Michael Fortin wrote an interesting post today called a "Disturbing Trend in Internet Marketing". The trend isn't all that new, though. As Michael Fortin points out when he mentions the Internet Marketing Sins report his wife put out over two years ago. Other people like Markus Allen have been trying to get the same kind of message across for as far back as 2003, if not earlier.

But what interested me most about Michael Fortin's post was this statement:

"Even the term “information products” is debatable, too. Because the “products” most gurus sell today aren’t really information. What they really are selling are business opportunities packaged as information and sold under the guise of training systems."

This is something Attorney Michael Webster opened up my eyes to and has tried to get across to the some of the people selling training. Because there's more to it than "I just sell training so I'm not a business opportunity" in many cases according to him.

Here's a great write up he did giving some great insight about this:

BlogMasterMind, Testimonials and Seller Assisted Marketing Plans (note, he mistakenly refers to them as "affiliate marketers" instead of "internet marketers")

Business Opportunity Laws And How They Make It Easy For FTC to Win Cases and Shut Down Companies

According to this FTC page listing State Offices Administering Business Opportunity Laws:

"Twenty-six states have business opportunity laws. Most of these laws prohibit sales of business opportunities unless the seller gives potential purchasers a pre-sale disclosure document that has first been filed with a designated state agency.

State business opportunity laws typically cover every imaginable type of business opportunity that might be offered. If a business opportunity seller is not required to provide pre-sale disclosures by the Franchise Rule, these disclosures will almost always be required by the laws of the states listed below.

The disclosures required by state business opportunity laws differ, and usually provide more abbreviated information than the FTC’s Franchise and Business Opportunity Rule requires. However, most of these laws provide important rights and remedies for business opportunity investors, including required security bonds to cover investor losses.

If you are considering purchasing a work-at-home or other business opportunity, and reside in a state with a business opportunity law, we encourage you to find out more about the protection provided by your state statute before you invest."

Again referring to attorney Michael Webster's blog here he explains why it is so much easier to shut down businesses when they violate business opportunity laws than when they violate Section 5 of the FTC Act. Here's what he says in his post:

"Section 5 actions by the FTC are lengthy and involve a lot of resources; whereas Biz Op actions are relatively easy: You are Biz Op, but you have no mandatory disclosure document so the FTC simply shuts you down."

So not only are Biz Op actions easier to enforce, they're much cheaper to enforce, too.

Syndicates Are Sexier, But "No Safe Harbor" Violations Are Easier

Again I'll turn to observations made by attorney Michael Webster. He made these particular observations when the FTC Published their Final Guides Governing Endorsements and Testimonials when he published this post about Testimonials and Disclaimers explaining how while many bloggers and marketers were debating and worrying over the Endorsement sections, they were completely overlooking the more important introduction of the "No Safe Harbor" rule for testimonials such that "If the testimonial is an outlier, then the company has to report "the typical consumer experience".

He then goes on to note in that same post about Testimonials and Disclaimers (which also has great information about FTC prosecution strategies):

"This means that they cannot make any earnings claim because they don't have any typical consumer experience data.  But they will continue to make these claims, making it an easy case for the FTC to prosecute."

If It's So Easy And Cheap Now, Why Doesn't The FTC Prosecute?

Speaking of "no safe harbor", even just a random run through of products on this Joint Venture Launch Announcement list shows NUMEROUS examples of sites with income testimonials where I would be shocked if the publisher has collected "typical consumer experience data".

So if it's so cheap and easy to enforce violations of "no safe harbor" rules and Business Opportunity registration violations why doesn't the FTC prosecute? A few reasons come to mind:

  • Lack of resources and funds. Seems doubtful since it would seem that this type of prosecution would be MUCH less expensive than their Operation Shortchange crack down and other similar FTC "operations" targeting large numbers of companies at once.
  • The FTC doesn't deem the target market "vulnerable" enough. Personally, my money's on this one.
  • They will and just haven't done so yet.
  • Political reasons. Maybe it's a stretch, but I thought I'd throw it in to see what kind of feedback I might get on that one.

