Clickbank released some new rules recently for vendors (and affiliates) to be more in line with FTC requirements. They’ve made minor changes to their rules before, with minor effects, but these may be more serious. Whether you’re a vendor on Clickbank, an affiliate with them or you just want to see an example of how careful one should be in promoting products, you should check out their new rules. These apply especially to those promoting products about making money online, but it matters in other niches too, especially in areas such as health. While the guidelines page title says vendor, it’s important to note that affiliates are expected to follow these rules as well:

Screenshot from the Clickbank site:

Here are some of the big points:

• Specific advertising claims must be from real examples and actual experiences, and must be something you can substantiate. No making up stories.
• You can’t infer that the product is significantly easier to use than it really is.
• Affiliates are not to pose as neutral third parties comparing products just to make a commission when one is sold.
• Vendors must include a script to all sales videos for Clickbank to consider during the approval process.
• No false scarcity. If you say there are only 300 copies available, Clickbank will monitor sales and halt them at that number.
• No more claiming a sale price if you haven’t sold the product at that price before.
• No more than 3 upsells and two exit offers in the sales flow, with clear “no thanks” links.
• No corporate logos on sales pages without documented permission to use said logos.
• Prices, including rebill prices, must be clearly presented.

All in all, it’s what I would call pretty good stuff. Current vendors have until August 31, 2011 to get in line with these new terms. I think the start of September may be very interesting. If Clickbank enforces these strictly, I think there will be a lot of devastated vendors and affiliates scrambling to cope as noncompliant products get taken down. Just now, when you go through the e-marketing and e-business section, most of the top products don’t look particularly compliant.

Enforcement is going to be interesting. The basic way Clickbank has handled things in the past, you set up your sales page and send them your product for review, they check it and if it all looks good, you’re in the marketplace. The only problem is that it’s very easy to change both the page and the product after approval.

Policing sites for such changes would be difficult, but certainly not impossible. Makes things more expensive for Clickbank, I would imagine.

The other option is to rely on complaints, which I suspect won’t be good enough for the FTC. That there’s a chronic problem with exaggerated claims and full on false statements in the make money online industry is well known.

I’ve seen some people bemoan the loss of the “wild west” atmosphere of online marketing. Some feel that the right to free speech includes the right to claim whatever you want when you sell something.

That hasn’t been true for a long time. The only reason people are so used to it on the internet is because the internet is so much harder to regulate. That doesn’t make it right when people tell desperate buyers that they can make thousands of dollars in just a few mouse clicks. Being able to back up the claims you make about your product has been the law for a very long time.

Honestly, I don’t expect these changes to make a big difference. I’d like them to, but there are more payment processors out there, and plenty are willing to take on products places such as Clickbank may not want anymore.

This is, naturally, all about protecting Clickbank as a business. They want to have something they can point to saying that a vendor not obeying FTC rules was breaking their Terms of Service. I don’t know if that will be enough, but with the FTC stepping up enforcement and credit card companies looking harder at who they’re allowing to process payments, Clickbank has to do something to protect themselves. I don’t think it will remove their liability, but it might help.

I have no doubt in my mind that the vendors used to making big money off heavily hyped products and misleading claims know how they’re going to handle these changes. I expect a change in tactics, not so much a change in their business as a whole. I firmly believe that “buyer beware” will continue to be a good thought to keep in mind when you seek out ways to earn money from home.

Of course, if this works out, it would be wonderful. No more “As Seen On” lists of logos that really mean the product has been advertised on sites such as Google. No more products claiming to have just 9 more copies left for months on end while claiming tremendous popularity. Maybe even more products in the Clickbank Marketplace that I can feel good about promoting. I won’t even touch most of them because I loathe the typical sales letter so.

I’m also wanting to know how this will be enforced on affiliates. Vendors aren’t the only ones who make these wild claims, and by current FTC rules, vendors are responsible for what affiliates do too. Could get interesting, especially since Clickbank vendors don’t have direct contact with affiliates unless they get the affiliates to sign up with them directly. It’s rather difficult to be responsible for affiliates when you don’t know who they are or what they’re doing. Could this start a wave of Clickbank bans of affiliates?

