Litigation

FTC Is Set To Tighten Rules on Paid Testimionials on The Internet

By John Darer

The US Government is considering a new requirement that those who write about products or services on the Internet must inform readers if they received compensation. It seems fair to me.

Apparently companies pay a staggering $1.6B annually to generate the buzz from paid reviewers.

The structured settlement industry has at times suffered an intermittent raft of what this author calls "pay per post crap". You get unlicensed writers with no bona fides from remote villages in the Philippines or India claiming to "have a friend who has a structured settlement" who "just happened to call" them for advice on what to do. The writers of course happen to know one of the cash now pushers and their posts conatin in-text links to them. Other submissions have content so poorly written it's a joke.

This author also believes that other "paid testimonials" deserve proper disclosure.

Forge Consulting developed an ad campaign centered around former Senator and Presidential candidate John Edwards' purported testimonial (in addition to other testimonials). From about October 2005 to July 2007 Forge Consulting posted a testimonial purportedly from John Edwards on its website. It also used the same "testimonial" in letters to lawyers soliciting structured settlement annuity business. The evidence available from public information suggests that it was mathematically impossible for John Edwards to have utilized the structured settlement services of Forge Consulting as implied in the testimonial and the way it was used by Forge to gain a competitive advantage over other licensed insurance agents in soliciting trial lawyers.  According to publicly available information John Bair, the President of Forge, was a known bundler for Edwards. Unfortunately this was neither disclosed by Forge with the  "testimonial" posted on the website nor in the solicitation letter.

The FTC will vote on the new marketing rules this summer, according to an article in the June 21, 2009 Parade magazine.

Full post as published by Structured Settlements 4Real on June 21, 2009 (boomark / email).