The US Electronic Retailing Self-Regulation Program (ERSP) launched an investigation into advertising by the Info Marketing Group and its selling of the ‘Mini Site Formula Affiliate Marketing Programme’, after becoming concerned about grand statements on its website.
Claims included: "I’ve made as much as…$253,741.99 in a single month", "Make thousands of dollars building mini websites", and "Made over $400,000 using the formula…"
The site explains how to ‘build an army of profitable mini-websites’, whereby hundreds of the small websites, making a small amount of money, equates to making a vast amount of cash around the clock.
FTC to Step in
ERSP, which was created by American business organisations to promote consumer confidence and is overseen by the Council of Better Business Bureaus, said after the Info Marketing Group failed to respond to its queries on the issues, it had no choice but to turn the case over to the FTC.
An ERSP spokesman said: “After failing to provide a substantive response to ERSP’s original inquiry within 15 calendar days, the marketer was afforded a second 10-day period in which to submit a substantive response. The marketer did not do so. Pursuant to ERSP policies and procedures, this matter has been referred to the FTC.”
Under FTC guidelines, consumer endorsements ‘may not contain any representations which would be deceptive, or could not be substantiated if made directly by the advertiser’, and must reflect what other consumers can generally expect to experience, ERSP noted.
At the end of March ERSP also recommended that lead-generation affiliate marketing business YES International, modify or discontinue certain claims following company testimonials such as: “I had over $10,000 in sales in December and should be about the same or perhaps higher in January so things are going really well. Monthly profit is coming in at about $6,000 currently.”
In the absence of evidence to support the testimonial claims, ERSP recommended the marketer discontinue the use of the testimonial earnings claims found on the Yes International home page.
The company agreed to make changes, provide an appropriate disclaimer on its website regarding the testimonials and to ensure testimonials are substantiated and do not ‘overstate results’.
ERSP cases originate from inquiries brought by competitors and consumers, as well as through ERSP's ongoing monitoring program.