FTC Takes Aim at 'Fake News' Websites
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From snake oil to sea monkeys, selling fraudulent -- or at least disappointing -- goods can return a quick buck, but the risks are often high.
The Federal Trade Commission recently asked the federal courts to put a temporary halt to the tactics of 10 companies using what appeared to be bona fide “news sites” to market acai-berry products as a weight-loss management tool. The FTC wants the courts to put an end to such deceptive practices and freeze the assets of these website owners until a court decision can be rendered. In each case, the website owner agreed to the terms of a preliminary injunction and either shuttered the site themselves or disclosed that the site in question is not an objective news organization.
Although most of the sites have since been shut down, the FTC has promised to go after copycats and other fraudsters. But even if you're not selling a product that boasts fake medical claims, the federal complaint should, at the very least, warn entrepreneurs and start-ups away contemplating such deceptive measures in order to make a buck.
Here are four ne'er-do-well tactics to steer clear of when selling products online:
- Making false claims: The websites currently targeted by the FTC are designed to appear as legitimate news organizations — some even displaying the names and logos of ABC, CBS, Fox News, CNN, USA Today and Consumer Reports. They feature bold headlines that proclaim the wonderfulness of acai berry diets, and they include first-person articles from purported “investigative journalists” who tout the double-digit poundage they’ve shed as a result of this tiny berry product.
- Over embellishing: The FTC claims the testimonials, the correspondents, the inflated weight-loss figures, the bogus logos, and just everything about these websites is a fabrication aimed at creating trust where none should ever exist. In fact, the agency asserts in its complaint that the sites are simply deceptive ads aimed at luring customers into purchasing acai-berry products from other merchants.
- Accepting kickbacks: In many cases, the website operators receive commissions from sales to unwitting consumers who buy berry products or sign up for free trials on the merchants’ sites. These bogus websites also neglect to disclose to potential buyers that they have financial ties to the merchants selling the berry product, a practice the FTC ruled against in October of 2009.
- Flouting the law: The FTC is taking these alleged violations of its Guides Concerning the Use of Endorsements and Testimonials in Advertising seriously. In addition to permanently barring such deceptive actions, the FTC is asking six different federal courts to require such 'fake news'-website operators to provide refunds to consumers who have been duped by the deceptive advertising and purchased the bogus weight-loss products.
In addition to these tips, what advice would you add? Let us know in the comments section.