ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to the attention of ERSP through a consumer challenge.
ERSP reviewed online advertising for YES International and identified several claims for review, including:
- ”Meet Diane. She is one of our clients who has begun to achieve her financial goals. In her first three month she has made $16,000 online.”
- “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.” [Kimberly T.B. Chandler, AZ]
- “Not many companies offer UNLIMITED EARNING POTENTIAL. YES International does!”
Advertisements that feature a consumer and convey that his or her experience with a product or service may be “typical” when that is not the case, are required by the Federal Trade Commission to clearly disclose the results that consumers can generally expect to receive. Accordingly, ERSP noted, marketers should, when using consumer testimonials, either provide substantiation that the consumer’s stated experience is “typical” or, conversely, indicate what the typical result would be given the scenario presented in the testimonials.
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.
In this case, ERSP focused on the testimonials at the Yes International home page (“Meet Diane. She is one of our clients who has begun to achieve her financial goals. In her first three month she has made $16,000 online” and “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.” [Kimberly T.B. Chandler, AZ]).
ERSP requested substantiation from the marketer. The marketer assured ERSP that both testimonials are true and correct, and relate to specific customers, but was unwilling to provide specific information to ERSP relative to these customers.
In the absence of evidence to support the consumer testimonial claims, ERSP recommended that the marketer discontinue the use of the testimonial earnings claims found on the Yes International home page.
ERSP then examined the marketer’s Facebook page, which contained the claim “Not many companies offer UNLIMITED EARNING POTENTIAL.”
ERSP noted that the claim appeared to draw a competitive distinction between Yes International and other affiliate marketing programs. Further, by indicating that earnings potential is “unlimited,” ERSP said, it would not be unreasonable for consumers to believe they could make hundreds of thousands of dollars by using the program. However, there was no disclosure of the typical amount of money users of the program have earned or could expect to earn from using this program. ERSP recommended that the marketer discontinue the claim in this context.
The challenger in this case asserted that the marketer’s principal officer had registered domain names for a number of other affiliate marketing websites and ERSP did, as part of its review, examine the claims made at sites that included www.onlineprofitmasterssystem.com, www.homeprofitmasters.com, and www.365dailymaster.com.
In the course of its review, ERSP requested more information regarding the marketer’s relationship to the Domain Registrant; the marketer did not provide any additional information.
In examining the sites, ERSP noted that each site displayed at least four testimonials. However, the exact text of each testimonial appeared on multiple sites, attributed to different consumers. ERSP recommended that the marketer discontinue the use of such testimonials.
ERSP remained concerned with the marketer’s assertion that the domains and testimonials had not been used for some time, and that the advertising at issue had been permanently withdrawn from use by the marketer. With the exception of two domains, which ERSP recognized are no longer valid, the remaining domains were still active at the time of ERSP’s review.
YES International, in its marketer’s statement, said it appreciated “the opportunity to participate in the Electronic Retailing Self-Regulation Program.” The company said it would provide an appropriate disclaimer on its website regarding the testimonials and eliminate from its corporate Facebook page the comparison of its employee compensation to compensation paid to employees of other similarly situated companies.
Further, the company said, it “will strive to eliminate duplicate or replicated testimonials from any website it operates for the purpose of advertising its services and products, and to ensure that the testimonials are substantiated and do not overstate results from YES’ products and services.”