Related documents:

Related posts:

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The Fake News Phenomenon Continues…

Over the years I've tracked literally thousands of fake news sites and fake blogs. At one point it seemed like they were going to go away…but now it doesn't seem like they ever will.

In fact most marketers using fake blogs seem to believe that placing the word "Advertorial" at the top of a page means that they can then do whatever the heck they want…including:

  • Including lots of fake comments in a comments section.
  • Claiming that their fake story was seen on ABC, CNBC, CNN and other major media outlets
  • Putting advertising sections WITHIN the advertorial (huh?)
  • Putting real news video footage within their fake news stories

Of course many of them just don't use an advertorial disclaimer at all. One thing's about 99% certain (OK maybe 100%)…you should more than likely AVOID any "business opportunity" that these fake news sites promote.

The following video shows how widespread and bizarre the fake news phenomenon continues to be:

The following graph from Compete.com shows the relative traffic levels of the fake news sites NewsDaily7.com, News-11-Today.com as compared to the Federal Trade Commission website, FTC.gov (Even though the fake news sites appear to be buying a lot of traffic – and probably some really cheap traffic).  Attorney Michael Webster who specializes in Misleading Advertising Law has suggested that, "suggested that anytime a scheme is more popular than the regulator who oversees it and hundreds if not thousands things like it: RUN AWAY. Don't stop to think, just RUN AWAY."  That might not always be true of course, but my guess is that MOST of the time it will be.

NewsDaily7.com, News-11-Today.com, & FTC.gov at Compete

NewsDaily7.com, News-11-Today.com, & FTC.gov at Compete

The following is a list of the sites covered in the video – these are just a handful of the total number of fake news sites being promoted right now:

  • www. 100khomejobs .com
  • www. 100konlinejobs .com
  • www. 24hourwallstreetnews .com
  • www. 3newsinsider .com
  • www. 37actionnews .com
  • www. 6newsonline .info
  • www. 7newsdaily7 .com
  • www. 9newstonight .com
  • www. a1reviews .net
  • www. aboutmoneymaker .com
  • www. americanjobsweekly .com
  • www. americanmorningfix .com
  • www. athomemoms .com
  • www. businessgazette .net
  • www. california-chronicle .com
  • www. canadafinancenews .com
  • www. career-digest-weekly .info
  • www. careernewsinsider .com
  • www. careertrendnews .com
  • www. cashmagnet .com
  • www. certifiedjobs .net
  • www. cflnewstribune .com
  • www. channel4reports .com
  • www. channel9investigates .com
  • www. chroniclenews .info
  • www. chicago-sentinel .com
  • www. citypressnews .com
  • www. cnbc20 .com
  • www. cnbc20 .org
  • www. consumer-reports-weekly .com
  • www. consumer-weekly .com
  • www. consumer-weekly .net
  • www. consumerhealthnewsonline .com
  • www. consumernews24 .com
  • www. consumers-daily .com
  • www. consumerstips-weekly .com
  • www. consumertipsonline .net
  • www. consumertribune .com
  • www. consumerworldnews .com
  • www. daily-gazette .com
  • www. daily-news-herald .com
  • www. daily-news-now .com
  • www. daily-tribune-news .com
  • www. daily6news .com
  • www. dailynews17 .com
  • www. dailynews2 .com
  • www. dailynewsjournal .us
  • www. dailywebnews .net
  • www. dailyjobreports .com
  • www. dearborndailynews .com
  • www. detroit-sentinel .com
  • www. detroittribunenews .com
  • www. discountes .com
  • www. dropsomepuonds .com
  • www. entrepreneurobserver .com
  • www. eveningnewsjob .com
  • www. financedailyny .com
  • www. floristweekly .com
  • www. gazette-daily .com
  • www. gazettenews .net
  • www. globaljobnews .com
  • www. globalmarketingoffers .org
  • www. googlejobsearch .com
  • www. gulfcoastnews9 .com
  • www. helpofhealth .com
  • www. hobbynewsnow .com
  • www. home-job-report .com
  • www. home-job-report .net
  • www. home-job-report .org
  • www. homejob-review .com
  • www. homejoboptions .com
  • www. homejobsnews .com
  • www. honestjobsonline .com
  • www. houstonfinancenews .com
  • www. imvunewsreports .com
  • www. insidemoney .net
  • www. insiderbusinessnews .com
  • www. insidernewsteam .com
  • www. internetjobnews .net
  • www. interenetnews6 .com
  • www. ionline6news .com
  • www. jcg3news .com
  • www. jobsathomeplus .com
  • www. joblistingnews .com
  • www. jobnews6 .com
  • www. jobopeningsnews .com
  • www. jobpositionsearch .com
  • www. jobsalertweekly .com
  • www. jobsnewshome .com
  • www. jobtribunes .com
  • www. ktvu7news .com
  • www. la-businessnews .com
  • www. la-sentinel .com
  • www. lasentinelnews .com
  • www. legitcareeronline .com
  • www. legitimatehomejobs .org
  • www. localgazettenews .com
  • www. localjobnews .net
  • www. localnews22 .com
  • www. localnews45 .info
  • www. localnewstodayonline .com
  • www. madisonchronicle .com
  • www. manage-finances .com
  • www. manhattanbusinessreport .com
  • www. melbournemetronews .com
  • www. miamicitypost .com
  • www. money2news .com
  • www. mountainnewstoday .com
  • www. myworkathomestart .com
  • www. new-yorkcitynews .com
  • www. new7tv .info
  • www. news-11-today .com
  • www. news-11today .com
  • www. news-6-insider .com
  • www. news-channel9 .com
  • www. news-7daily .com
  • www. news10-today .com
  • www. news12report .com
  • www. news12reports .com
  • www. news13jobreports .com
  • www. news13jobstoday .com
  • www. news13report .com
  • www. news3health .com
  • www. news6alerts .com
  • www. news6online .info
  • www. news6reports .net
  • www. news7income .com
  • www. news7localreport .com
  • www. news7newyork .com
  • www. news7tribune .com
  • www. news8report .com
  • www. news9courier .com
  • www. news9network .com
  • www. news9now .net
  • www. news9online .org
  • www. news9tonight .com
  • www. newsdaily7 .com
  • www. newsdaily7 .net
  • www. newsforce7 .com
  • www. newsnetaustralia .com
  • www. newsreportdaily .com
  • www. newstodayat5 .com
  • www. newstoday28 .com
  • www. newstv6 .com
  • www. newyork-tribune .com
  • www. newyorktribunedaily .com
  • www. newyorkweeklynews .com
  • www. northwest-news .com
  • www. ny-sentinel .com
  • www. ny-weekly .com
  • www. nygazettejournal .com
  • www. nyguardian .com
  • www. nynewsdigest .com
  • www. omgnews .info
  • www. onlinecashbooster .com
  • www. onlinecashreviews .com
  • www. onlinejobnewsletter .com
  • www. onlinejobreport .com
  • www. onlinejobreports .com
  • www. onlinejobsnews .com
  • www. onlinemoneystash .com
  • www. onlinenews10 .com
  • www. onlinenews12 .com
  • www. onlinenews4 .com
  • www. onlinenews6 .com
  • www. onlinenews6 .net
  • www. onlinenews7 .com
  • www. onlinenewsat6 .com
  • www. onlinenewstribune .com
  • www. orlando-tribune .com
  • www. pacouriernews .com
  • www. princetonbusinessreview .net
  • www. readlatestnewsonline .com
  • www. readthetimesnews .com
  • www. reia9news .com
  • www. reviewstimes .com
  • www. riversidedailytribune .com
  • www. san-diego-today .com
  • www. sanjose-herald .com
  • www. sandiegobusinessobserver .com
  • www. sbscnews .com
  • www. search-engine-job .com
  • www. skilltrends .com
  • www. skilltrends .org
  • www. startworkfromhomejob .com
  • www. texasfinancenews .com
  • www. the-losangeles-gazette .com
  • www. theconsumerherald .com
  • www. theconsumerherald11 .net
  • www. theconsumertips .com
  • www. thedailyfinancialtimes .com
  • www. thedailywork .com
  • www. theentrepreneurweekly .com
  • www. tribune-gazzette .com
  • www. thehomebizcentral .info
  • www. thelosangelesjournal .com
  • www. thenewyorkdailynews .info
  • www. theposttribunenews .tv
  • www. thewebnewsdaily .com
  • www. todayseconomist .com
  • www. tonyscashkit .com
  • www. top3homebizreview .com
  • www. tylerneill .com
  • www. usa-sentinel .com
  • www. us-news-magazine .net
  • www. usadailyjobnews .com
  • www. usconsumerdigest .com
  • www. usdreamjobs .com
  • www. usfinancejournal .com
  • www. usafinancialreporting .com
  • www. usnews8 .com
  • www. wallstreetgazettenews .com
  • www. wallstreetnews9 .com
  • www. wallstreetnews9 .tv
  • www. washington-tribune-news .com
  • www. washingtonnewsdaily .com
  • www. washingtonpostdaily .com
  • www. web-newsdaily .com
  • www. webnewsdaily .org
  • www. weekly-news .org
  • www. weeklyconsumernewsletter .com
  • www. weeklynewsonline .com
  • www. workathomecareernews .com
  • www. workathomecareertrends .com
  • www. workathomejobnews .org
  • www. workathomejobnews6 .com
  • www. workathomeobserver .com
  • www. workathomereviewnews .com
  • www. workathomethemagazine .com
  • www. workfromhomenews6 .com
  • www. workfromhomenews9 .com
  • www. world13news .com
  • www. world3news .com
  • www. worldwidenewspost .biz
  • www. ws7news .com
  • www. ws8today .com

