FTC Contacts More CPA Affiliate Networks about Possible Actions
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FTC Contacts More CPA Affiliate Networks about Possible Actions

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Performance Marketing Insider has learned that the FTC has alerted at least half-a-dozen networks that they are in the target for possible enforcement actions. These networks have received what are called “civil investigative demands” which have asked networks to provide information about their practices and specific affiliates they are doing business with.

According to insiders, the CIDs have been mainly sent to affiliate networks that were involved with Acai and Flog sites, and are mainly being used compile a list of possible companies to go after.  It seems also that attorneys for the FTC have already made it clear with some of the networks, that they can chose to settle and sign an agreement immediately – or will face actions in the future.

With enforcement actions being very expensive and even leading to putting companies out of business, these actions are concerns to both the networks and the affiliates. Super-Affiliates including Tanner Vaughn and Ricardo Jose Labra  faced actions and had their assets taken, when the FTC learned about their actions from CPA Networks in previous CID’s.  One can assume that more affiliates will face possible actions for promoting offers in a deceptive manner, including using flogs.

Written by Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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57 Comments

  • Tricia Meyer says:

    Very interesting! This shake-up is going to turn out to be huge!! Of course, most scammers will just figure out something else to move onto next. But it at least sends a message to our industry that affiliate marketing is on the government’s radar in a big way.
    Tricia Meyer recently posted..FTC and Affiliate Network LiabilityMy Profile

  • chad says:

    When you say flog what exactly do you mean like fake news and review sites? & do you know which networks are included?

  • Someone says:

    Word is Clickbooth CX Azoogle ads4dough c2m eagle all got these letters big shit about to go down

  • EWA Affiliate says:

    EWA is has been served by the FTC. They are going down in the next round of FTC lawsuits. Eagle is dead.

  • Tim says:

    Folks, let’s stop pretending the elephant is not in the room. Many of these networks would not exist if it was not for fraudulent advertising and fraudulent products. Do you buy and use any of these products? Do you know anyone who really gets results from any of them? Whether it’s get rich quick deals or pills, this industry mostly preys on the vulnerable. Oh, I know, there are real products being sold. Sure, but where is the real revenue? People rationalize all the time that this is legitimate business. It’s just like many MLMs. Yes, there are some real products and there are some legitimate affiliates, but who is really making the money here? Try advertising legitimate products with honest advertising…..ok, that’s too hard and won’t make you rich overnight. Advice to many in this industry: TIME TO GET A JOB. McDonalds is hiring.

  • I watch affiliate ads and media. You can gain fantastic insights about what is working.

    Last time I checked MSN and similar high volume sites… I still see the classic FLOGS in use.

    Seriously… how long has it been since the first warnings were released anyway. Just goes to show you that not everyone cares what the FTC has to say.

    My guess is many of them are outside the US. Only thing that makes sense.
    Robert Stanley recently posted..Blackouts, Fear and BusinessMy Profile

  • Michael says:

    Very big stuff? Give me a break! The FTC and other regulatory agencies want press releases and settlements. They don’t want to litigate anything. These networks will pay their 6-7 figure settlements and move on.

    Sorry to spoil everyone’s fun.

    I know the speculation of drama makes for such a better story, so let me indulge all the blood thirsty gawkers.

    Here is what I think will happen: These 100+ Million Dollar companies, mentioned above, employing hundreds of employees across the country (and Canada), will be raided by the FTC with automatic weapons with a specific order to shoot to kill if anyone gives the agents a dirty look. The rest will be carried out in handcuffs and sent to Guantanamo Bay with no trial in site. Now don’t you wish you policed the hundreds of thousands of publishers on your network and made sure each was 100% compliant.

    Soon thereafter no one will be allowed to access the internet without a note from their mother, doctor, priest or rabbi. Shit is about to get real!!!!

  • observer says:

    why was the clickbooth post comments closed? C and D?

  • Tim says:

    Most of us don’t like the federal government getting involved. Yes, they have their own agenda. They engage in their own pyramid and other fraudulent schemes. There is a 500 million dollar gov lottery ticket scheme going on right now. A tax on the stupid. Unfortunately, the crooks usually get so darn greedy they can’t stop until the feds get involved. That’s why they are criminals. What should happen is everyone engaging in this fraud should lose every nickel they have ever made plus pay a huge punitive charge. Civil suits. That would be justice. This includes all the guys working out of their bedrooms. Usually, the big guys just have to pay a penalty and they keep a large part of their ill gotten gains (probably in foreign accounts). The victims are stuck with their worthless bottles of crap and massive credit card charges. The affiliates move onto the next get rich quick scheme. Just because someone is too much of a coward to steal from his victims face to face and he steals using bits and bytes, does that make it ok? If the inner city kid steals your radio, you want the cops to throw him in jail. But sit behind your computer and talk techno talk and you think it is a legitimate business? Enron had thousands of employees walking around in office buildings with suits on. You are savvy and your customers are stupid fools who deserve to be fleeced? Is that the attitude? Some should face criminal charges. To many affiliates in this industry: Don’t fool yourself. – Look in the mirror – be honest. You know what you are doing is wrong. Stop pretending just because you can get away with it or because “everyone else is doing it.” it’s ok. It’s easy to start buying into this when you see others making money and getting away with it. And oh boy, when you start making money!!! It’s human nature. Entire nations have bought into this….

    • Michael Jacobson says:

      Very well said! Nice to hear some *bigger picture* thinking coming from someone in this industry now and then.. Cheers–

    • “… But sit behind your computer and talk techno talk and you think it is a legitimate business?” That made me laugh. What is a ‘legitimate’ business? Maybe you are thinking of a non-profit or a charity.

      “Just because someone is too much of a coward to steal from his victims face to face…” more like too lazy to leave the house.

      If you think there is something called an honest dollar, I think you are naive. Capitalism necessitates exploitation. The FTC can not change that, even by making everyone a criminal. As we make more laws without removing the old, all actions will eventually become criminal. Case in point, a police officer can harass at anytime based on an obscure violation. The people who get harassed are often the people with the least resources to fight back.

      “Look in the mirror” you say, and I agree. What is legal is not always right and what is illegal is rarely as bad as it is made out to be. You can not buy an iPhone without having some exploited Chinese factory worker commit suicide. Look in the mirror. Filling up at that gas station, its no secret that people are getting killed over barrels of petrol. Honest, legitimate businesses no doubt.

      But there you are, hiding behind a can of air freshener like nothing happened. Yes, we all create a stink. Some people just can not smell their own, or refuse to acknowledge it. It seems you would lie to yourself and believe that it is all ‘mountain fresh’ when you leave the room. That is a level of dishonesty worse than any acai berry lander.

  • You’ll never get into trouble with the FTC running dating offers, all year long.

    Dating = big money, no trouble. Go figure!

  • Noname says:

    You see fake news ads, fake testimonials, rebills, free trials, advertorials all night long on the major networks on TV. Think they would touch those guys? Hell no CBS, ABC, FOX and all the others would NOT just bend over take it up the ass like our networks are. If you think about it, FTC is like the mafia, extorting money from networks that are willing to just pay up and shut up, instead of getting some balls and taking these fuckers on like they should be. Networks need to grow some balls and take on these federal bullies. They took down a few networks at first, got it the easy way, now they want more blood. Messed up if you think about it guys..

  • Ryan says:

    All we good guys are fine…. I’m glad the FTC will clear all those shit ballerz out of my teams way.

    We focus on legit subscriptions and offers.

    Glad to see the herd thinned (ass clown networks) and nickel & dime affiliates.

    Lets leave the industry where it belongs; in the hands of creative marketers who value long term and lucrative relationships.

  • Ryan Eagle says:

    ** removed by request **

  • Hardworker says:

    Case in poin being the fact that sites like manbc and other major “respectable” news sites are still serving biz op add through pulse360. And that is biz opp using farticles as seen on cnn google check fake comments no disclosure type of biz opp. But you don’t see the FTC cding msnbc or pulse360 eh? :/

    Also pace for the love of god make that stupid hover popin not appear on cellphones it’s so dumb or at least fix it. View your site in a iPhone you will see

  • John Hendricks says:

    It has been common knowledge that networks like EWA and BlamAds have been exploiting affiliate marketing, so it was only a matter of time before the FTC stepped in to take action.

    One of the many threads/complaints that kicked off the investigation into EWA were similar to this one
    http://800notes.com/Phone.aspx/1-877-825-1528

    If you type in “EWA Acai Scam” on Google, you’ll numerous results.

    It’s important that user’s know their rights and to report scams as they see them. As more and more user’s become aware of these types of scams, the more and more affiliate networks we’ll see reprehended by the FTC.

  • C Kavanagh says:

    Wow things are getting crazy with all of the lawsuits.

    So EWA has been served by the FTC??? What sucks is that networks dont want publishers to know any of this. Especially if they are losing the lawsuit of fearful of losing since its OUR money they will be paying out with.

