t pay attention now, you may end up paying dearly later. If you know anything about the FTC, you know they don’t play when it comes to consumer safety.
In the report, which resulted from the workshop, the FTC identified 5 principles to guide internet marketers who employ negative option offers. Marketers should:
- Disclose material terms of the offer in an understandable way
- Make the appearance of disclosures conspicuous and clear
- Disclose material terms of offer before consumer pays
- Obtain consumers’ affirmative consent
- Not stand in the way of promised cancellation procedures
For specific information on how YOU can stay safe and protect your valuable assets, consider investing in an attorney to interpret the above principles, as they relate to your internet business.
Until next time, I’m Attorney Francine Ward; THINK Asset Protection!