There has been a lot of chatter online about changes Clickbank is about to make for vendors. These changes sound really good to me, as many will impact the business opportunity offers that make outrageous claims.

Here’s a quick rundown of the changes. If you want to see the whole thing, it’s on this thread at Warrior Forum.

1. Don’t make major pitch page changes after product approval. Changes should be sent to Account Manager for approval.

2. Internet Marketing products need to follow FTC rules, such as not giving the impression that you can earn easy money with little work or imply earnings are guaranteed.

3. False scarcity is discouraged.

4. Sales pages that include Clickbank stats must be verified by Clickbank and have been earned by the method being promoted.

5. Videos that include a Buy Now link must also display the price of the product.

6. Products must be usable on their own. They cannot require an upsell to function. Customers must be able to download the product before dealing with upsell offers.

There’s a bit more, but those are the big ones, and very welcome in my opinion. Too many Clickbank products in the internet marketing niche go way beyond what I understand to be acceptable according to the FTC.

The big question is how well they will implement and enforce these changes. They’re pretty huge, considering how many products sold there are what I would call highly questionable. While I very rarely buy products, I hate seeing how many launches don’t make it clear what it is you’ll be doing and just say you’ll earn big money with no effort. Gives the entire industry a bad name. Some people do earn big money online, but it takes time and a whole lot of effort.

It’s not clear if this will also impact previously approved products or if this is just going forward. I’d like to see a lot of current products cleaned up.

Of course, Clickbank has made changes to the rules before to comply with the FTC, but that hasn’t stopped the problem, because either the rules weren’t strict enough or they weren’t enforced properly. We’ll see how things go this time.

They’ve been promising for a while that they’d be looking harder at online activities, and now the FTC has taken action against a number of scams as a part of “Operation Empty Promises.” These scams were damaging to a number of people who were trying to find work in this challenging economy.

To be specific, they’ve taken 90 actions against companies that falsely promised employment or successful businesses to job seekers. It’s good to see these things go down, as while I’d love for everyone to be able to spot a scam without help, desperate people don’t always think so clearly, and get taken for large amounts of money.

I do mean large. The article notes that with the scam through Ivy Capital, some people paid up to $20,000 for coaching that was supposed to help them start a business. I can scarcely imagine the pain of being desperate for an income and losing that much money. A part of the claim is that coaches weren’t competent, and other offerings were not as they seemed.

They started by getting victims contact information when they responded to work at home ads and online business opportunities. The ads were for companies such as Jennifer Johnson’s Home Job Placement Program and Brent Austin’s Automated Wealth System.

People responded to these ads, and received telemarketing calls that would do a hard sell on them to get them to sign up for services that they said would gain them a lot of money with little effort. You may know my opinion of such things, but if you don’t I think it’s ridiculous. Very few people make any sort of a living based on a few hours of work a week, never mind thousands of dollars.

Fake Sales Jobs

Another company, National Sales Group, is accused of making false claims about available sales jobs, claiming to recruit for Fortune 1000 companies, then charging excessive fees for background checks and adding in recurring fees without informing their victims. I suppose while you’re stealing someone’s money you aren’t going to be too anxious to let them know about it.

These first companies are just in the process of being taken down by the FTC, and there has not yet been an official ruling on them. Nevertheless, they have been court ordered to cease their practices and have had assets frozen.

Other Scams Shut Down

The FTC had a few victories in court cases against some other scams as well. A couple of these are practically classic examples of work at home scams. There was a home crafting scam, an envelope stuffing scam, and some job board scams. Good to see these gone.

How Do You Look Into Opportunities?

Whether you’re looking at a work at home job or a home business opportunity, you need to do your research before you pay anything or give them much information about yourself.

The first thing you need to be aware of is any expenses associated with the opportunity you’re considering. This should be easy to discover. If the offer is vague, that’s not a good sign of a legitimate opportunity. You should know what your upfront expenses are and if you’re likely to continue to have expenses.

If you’re talking about a job, there shouldn’t be any upfront expenses, aside from occasionally a very reasonable cost for a background check. Many employers do not charge applicants for the background check, so be a bit extra wary if they want you to pay for it.