    Google ACAI and you get EWA NOT paying a pub and a bunch of other results http://www.blackhatworld.com/blackhat-seo/affiliate-programs/330375-blamads-still-hasnt-paid-me-today-2.html

    Big huge thanks to Pace for blowing the cover off of this stuff. Its like the Adscend stuff I mean that case is ongoing even though its not mainstage and Pace did his bit to cover it.

    If EWA has been served then its publisher money that gets frozen and paid to the gov.

    Mad props to Pace – he doesn’t get nearly enough credit for all of this sh*t. One article like this can save a pub’s ass

  • jeff says:

    So……………….you weren’t planning on telling us what the people were doing wrong so we can avoid it. Nice, I guess even with reading this article I might be sued.

  • Wilson says:

    Good looking out Pace. They are basically demanding networks involved in this sell out their pubs.

    So if Im running blamads its not only my money that can get frozen but my name could be handed over. That fu%kn sucks.

    Pace like everyone else man gotta give you big thanks here and I agree you deserve more credit. This is definitely something that needs to be covered. At least I know what to expect here and I can get organized and p rotect myself.

  • Jean says:

    F’ing Ryan Eagle thanks a lot. I did go out and google “Acai EWA” and sure enough EWA is plastered with Acai stuff.

    I might as well keep this alive in thanking Pace here you do a great job in providing real news and even letting us vent.

    For Ryan Eagle you basically fu#ked everyone here and your advertisers and your pubs. That whole ‘come at me im so tough i dont give a fu%k attitude’ that works in this space where nobody is really big or powerful. Im sure you have that same attitude with the FTC right? Tell them to kiss your grill? Or more like save your ass anyway you can or what about Facebook? They hammered Adscend who kept things on the low. Eagle openly took FB traffic.

    You really shouldnt get cocky and TRY to get on big companies radars cause now its basically a race to see who takes EWA down first, FB who you openly fu%k with or the FTC

    great looking out for us people trying to make a buck.

    Pace if you get anything else can you pls add a part two to this ? or update asap thanks man. REAL NEWS that matters!

  • pacelattin says:

    Guys, we specifically did not mention networks for a specific reason. First, some of the networks involved told us about this and are good guys for alerting us about it. Secondly, just because a company received a CID doesn’t mean they necessarily did anything wrong. Sometimes its just to get info and make sure they did NOT do something wrong.

    Let’s not name people unless we actually know they were involved.
    pacelattin recently posted..Plenty of Fish Sued for Photo of Dead SoldierMy Profile

  • Maxcash says:

    Pace, good point but let’s be fair.

    EWA may have received a CID, Eagle says he hasn’t been served and that is fair, he probably hasn’t but chances are a CID has been issued.

    To sue 10 networks, about 100 must be CID’d so as to gather evidence. EWA did a lot Acai stuff a simple google search reveals that. So they probably have received a CID (civil investigative demand) so as to reveal information on advertisers and affiliate publishers who are the REAL targets.

    HOWEVER, this IS an article people need to read since it is impactful.

    Anyone saying its BS probably works for EWA – the proof is all over the web. They did a lot of Acai stuff and networks are being hit for that. If you know anything you know CID’s go out in bunches before 1 person gets sued – this is how evidence is gathered. Now if you say NO to the CID then you’re lined up to get sued. Ryan Eagle plays tough but unless he’s out of his mind (I highly doubt) then he’ll comply and turn over what he needs to.

    Also the whole thread is people who brought up great points about why EWA would be involved and its FACT – again google it, I hate it when people try to dismiss FACTS because it doesn’t serve their purposes.

    As for Pace, you would be completely remiss and lose credibility as a reporter and head of a publication if you ran away from the real stories and shut things down that have ACTUAL merit.

    Also it’s fine if people are concerned about EWA not paying since that’s valid and its been cited and it’s completely fair to worry about having your info turned over in a CID since that’s the purpose of CID’s. But anyone bashing Eagle on a personal level, insulting his gf or anything the like is an absolute child. It’s business and this is a legit thread and article – good posts but anyone here to flame without talking business or voicing concerns, please go back to your nintendo ds.

  • Heron F says:

    just kinda got caught up today and was reading
    one thing here concerns me

    “Ryan Eagle says:
    March 28, 2012 at 6:22 pm

    ** removed by request **
    Reply to this comment » ”

    Did Ryan retract saying that they arent involved or…??? What was removed?

    Also im assuming Blam did get a CID since they are associated with the acai stuff and thats easy for anyone to figure out let alone feds. i know what CID stands for but im not a lawwyer. I know a CID doesnt mean youre in trouble necessarily but just that youre somewhat close to something and might have helpful info but can anyone tell me
    exactly WHAT info you have to turn over in a CID? gets me a bit nervous here

  • Joe says:

    “Ryan Eagle says:
    March 28, 2012 at 6:22 pm

    ** removed by request **
    Reply to this comment » ”

    Whoops, well that just confirms a few things….

