Wow…A few months ago the FTC came out with a slew of new rules relating to blogging and marketing online, and now, just the other day a client sent me some new rules being laid down by Mastercard. Smack!

Now I get that these laws are meant to protect consumers from unwittingly being duped by fake reviews and bogus weight loss stories. Shameless opportunists are fucking things up for everyone.

Check these new rules sent over from Mastercard:

Billing Practices

1. Terms Disclosure

a. The terms of billing must be clearly disclosed on the website.

1. 1. • • The terms must be appended adjacent to the “call-to-action” or “submit” button confirming the order. This price must be within 100 pixels in numbers between the top and bottom edges of the “call-to-action” or “submit” order button
        • The terms must be in a minimum of 12-point easy to read font.
        • There must be no visually distracting graphics from the display of the terms.
   2. Verbiage must plainly state the enrollment into the membership without distraction.
      • • Acceptable disclosure: “By Clicking “Order” you agree to be enrolled in the _____ day trial for ______, and after the trial expires, you agree that your card will be charged $____ per month until you cancel.”
        • Pre-checked boxes as terms and conditions must never be used. The consumer cannot proceed with order without checking this box.
   3. The price point for the product(s) sold must be within reasonable “fair market value.”
   4. Any trial period must be a minimum of 10 days.
   5. Billing cycles must not bill the customer the “core” price point twice in a 30-day span.
      • • Example of an acceptable billing cycle. Day-1 Customer signs up for a 14-day trial and is charged the initial S&H. Day -15 customer is billed for the initial trial shipment. Day-45 customer is billed for the second month shipment of the product.
   6. False guarantees about full money back or full satisfaction are prohibited unless the offer provides a full refund on all merchandise, including but not limited to shipping and handling.
   7. Double Validation – The consumer must accept terms & conditions with pricing twice during order submission. For example, once on the initial landing page and again when checking out and submitting their credit card information. Additionally, the confirmation order page must also disclose that they have agreed to these Terms & Conditions and authorized the charge on their credit card.
2. Up sell Policies:
   1. Up-sells or Cross-sells are prohibited

Advertising Practices

1. Marketing
   1. Marketing of a product as “Free”, “Risk-Free” or stating that the product(s) marketed doesn’t cost anything is prohibited if customers will be paying at the end of a trial for the product or entered into a membership program that has recurring billing.
   2. Images of celebrities are prohibited from use without express legal written consent of the entity being published.
   3. By law, product claims must be truthful and not misleading. Claims made must substantiated by the formulas used in the product(s) marketed and the clinical research conducted to support it.
      • • Claims prohibited from use include: “Flushes Pounds”, “Flushes Toxins”, “Builds Muscle”
        • Additional examples of phrases prohibited from use include:
          • Stating a product will cause permanent weight loss.
          • Stating a product will cause substantial weight loss no matter what or how much the consumer eats.
          • Stating a product will make you lose a specific amount of weight in a specific amount of time.
          • Causes weight loss or muscle growth in specific body parts.
          • Can substitute a full income job.
          • Can earn you money with little to no effort at all.
          • Can earn you a specified amount of money in a specified amount of time.
          • Will instantly earn money with no investment or effort.
          • Will give you access to “free money.”
          • Is endorsed or at all associated with Obama or the government.
          • Will secure a job for you at another company or at the product’s company.
          • Has been successfully used by an unrealistic amount of people.
          • Stating a product will earn you hundreds of thousands or millions of dollars.
          • Stating a product will instantly earn you money with no effort or investment.

· Blogs used, as a promotion means must be honest and accurate of the endorsee in compliance with FTC guidelines. Otherwise, clearly and conspicuously shown as an advertisement or that the story is fictional in the event the blog is fake.

· News Sites used as a promotion means must follow FTC guidelines and clearly and conspicuously alert the consumer that it is an advertorial.

· The use of a false sense of urgency is prohibited unless the customer’s ability to order is genuinely taken away.

· Countdown clocks and tickers or offer expires today is prohibited.

· Qualifications for trials should follow pre-determined rules that disqualify customers who don’t meet such parameters including but not limited to: Age, Weight, Height, and Location.

1. Endorsements/Testimonials
   1. Any endorsement/testimonials relaying the experience of a user must reflect the true and honest opinions of the endorsee.
   2. Endorsements/testimonials provided must provide a clear picture of what users of the product will generally achieve, if the advertiser does not have substantiation for that claim, then the advertiser must clearly disclose what the generally expected results would be, and have substantiation for those claims.

Customer Support Practices

1. Customer Support
   1. Merchants must provide customers with multiple outlets for cancellation.
      • • Phone
        • Email
        • Mail
   2. Customer support must operate within reasonable hours in the region the product was sold.
   3. Customer support must have hold times less than 120 seconds.
   4. After hour voice greetings should be recognizable by the consumer.
   5. Customer support should be easily accessible.
   6. Customer support must follow the Refund/Cancelation Policy as disclosed on the website.

Fulfillment Practices

1. Fulfillment Services

1. Products ordered must be executed for fulfillment in a timely manner. As a general rule, product must be shipped within 48 hrs (business days) from the date ordered.
2. A customer service number must be clearly included in the invoice sheet or confirmation email.
3. Cancelation/refund policy must be included with product on shipment.
4. Delivery confirmation with tracking is recommended.
5. Merchants should strive to provide a product that provides tremendous value perception to the consumer.

These remind me of back when I used to work with car dealers doing auto ads. Every week it was the same story. Rush to get the ads approved by deadline. Part of the reason was everything had to go through co-op. Co-op’s job was to nit-pick the hell out of every ad and make sure it met every rule the auto manufacturers attorneys had penned for their marketing.

The cost of getting dinged on a co-op ad - as much as $30K.  On the other hand however if the advertiser passed co-op every time the manufacturer would also supplement some of the dealer’s advertising costs.

Internet direct marketers just get the dinged part of the deal.  Likely nobody is going to supplement our advertising costs for following the above rules.

I understand how this all came about. And, I believe that people should strive to create products that add real value to people’s lives. Still, the buyer must assume some responsibility for his or her actions.

I have witnessed that even when all or nearly all of the requirements above are made people will still chargeback and try and push the responsibility back onto the merchant.

This is an interesting debate. I mean shouldn’t buyers be accountable for their actions too?

As advertisers and marketers, words are all we really have. Markets are crowded and competitive and as little guys direct marketers and solopreneurs need to make their words count. Sometimes that means speaking to peoples hopes, fears, dreams etc…

On one level I very much understand all the heightened regulation on the other it upsets me that consumers blame merchants for their behavior.

Who’s trying to get over on who? Is it possible that most people who signup for free trials do so never intending to purchase the product to begin with? They’re trying to get something for nothing.

A lot of direct response capitalizes on  “magic bullet,” solutions at least as far as the copy goes. That’s because people are looking to make tons of money or lose weight etc… without any work.

The same thing happens in mainstream big box marketing too. A mop does a fine job of cleaning floors. But when you see that Swifter gliding across your floor it makes cleaning look so effortless.

What do you think about these regulations? There is really a lot of food thought here.

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