$1.1 Billion Dollar Judgments Against YOU for Being Part of Latest Online Scams
- 30 Comments
- By Zac Johnson on September 16th, 2009
You may have been reading how the Attorney Generals of most states, as well as the FTC are bringing down folks peddling Acai, Google Cash, IQ Quiz, Cash for Clunkers, and other scams. Sanford Wallace was nailed for judgments of $873 million and $234 million for spamming Facebook and MySpace– that’s over a billion dollars against just one guy. I recently sat down with Steve Richter, who is President of affiliate.com, as well as the sharpest lawyer in Internet marketing, to get his thoughts.
- You’re not safe because you’re just an affiliate: They’re going after anyone involved– any affiliates, advertisers, networks, carriers, and whoever. Some folks, who I won’t out here, are doing blatantly illegal things that will certainly land them behind bars. These folks may “think” that they’re making money, but probably aren’t factoring in the cost of getting caught. They’re too smart, they think– even boasting about it on Facebook, which just creates more evidence for the authorities.
- If anything you claim is false, you’re guilty: Don’t create flogs that claim 3 months of improbably weight loss, if the program has been around for only a week. The authorities will ask you for proof of these claims– and if you can’t produce them, they got you. Consider the Top 10 Online Scams from the FTC. And consider how Facebook shut down two social ad networks for passing through user information to their landing pages.
- Your pages must have a privacy policy and terms of service: If you infringe on someone else’s trademarks, and DON’T have the legalese, they can come after you immediately. But if you do have it there, then you legally get one chance to change the page. That’s called “one bite at the apple”– so you should definitely take advantage of this legal protection.
- There’s tons of legit ways to make money: Have you tried ringtones via ringnrock.com, online dating reviews, or even blogging about your favorite hobbies? Sure, you won’t make as much in one shot, but in the long run will be more successful. Most of the scammers may have one day they do $10k, $50k, or even $100k– but they’re one hit wonders. Incidentally, Scott Richter told me this afternoon that if someone boasts about how much they do in one day, it’s a sure sign that they had just one good day and are likely broke.
You can still promote many of the biz opp, mobile, and weight loss offers– just don’t say anything untrue.
It’s quite easy to think that you can’t get caught because you’ve been doing it a while and haven’t been caught yet, are under 18, or know many others that are doing it. Watch out for a ton of people going to jail for a long time.
As Steve Richter told me– it’s not whether they catch you, it’s when.
This guest post was written by Dennis Yu of BlitzLocal, a marketing company which focuses on local advertising. Dennis Yu was also the moderator at Affiliate Summit East 09 on the Facebook Advertising panel.
- Posted in Affiliate Marketing, Marketing
"With great power comes great responsibility".... my Uncle Ben told me that. Haha, just kidding! I'm Zac Johnson and I've been making money online for over 10 years now. In short, I started making money online while I was in high school... but my passion for marketing and making money goes back way earlier than that. I created ZacJohnson.com to help motivate you to start making money online, and live the life the you always dreamed of.
Wow. Billion with a “B” ?!? It still amazes me how many people think they are safe because they were just an “affiliate” of these scams. These guys just don’t get it. Long term success is built on developing the relationship with the buyer. Going after the fast dollar never lasts, and in many cases like this, will get you in some hot water.
Replyfinally someone step in to block those scams…. true competition with legit product can happen now. Most important those fake super affiliate one hit wonder .. will stop bragging to sell BS everywhere !!!!! what’s your point view on all this.. did you promote those offers?
ReplyThe line is too foggy. I promote what the advertisers tell me that their product does. I write about the products, bs about them, and make up persuasive scenarios about the products. I don’t blatantly lie about the offers, but what if I said “BUY 1 GET 1 FREE” because that’s what the banner told me and it turns out to be false? My bad? Do I go to jail?
Kind of scares the hell out of me, even though I realllly don’t feel like I’m doing anything bad, or even borderline bad. I just have a blog (not a flog) about legit products, and I write about them. Tired of this legal crap.
ReplyI’m sticking to physical products from now on I think… I promoted teeth whitening earlier this year and never had a good conscious while doing so..
Reply…P.S. and it’s not like I’m going to buy every single product that I promote just to verify the legality of what the advertiser is doing. Feel me? Somebody’s got to give the affiliates a break somewhere in all of this. I don’t think it’s right to point all the fingers at the affiliates.
Reply@profwebs:
Wait a minute, how is teeth whitening not a physical product?
ReplyAmen. It is not worth the risk.
ReplyIts also common sense to sit down and think – would I promote this product – or would I promote in this way – to my own mother, father, friend? If not, go find something else to run. It is not worth it. It’s not ethical.