  • Ian says:

    “Damn, why they tryna stick me for my paper?”

  • Hope everything goes well , in this industry lawsuits and FTC are something you should consider from very first day :)
    CPA Marketing Blog KJ recently posted..How to check your CPA network is broking offersMy Profile

  • Rich Gorman says:

    HA! Remember a few months back when I put up a post about affiliate marketing being dead? Duh!

    The problem with affiliate marketing via CPA networks is the total lack of transparency advertisers receive. You don’t know who the affiliate is, you don’t know where the traffic is coming from, and often times the presale page is cloaked so you cannot view it.

    CPS Affiliate Platforms such as Commission Junction or LinkShare will always serve a purpose and add value to larger brands. CPA network, for the most part, are just a stepping stone for beginning advertisers. Those of us that wanted to create valuable campaigns quickly learn that CPA Affiliate Networks are NOT the solution.

    Looks like a lot less heat is coming from that now :)

    • Steve Sauve says:

      I have to disagree with your statement, Rich. While our landscape is littered with the remains of CPA networks that failed because they couldn’t manage their cashflow, couldn’t manage their risk or couldn’t manage their publishers, there is still a place for CPA networks that are run properly.

      There are too many types of campaigns for which CPS models cannot work, and too many merchants who have no interest in managing affiliates themselves. For that reason, there is still a long future ahead for CPA networks. Many of the campaigns in those two categories are owned not by beginner advertisers, but by larger, established companies.

      Unchecked greed is the biggest problem facing CPA Networks, and it affects affiliates, advertisers and networks equally. As long as there are still people in either of those categories who put short term profitability over long term sustainability, they’ll be stuck with problems.

      Those who learn how to operate the right way can continue to survive year-over-year.

      • Rich Gorman says:

        Hey Steve,

        Which networks are you referring to that are making it work compliantly?

        The only networks that I know of that are doing well are a few that changed their models and adapted to more of a full-service performance marketing agency, i.e. AdsDirect and Ads4Dough.

        Pls LMK. Thx!

        • observer says:

          what you meant to say is

          the only networks i know of who are doing well have ditched advertising in the US and instead are scamming consumers in the UK, Ireland, NZ, Australia and other foreign countries where the US cant enforce their rules.

          • Rich Gorman says:

            “Observer”

            That doesn’t merit a response since:

            1. You decided not to use your name.

            2. It’s patently false.

            Pace – why are we allowing defamatory comments from anonymous users on this blog? Hit me up.
            Rich Gorman recently posted..1 Trick To A….My Profile

            • The truth says:

              Rich log in to Facebook with a hometown in the uk and a female over 30 and you’ll see that all the networks you claim are doing it right are just helping publishers use fake news articles and spammy rebills in other countries

              You got mad that someone laid out the truth not the smoke and mirrors your networks are using

              Both networks you mentioned are the worst offenders next to click pith as c2m

  • Robin says:

    We can solve this problem. Easy and cheap.

    Let us setup a legal entity here in Switzerland and run the traffic from it. Then the FTC cannot do anything about it,

    Contact (at) crashinvest,com

    • Observer says:

      tyPical affiliate methods, I assume the above poster is here because the networks and publishers mentioned here use him

      Good luck hiding your cash the FTC watches this blog I am sure they will investigate and see who uses this guy and come after you

      Any asset protection company. Knows the only people you can’t hide from is the government

  • Fire says:

    What about companies like pulse360 who send out compliance docs to their advertisers showing fake news pages and their guidelines on using fake news pages?

    What about the ads going to fake stories that continue to litter pulse360′s ad network

    Don’t they have a responsibility to eliminate its use vs allowing and helping in its use?

    Maybe it’s time someone contact the FTC about pulse and their network and their continued push for pubs to deceive consumers so try make high epc’s

  • Tom says:

    I moderated an ABA call-in panel on affiliate marketing on April 23. Good presentations, but nothing new to readers here. What’s new? ABA members can listen to answers to 2 questions I posed to panelists from Florida AG and FTC, toward the end:

    http://www.americanbar.org/content/dam/aba/multimedia/antitrust_law/20120423_at12423_mo.authcheckdam.mp3

  • sunscreen says:

    When someone writes an post he/she keeps the idea of
    a user in his/her mind that how a user can be aware of it.
    Thus that’s why this article is great. Thanks!
    sunscreen recently posted..sunscreenMy Profile

  • Paul says:

    ewa is not paying me – I have been hassling for weeks – what can I do?

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