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New FTC Rules and the Absurdity of “Typical Results”

federal-trade-commission-ftc-logo_jpg Starting on December 1, the FTC is dropping a bomb on the world of online marketing. It impacts the use of endorsements and testimonials and from my reading it appears that these new guidelines have nothing to do with ensuring truthful use of endorsements and testimonials, but rather seeks to eliminate them as a form of legitimate marketing.

Disclaimer: I am not a lawyer. Even if I was, I am not your lawyer. This is my rant based on my own studies, experience and interviews with people who are lawyers…but they’re not your lawyers either so there’s no legal advice in this blog.

Parts of these new guidelines are intended to provide better disclosure when it comes to things like blogging about the benefits of a product. Lifting this example from ClickNewz.com, I think it’s clear how this change would be beneficial to the public.

A consumer who regularly purchases a particular brand of dog food decides one day to purchase a new, more expensive brand made by the same manufacturer. She writes in her personal blog that the change in diet has made her dog’s fur noticeably softer and shinier, and that in her opinion, the new food definitely is worth the extra money. This posting would not be deemed an endorsement under the Guides.

Assume that rather than purchase the dog food with her own money, the consumer gets it for free because the store routinely tracks her purchases and its computer has generated a coupon for a free trial bag of this new brand. Again, her posting would not be deemed an endorsement under the Guides.

Assume now that the consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement under the Guides.

Ok, that doesn’t seem so bad. Knowing that someone is benefitting from their endorsement adds a certain level of candor and that’s a good thing.

What bothers me is the apparent elimination of safe harbor in the form of “results not typical.” It used to be that you could share endorsements and testimonials from your best clients. To set the proper context, you’d mention “results not typical.” According to this legal review of the new FTC guidelines, this disclaimer no longer provides safe harbor.

It doesn’t matter if the results are true. They are seeking to restrict free speech, so pardon me if I get riled up over this.

Think about this, Jared eats sandwiches from Subway, exercises more and loses a bunch of weight.

Not too surprising if we consider the axiomatic weight loss formula as follows.

Consume fewer calories than your body burns, and you will loose weight.

So does everyone lose weight that tries the “Subway Diet”? Hell no. But it has nothing to do with subway. People don’t sustain diets for countless reasons. What this means is that the typical result is that you don’t lose weight on your diet.

Typical results in network marketing: you lose money, end up with products in your garage and get really pissed.

Typical results starting a restaurant: you fail.

Typical results starting any business: you fail.

Typical results with a life coach: you get annoyed upon realizing you’re responsible for your lack of results and quit.

Typical results at a gym: you don’t go.

Typical results after buying Get The Edge from Tony Robbins: You listen to the first CD (maybe) and the rest sits on the shelf until it’s sold in an estate auction.

Are any of these typical results the fault of the business? NO! They’re the result of human nature. If the FTC says you can only share “typical” success stories, you’re not going to hear about anyone doing anything of note again.

This is complete and total BS and is further proof to my assertion that no one at the FTC could operate a business in the real world (successfully) if their life  depended on it.

Laws made poser-noob-bureaucrats are bad for the country. Either get rid of the FTC or fire all the pencil jockeys who work there.

Here’s another good article on the subject.

Now as a friend pointed out to me this morning, this kind of stuff happens from time to time.

The rules get changed.

You adapt.

Right now, people I talk to seem really confused and concerned about these changes. Ultimately WE THE PEOPLE will specify to the FTC how they will serve us because they exist at the pleasure of WE THE PEOPLE.

In the meantime, the best approach is to figure out what can be done and get back to work.

How about you? Are you concerned about these new guidelines?

How do you think will they affect your marketing efforts?

Leave a comment below.

7 Responses to New FTC Rules and the Absurdity of “Typical Results”

  1. David: Great post- I agree with what you said and as mentioned at the end – get on with our business, don’t let this stop us from succeeding. There is always more than one way to do things.

  2. Dave S. says:

    The FTC doesn’t have enough people to enforce the laws that are currently in place. So adding more laws will make them that much more ineffective than they already are. It’s business as usual for me.

  3. Brother Paul says:

    What we’re putting up, and again, like the article states, we are not lawyers, and if we were , we definitely ain’t your lawyers, the following statement: The average person will make absolutely nothing with this offer, mostly because most people choose to not follow through with the energy required to make a success of themselves, or for other personal choice reasons, which we have absolutely no control over, so be aware that purchasing this product, reading the material, and doing absolutely nothing will ensure that you will make what the average person makes, which is absolutely nothing.

    The reason we do this is because as far as we can see the FTC does not state that you cannot explain why the average person will not succeed.

    Make it a great day!

  4. Marie says:

    Thank you for enlightening us Dave. Yes I too am brassed off with yet more nonsense from those who in their shortsightedness or is it deliberate, claim to protect us but actually take away our own powers of freedom to reason. Like the others its business as usual for me..I will never give up in this and my faith in God.

  5. Great points. Like you, I’m not a lawyer. But I think the key to doing what you suggest–moving on with your business–is to MEASURE typical results. There is no case law on this yet, but there are ways to do that, using surveys, that can get exactly the kind of results the FTC is looking far. And lots of marketers are already using those surveys very effectively.

  6. Great article Dave!

    I hadn’t heard about this yet, and I agree with everything you said. Sounds like all of us are going to need to stick together and keep each other informed about the new laws coming up to restrict our freedom. Worse, we will need to have reasonable legal advice available that we can depend on. I’ve found excellent Attorney Services from pre-paid legal services, such that I fully support it. I have more information about it at my personal site: http://www.johndomzalski.com. Keep up the good work my friend!

  7. Dave, Thanks for this great article. I passed it along to many of our clients.