I am trying to help change that in the Acai space. I have a real product without the scam. Some understand what I am doing – others can”t stand the thought of potential lost money – in the end they will be the ones who lose. I was told recently that the scam acai offers only last 1.5 months per subscription – thus the reason they immediately send out several months worth of product.
finally i found what make my inbox full with spam… damn it.. is there anything we can do for prevent this
ReplyQuite scary. I didn’t know this kind of law enforcement was happening. I guess it’s a good thing all the network do not allow auto rebill scams anymore.
ReplyWell it does make you feel lucky to win a lottery ticket or have an funds transfer offer every now and then.
ReplyI want to know this is true, hope it will be helpful to us
ReplyI write about internet scams occasionally: http://www.money-era.com/category/scams/
ReplyWise words.. for a scary future. Not sure how far they will go in the end, but picking a hobby or thing you believe in vs. the ‘hot scam’ is the way to go for sure.
Nice post!
ReplyGet em boys! Knock em dead! Lol just kidding. I feel sorry for none of these people. They knew darn well when they started pushing flogs what they were doing.
ReplyI for one am quite happy that shady operators are held accountable. Fraud is fraud, and making money by ripping people off is just totally unacceptable. If Sanford Wallace got fined over a $Billion, how much money did he actually make before running into trouble with the law?
ReplyI for one will certainly be interested to hear some of the end results for this after all the penalties and jail time have been assessed to the individuals. I would certainly like to hear more case by case of what will happen to certain individual, what were they doing wrong, and what was the penalty they received as a result.
Till then,
Jean
ReplyThanks for sharing your information. I am reading your blog everytime my feedreader give me new posts
regards,
ReplyVolkspone
The headline of this article is EXTREMELY misleading.
Sanford Wallace was doing much more than promoting shady offers in a way that could be viewed as “unethical”.
Do your research.
ReplyI think email scam can happen to everyone, especially for internet newbie…
ReplyI think what is really amazing is that this post was written by Dennis Yu of Blitz Local, whose company website, up until a few weeks age, used to blatantly lie on its homepage with an image of an accountant saying “Jim’s accounting practice , 569 leads last month for his Accounting Firm in XXXXXX.” where XXXXX would dynamically insert the city of the viewer based off their IP Address.
Apparently Blitz Local has worked with a Jim the Accountant in every city and helped the get the exact same amount of leads, or thats what they want you to think. Maybe Dennis Yu saw the light cause he changed his site and wrote this article!
ReplyHey Zac,
Scams are everywhere online, many people who want to earn some easy money online and with the lack of proper know-how of the affiliate marketing they just want to sell the product to the buyers… it can be either by making false claims.
I am sure that your post might have enlightened some of the novice affiliate marketers and they will be cautious about this in the future, because no one wants to be Sanford Wallace.
ReplyGreat Post! Thank you for bringing some light to those Google Cash offers. We’ve been running COMPLETELY compliant Business Opportunity offers for months and months since this new FTC thing. It’s nice to see a big player in the Affiliate world bringing the negative out of these offers. These guys are ruining the industry and all of these offers should be canned!
ReplyGood reading, as always. I do wonder how so many of these forex sales pages can still be online….
ReplyWhile Sanford Wallace won’t ever be able to actually pay the billion dollar fines, the FTC legal wins at least send a strong message that anyone part of the chain can be prosecuted– even and especially affiliates.
ReplyWe should be aware for this kind of scams… some of the affiliate programs are running so closed to this kind of issue.
ReplyGreat Post. I have seen the effects of people getting knee deep in this kind of marketing and having the FTC shut everything down. The days of affiliates selling “snake oil” to the general public is close to the end. The government has been doing everything they can to get rid of it and its working. If you do market these kinds of products I can guarantee… you are not safe wherever you are.
ReplyZac,
The $873 million judgment was not against Sanford Wallace. It was against Adam Guerbuez, the Canadian who spammed Facebook.
ReplyIt would be nice to think that this type of deceptive marketing will just “go away” after the FTC crackdowns, but that’s probably not the case.
In fact there are flogs and fake news sites that have become much MORE popular after the FTC Operation Short Change press release.
For example, this site:
http://siteanalytics.Compete.com/internet-news-daily.com/
you can see taking off right AFTER the 7/3/2009 FTC press release.
The other problem is that it’s still quite easy to anonymously incorporate and open anonymous bank accounts tied to those corporations – especially in the U.S. and the U.K. as a recent study by Jason Sharman revealed:
http://www.economist.com/businessfinance/displayStory.cfm?story_id=13382279
If you’ve ever wondered why you see such a proliferation of UK companies tied to hidden negative option offers – that’s probably why.
The bigger affiliate networks do seem to be less willing to run the hidden negative option offers, but my guess is that private affiliate networks specializing in these types of offers will just take over that role.
Replygood article as always,although infuriating to read [again] about what they were doing
ReplyAre you kidding me? This article is pile of shit. You wrote it like the guy was selling some affiliate products and made a lie here and there. Just google it and read the whole story.
This blog is junk.
Reply