The FTC just decided to kick a small USA based business woman’s ass because she was providing ordinary publicity work paid reviews for clients with wares to sell.

The defendant victim was using ordinary sales puffery. If you are unfamiliar with the term; it refers to a legal concept that salespeople may make positive statements about their products that are exaggerations of the truth. It’s inspired by the ancient belief in caveat emptor (let the buyer beware). Customers expect, and commerce requires salespeople to be able to puff up their own products. Outright lies of course shouldn’t be tolerated.

If the following statements were made in a commercial on TV, Radio, or printed media, they would have garnered no attention.  These are the statements made by the victim Tracie Snitker’s company Reverb Communications Inc.’s employees:

Although I am not an Amazon affiliate, my wife and mother-in-law both are. My mother-in-law especially has hundreds of blog posts and at least many dozens if not hundreds of Amazon links in place on her blogs.

Colorado affiliates including myself successfully lobbied to get affiliates removed from HB-1193. Lawmakers excluded affiliates from the bill and passed it. Amazon must have decided they didn’t like the bill and decided to fire all Colorado based affiliates.

The biggest crime here is that Amazon is leaving all links in place and accepting sales from these Colorado affiliates. So affiliates who have spent years building up businesses may have 1000′s of links in place over many websites through which customers are still flowing to Amazon. The only thing Amazon has changed is that they are no longer paying Colorado affiliates their hard earned money. I’m praying for a class action lawsuit. Anyone know a good lawyer?

Below the Fail-ometer is a copy of the letter my family members received yesterday:
“The Fail-ometer”

“Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill. [3 links removed]

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.
Best Regards,

The Amazon Associates Team”

Hey folks. We all know Dennis is a great guy who never hurt anybody. He never did anything wrong, broke any rules, or scammed anybody.

I’m taking up the cause to show him a little charity but I can’t do it without your help. I’m taking up a collection to get him a little present that should help him stick around in our industry. Just a little something that will make his life easier when he goes to industry events.

What is it?

Drum roll………

It’s…..

The Spit Sock Hood!

If you don’t know why Dennis Yu needs a spit sock hood, I present several reasons:
Here is the article Dennis wrote that started it all. Followed by responses from Shoemoney, ppc.bz, Uber, Nickycakes, John Chow, Trevor Nash-Keller, and more.

Now seriously folks. I’m worried about the guy. He’s gonna keep showing up and he’s gonna need lots of spit sock hoods.

Now they only cost $3.95 for one or $44.64 for 12 of them. Donate any amount you feel comfortable with and my hand to God, I’ll put your donations together and ship as many Spit Sock Hoods as we can afford straight to BlitzLocal’s offices located between the dumpster and recycling bin behind Chuck-E-Cheese in some bad neighborhood in Denver.

If this little fundraiser is successful, we may hold a follow-up fundraiser to get him some much needed supplies like this book:

Does anyone else have some nice gift suggestions?

There was a strong grassroots movement of affiliates opposing the Colorado affiliate tax. Many people wrote letters, made phone calls, and showed up to testify in person.

HB 1193 was modified on 02/08/10 eliminating affiliates from it’s terminology. Lawmakers succeeded in preserving 100′s of jobs that are pumping money into Colorado’s economy.

UPDATE: Well Amazon decided to fire affiliates anyway and keep their business at the same time.

There is a lot of buzz about Revolution202.  They are calling themselves a ‘Partner Network’ with good reason. Their mission is basically to provide value to affiliates and let their own profitability take care of itself. They like to think of themselves as your partner rather than your network. I know Wes and Roland personally and can vouch for their integrity.

I knew they were planning on eventually merging Tracking202 and Tracking202 Pro with a network, but had no idea it would be so soon.

I am a big supporter of everything 202. I use Prosper202 myself and I promise you it’s worth any learning curve involved in getting things set up right. They provide all sorts of features but my favorite two are:

1. I can see every search keyword which has ever converted for my offers.
2. I can see what times of day my conversions occur which assists me in adjusting my bids throughout the day.

If you don’t know how to host things on your own server and stuff like that, just use Tracking202 free or paid Tracking202Pro. Prosper202 was released as open source software to quell any concerns that the 202 guys might be interested in peaking at your data.

Some nervous types were concerned about it, so 202 put their money where their mouth was and gave it away for free. It worked. Prosper and Tracking202 are wildly popular among successful affiliates.  Their users are a virtual who’s who of affiliate marketing. Is’nt that a club you want to be part of?

What is your favorite feature in any of the 202 products?

Um, I guess that’s about it. Title covers it all. Unless you don’t know what that means…..

For me it means that aps like Tweetdeck and Seesmic will perform better. Things like Twitter Karma will perform much better. Twitter Karma will now be able to work for accounts up to 15000 followers instead of just 10000.

If you use the web interface only. It means nothing to you. Don’t worry about it.

I sat in on a session at Affiliate Convention with Stephen Richter discussing new aspects of compliance we’re all going to have to think about.

You’ve probably heard some talk about the FTC cracking down on bloggers. Well it doesn’t stop there. They are getting all geared up to outline new regulations by the end of the summer.

Here are the current regulations which are being applied to affiliates:
http://www.ftc.gov/os/2008/11/P034520endorsementguides.pdf

Who will be affected?

Bloggers who have affiliate links or take any form of compensation as payment for a blog post including free samples to be reviewed.

Floggers (fake bloggers) are doomed.

Almost all affiliate marketers of any sort are going to be impacted.

You think you’re compliant but your not:

You’ve got some fine print tucked away somewhere in a privacy policy, or terms of service, or even a ‘disclosure’ page. Right?

Well that’s not gonna cut the mustard buddy. The FTC is looking at the ‘whole picture’ of a website including. Ads, landing pages, testimonials, etc. If one word on your website is a lie, you are not fully compliant with the intent of the law.

In addition to that, if you are reviewing or even (god forbid) giving a genuine and honest review of a product, you have to disclose the fact that you are being or will be compensated.  We are talking about sweeping changes to the way online marketing is allowed to continue.

Disclaimer: I am hoping that you will read my article and then sign up through referral links to affiliate networks or hosting providers. All the ads you see and practically any link you see on this site is fully intended to make me rich. Maybe you should just give me half the money in your wallet right now and we’ll call it even.

On a final note, it’s a good idea to think about getting an LLC. And if you’re doing some serious business, or doing some seriously risky business, maybe you should be setting up offshore entities to make coming after you more difficult.

In addition, you might want to talk to a few lawyers about setting up your business structures in a way that will really protect your personal wealth.
Lastly, please note that I’m not an attorney and following any advice I give you may result in dire consequences up to and including loss of limb, life, money, property, or your freedom.

Want more? Read a Washington Post article about it here.