Updated: Feb 14, 2013
As of July 1st 2009, the FTC (Federal Trade Commission) announced new guidelines for Internet advertising in an effort to increase consumer protection. In particular, the FTC has filed several cases against operators of deceptive and illegal job and money-making scams. These regulations are nothing that common business integrity would not entail. It should be noted, that, as with most government regulation, there is a substantial amount of interpretation. Globally, more individuals day after day are turning to the Internet as a means of commerce, income, and alternative careers. Thus the silver lining of this situation is a benefit to entrepreneurs. Below you will find a synthesis of the new FTC guidelines, specifically income claims, endorsements, and testimonials, and an extended explanation of how they affect SFM members and affiliates.
What the regulation says:
With regards to new media, the FTC has defined “endorsement” as any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, or other identifying personal characteristics of the primary organisation), that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed are identical to those of the sponsoring advertiser. The question then turns on whether the speaker is acting independently, or on behalf of the advertiser or agent ( i.e. the statement would be an endorsement of an overall marketing campaign).
It should be noted that postings by participants in network marketing programs are deemed to be “endorsements” for the purpose of FTC regulations. Hence, lack of control over the dissemination of such endorsements does not relieve reliability of the advertiser.
What does this mean for you:
- All advertisements must be truthful and non-deceptive
- All advertisers must have evidence to back up their claims
- Advertisements cannot be unfair (i.e. a material representation or omission that is likely to mislead a consumer acting reasonably under the circumstances, such as an ad that lacks a reasonable basis).
- Relationship between the endorser and advertiser must be disclosed (i.e. you as the internet marketer must disclose your relationship with The Six Figure Mentors, the principal seller).
Regarding use of the company’s names:
- The Six Figure Mentors
- Six Figure Mentors
- The Six Figure Mentor
- Six Figure Mentor
- The Digital Experts Academy
- Digital Experts Academy
- Digital Expert Academy
- Digital Experts
- Digital Expert
Effective immediately, members are prohibited from using and must halt use of the SFM and DEA company names in any domain names, Facebook, Twitter, or other social site profiles.
What is and isn’t allowed?
Not allowed: mysixfigurementorsbiz.com
(Here, the domain name contains the company name “sixfigurementors”)
(In this example, the domain name mybusiness.com contains the company name in the sub-domain and is allowed)
Why is this not allowed?
This is intended to prevent any misinformation about The Six Figure Mentors or Digital Experts Academy online.
It has happened in the past. There is the potential for any company to be put under investigation by an international regulatory body if, for example, a member was using a non-compliant domain for their personal website that included“The Six Figure Mentors” or “Digital Experts Academy”, which was accompanied by income claims. It will appear on the surface that the company The Six Figure Mentors would be making the claims.
ALSO NOTE: Adding other words then using the phrase as a domain will not make a domain name compliant. An example would be adding “the” before Six Figure Mentors or Digital Experts Academy.
The reason this policy is in place is so people won’t be confused with which sites and domains are owned by the company and which ones are owned by marketers.
Additionally, from a marketing perspective, it’s far better to pick a domain name that promotes your site/service. Anything that mimics the corporate site would only confuse the customer.
Income & Claims
- The Six Figure Mentors is not an Income or Business Opportunity. We are an education platform and community for entrepreneurs. Marketing that portrays The Six Figure Mentors as a “make money” or an “easy money/get rich quick” opportunity is strictly prohibited. The Six Figure Mentors must only be marketed as an education and resource provider. Under this pretext, it can then be stated that The Six Figure Mentors can teach you how to market online, and THEREBY potentially increasing your income as well.)
- Both Expressed and Implied Claims must not mislead the consumer in any way. Meaning, any adjectives you use in your ad copy must be chosen with the idea in mind; that if a specific result or performance is either directly said or implied, it MUST be infallibly true and not intended to mislead the customer.
- Regardless if true or not, verifiable, fictitious, or hypothetical, monetary income claims (anything with numbers) are not allowed in any form. This includes websites, domains, auto responders, blogs, videos etc. These regulations apply to keywords and as well as ad copy. The new advertising policy considers the context of the ad – words, phrases, and pictures – to determine the message that it conveys. As noted, EVEN IF the primary message depicted in an advertisement/testimonial is accurate and true, it could still be considered deceptive or misleading.
- The FTC does not allow advertisers to make any claim or statement that is above the result that the average person could expect. For example, even if you made $10,000 in one week and had the ability to prove this, this still does not mean that you can make this statement unless you are ALSO willing to give a full breakdown of what percentage of other people also make this amount of money. As noted, you would also have to disclose what the average person should expect to avoid deception. Since The Six Figure Mentors is not an income opportunity, and members generate income from marketing other products, there is no way for SFM, or you, to accurately disclose the financial results of all members.
- Inferred claims and lifestyle claims and lifestyle images (i.e. pictures of you and your car, house, private jet etc) may be used as long as they are true and not misleading in any way and the official income disclaimer (below) is used. All marketing materials and website must meet the following criteria:
- The advertisement or adcopy must be absolutely true.
- The advertisement must be clear, conspicuous, non-deceptive, and not mislead in any way.
- Remember, even if the advertisement is truthful and factually accurate, one must ask, ?an this be misinterpreted or misconstrued??If so, it is non-compliant.
What does this mean for you:
- Use qualitative metaphors that describe lifestyle changes, and the change of the consumer? current situation. Avoid such obvious connotations like “create a full time income” and “replace your job.”
- No unreasonable, inflated, or exaggerated claims that that may misrepresent the reality of success for the prospects. This includes talking about “time-frames” for success. Such as: “all of this in just 60 days” and “in the first month”
- TIP: Give your ads a “gut check.” If the ad sounds exaggerated or hyped it is likely going to get you in trouble. As yourself if the ad is something you would want your grandmother to read. Believe it or not, this is the rule of thumb Google uses to a certain degree!
What you should be promoting is the actual benefit and features of SFM ITSELF.
- “An education for tomorrow’s entrepreneurs”
- “Learn how to market anything, to anyone, anywhere in the world”
- “Learn the secrets of Internet marketing not taught anywhere else”
- “Entrepreneurs are created, not born”
You can also use demographic specific, emotive tag lines such as:
- “Have eggs/coco pops with your kids every morning”
- “Learn how to market and write your OWN paycheck
What the regulation says:
If the advertiser does not have substantiation that the endorser’s experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.
This new regulation eliminates the “safe harbor” rule previously enforced, meaning that non-typical results accompanied by “results not typical” disclaimers, are no longer sufficient to defend against deception. This rule applies to both testimonials and direct claims by advertisers.
As noted previously EVEN IF the primary message depicted in an advertisement/testimonial is accurate and true, it could still be considered deceptive if:
- The testimonial conveys to consumers that the results are representative of what consumers will generally achieve with the advertised product or service in actually, variable, conditions of use; AND
- The advertiser does not have adequate substantiation for that claim.
Why this is not allowed:
Showing someone your bank statement or proof of payment is called inducement and taken very seriously by the FTC. As long as your testimonial is honest, not intended to mislead, and does not include any income claims, you will be compliant with FTC regulations.
What does this mean for you:
- Must clearly and conspicuously disclose the generally expected result and how the product will perform under normal use.
- Must eliminate income results entirely. This includes: screen shots of income, bank statements etc.
- Lifestyle and inferred claims may be allowed as long as they are true and not intended to mislead. (i.e. You cannot stand in front of your Ferrari and say you make more money than your doctor, if in reality its your neighbours car and you actually drive a Ford Focus and still live with your mum.)