The FTC alerted consumers to the truth behind online advertisements connected to affiliate marketers in a September 20th blog post titled, What’s affiliate marketing? Should I Care? The FTC took action against an online marketing operation this summer over a low-cost trial scam involving tooth-whitening products. According to the FTC, many consumers remain unaware that merchants use affiliate networks and marketers to promote products and services and that affiliates are paid if they make a purchase, sign up for a “free” trial, or simply click on an advertisement.
The FTC believes that affiliate marketing is an acceptable—and useful—method for merchants to promote products and services provided that it is conducted truthfully. The affiliate structure itself increases the risk of misleading consumers through deceptive advertising, particularly in the context of trial offers involving subscriptions or multiple product charges in the eyes of the FTC. Notably, the FTC considers the terms and conditions underlying these transactions when evaluating the truthfulness of such campaigns.