Paying for access to job listings can be legitimate, but only occasionally is. If they’re claiming that you absolutely, positively will get a fantastic, high paying job, step back. They’re probably not honest about what you’ll get. No job board or other job resource can promise you that. It’s up to the employer.

You should also consider how fast they say you’re going to be successful. Scams always make it sound easy to succeed, but the reality of any business is that it takes a lot of work to earn a living. Starting a business online does not mean you’re going to earn massive sums of money. If it were that simple I wouldn’t have to write these kinds of warnings. We’d all be on a nice island vacation or something.

Business opportunities are supposed to disclose what the average results are with their program, not just what their top performers do. Scams usually don’t.

I have to admit, that one is a bit tricky. Given how many people want to start a home business, and buy information to help them do it but never take action, the average almost has to be close to zero. Even of those who take action, I don’t believe there’s any one program that will be right for every person who tries it.

You should also know exactly how you’ll be working on your business and earning money. Hands off is not realistic. A real business requires you to do something.

Even autoblogging, which many online marketers talk up as an easy form of business, takes work. You can’t just throw a bunch of articles on a site and make it work. You need to research to figure out how to get the best information to your site, and you have to build backlinks for it. Not my kind of business at all, as most are easily taken down by search engines for not providing useful information, but also not as easy as proponents claim.

The most important thing is to just be realistic about what you expect you can earn from home and what it will take to get there. It’s not all easy. There’s a lot of hard work involved, and if you think otherwise you’re setting yourself up to fall for someone else’s scam.

I have to admit, these new FTC guidelines for disclosure turned out to be a bit more of a headache for me than I planned for. Not because it’s so hard to decide what to say, but because my family was dealing with a stomach bug all weekend, the time that I had set aside to work on it.

Good thing I somehow stayed mostly healthy. But it still made getting work done rather more challenging than I had planned.

For now I’m keeping it simple. I fully expect things to get clearer as time goes on. For now I have it as:

If you purchase anything reviewed or recommended on this site, I probably earn a commission. Not always, but often enough you may as well assume I do.

When looking at home business opportunities, keep in mind that most businesses fail. That’s as true online as it is anywhere else. But if you don’t try you won’t succeed.

I have no idea if that’s enough. But it’s a start and true enough. No matter how well some people do with any one business model, your average person won’t. Matter of fact, even if you buy the ebook that tells exactly how someone made a ton of money you can’t say you’ll do the same. You can’t even say for sure that you’ll ever get around to reading it. An awful lot of people don’t even take that much action even when they say they want to earn money from home.

And of course I always want to earn a commission if I can on a product. I’d be crazy not to. The money’s right there. Or is it over there? Either way, it’s a bit of compensation for the work I do here. But when the product is good enough and relevant enough, money is not the sole consideration. Quality can overrule $$$, even when we’re talking about money in my pocket.

There are of course tons of blog posts out there you can read up on this for your own needs. New FTC Guidelines over at Matt’s Marketing Blog is a fair read. My understanding is that there will be warnings and a chance to make it right before there are any fines levied, but it’s always better to avoid the hassle in the first place.

The basic thing you need to remember is to keep it honest. You may or may not get caught, but with new rules in place you might just be hurting yourself if you ignore them.

Oh wait, it’s that the media can only see one side of it when they write articles about mom bloggers.

Amy Bellgardt of Mom Spark pointed this one out, and from what I’ve seen it certainly appears to be true. She was interviewed for an article that was supposed to be about the backlash on Twitter over an event at Nestle. That’s not how the article turned out, though. It focused far more on the swag, hotel rooms and meals the moms got at the event.

That seems to be pretty routine for traditional treatment of moms who blog. We’re the focus when they talk about the new FTC rules about disclosure. Never mind that when it comes down to it all blogs will have to consider the FTC rules when accepting any form of compensation for posting.

Apparently mom blogs are an easy target.

It’s hard to know just why this is. I think there’s an image of the bored stay at home mom posting excessively personal stuff about her family and selling out for whatever stuff comes their way. It’s not a particularly accurate image in my experience, but the image sticks.

Blogging is easy to start, it’s true, but success takes rather more. Selling out and being dishonest doesn’t get you all that far. That a successful business can be built from home so easily (relative to a brick and mortar business) should be a source of inspiration.