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Recent news of interest

There's been so much interesting news lately that it's hard to keep up with it all.

These are the stories I've personally found most interesting:

7/28/2010 – from WIRED:

Google, CIA Invest in "Future" of Web Monitoring

"The investment arms of the CIA and Google are both backing a company that monitors the web in real time — and says it uses that information to predict the future.

The company is called Recorded Future, and it scours tens of thousands of websites, blogs and Twitter accounts to find the relationships between people, organizations, actions and incidents — both present and still-to-come. In a white paper, the company says its temporal analytics engine “goes beyond search” by “looking at the ‘invisible links’ between documents that talk about the same, or related, entities and events.”

7/29/2010 – from ReveNews:

Affiliate's Indicted for Cookie Stuffing

"The defendants in the following cases are considered innocent until proven guilty in a court of law.

Criminal Charges Filed

On June 24, 2010, two separate indictments were handed down by a grand jury in California against Shawn Hogan (pdf) and Brian Dunning (pdf) following an FBI investigation by the Cyber Crimes Department. The indictments charge Hogan and Dunning with wire fraud and criminal forfeiture. Hogan was charged with ten counts of wire fraud and Dunning with five counts of wire fraud."

7/29/2010 – from Citizen's Media Law Project

"FTC Seeks to Clarify — and Justify — Its Blogger Endorsement Guidelines

The Federal Trade Commission recently issued a factsheet in response to questions it received about its revised guidelines requiring disclosure of compensated endorsements."

Read the full story…

8/4/2010 – from Bizop.ca

"Montana Securities Claims ACN is a Pyramid

Montana Securities Commissioner Lindeen takes action against ACN, Inc for alleged pyramid scheme

Montana Commissioner of Securities and Insurance Monica J. Lindeen announced the issuance of a Cease and Desist Order and Notice of Proposed Agency Action against ACN, Inc. for allegedly operating a "pyramid scheme."

Read the full story…

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