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Internet Marketing

Perry Belcher Returns?

By Internet Lawyer

Whether you’re an Internet attorney or not, you probably noted that Perry Belcher ‘retired’ from Internet marketing training in October 2009. You can read about it at Perry Belcher: Checkmate.

Despite a massive Twitter info product launch and Twitter followers allegedly exceeding 100,000, Belcher deleted just about everything as part of his “retirement.” Blog posts and most followers simply disappeared.

Rather than take a covert role working with his partner as the front man, Perry appears to be recreating his public image again.

Here are some handy links to keep track of what Perry Belcher is up to these days.

As I wrote in October 2008, “The post was not an attack on Belcher but rather a warning to all Internet marketers about the type of behavior that draws unwanted attention from the government.”

The same holds true for this post.

Watch what he does and says.

If Perry Belcher re-assumes “guru” status or starts speaking from the stage again, you’ll know the retirement is over. At that point, there will probably be more than an Internet attorney or two watching what he does. Regardless, it will make an excellent case study of the do’s and don’ts of Internet marketing.

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Website Attorney: Don’t Lose Your Merchant Account

By Internet Lawyer

merchant-account-website-attorneyAs a Website attorney, I’ve noticed that both the U.S. Federal Trade Commission (FTC) and credit card companies are now cracking down on deceptive trade practices involving Internet marketing and billing practices. New guidelines and rules are being issued. Some top Internet marketers have even lost the ability to process credit cards (at least temporarily) because of their past conduct that MasterCard, Visa, and others consider to be unacceptable.

The changes will affect your ability to use pre-checked boxes in offers, free trial offers, deferred billing, up-sells, cross-sells, and numerous other marketing and billing practices. Transparency and informed consent are going to be key…if you want to accept credit cards and debit cards for payment.

Here are 7 free resources for you to use to make sure you’re handling credit and debit card transactions properly in your business. Your Website attorney can help you by answering specific questions.

  1. FTC – Could Free Trial Offers Be ‘Fee’ Trial Offers in Disguise? (PDF file)
  2. Visa – Deceptive Marketing Explained
  3. FTC, Visa, and BBB Partner to Educate Consumers About Free Trial Offers and Online Scams
  4. MasterCard Rules (PDF file) – Be sure to read Section 5.9.7 about Illegal or Brand-damaging Transactions
  5. MasterCard Chargeback Guide (PDF file)
  6. MasterCard Merchant Security Rules and Procedures (PDF file)
  7. Visa E-Commerce Merchants’ Guide to Risk Management (PDF file)

Like many big Internet marketers, I recommend and use PowerPay to handle credit card processing for my business ventures. In an e-mail received a couple days ago, PowerPay described the changes this way…

PowerPay wants to inform every one of changes expected from the Payment Brands regarding practices that are considered “Brand Damaging”.  As you may be aware, both Visa and MasterCard are taking action in response to increases in consumer disputes related to card-not-present and direct response products and services.  PowerPay is endorsing the adoption of Best Practices to support our merchant base in conducting business in a manner that protects both businesses and consumers from fraud.  To date no formal announcement has been received, however PowerPay is issuing this communication now in an effort to educate and assist our agents/merchants in complying with anticipated Payment Brand mandates and actions.

MasterCard has recently warned the Acquiring community that “Negative Option” enrollment will be considered a “Brand Damaging” business practice. “Brand Damaging” is a very broad term and is still being defined, but in light of recent fines to our counterparts, we must be proactive. Indications are that MasterCard will require immediate termination of merchants identified as using this business practice, along with any other practices considered “Brand Damaging”.  This follows recent policy changes from Visa regarding descriptor formats and disclosure of corporate entities related to Direct Response offers, with the intent to enforce all chargeback and transaction monitoring programs as defined by the associations.

PowerPay cannot accept merchant applications for products and/or services employing “Negative Option” enrollment, in addition to the following practices:

Marketing models that employ “Free-Trial”, “Deferred Billing” and/or “Shipping Only”.  Customers must be receiving a tangible good or contracted service in exchange for charging of payment cards.  Incentivized discount offers are acceptable when the cardholder is receiving something in exchange for payment, however we will be unable to support accounts engaging in hidden or delayed charges and ‘free’ offers that are not truly free.

“Cross-Selling” and “Up-selling” business practices.  All sales should be directly between the business entities (merchant) processing the transaction and the cardholder, with cardholder authorization for all purchases.

Per Payment Brand guidelines, the use of multiple merchant accounts, billing descriptors and merchant processors may be viewed as an attempt to avoid chargeback monitoring programs and is prohibited.  Perceived non-compliance has led to termination of processing relationships.  PowerPay will review the business consideration for opening multiple merchant accounts to ensure compliance with Payment Brand guidelines.

Transactions generated from internet traffic and all other lead sources must be managed and monitored for potential fraud using an approved system.  Third Party service engagement may be a requirement for account approval.

The FTC has recently published guidelines regarding “Negative Option” enrollment programs and is taking a very aggressive position against merchants utilizing/employing this business practice.  Recommendations take in part from the FTC’s website may include but are not limited to the following:

Material terms should be disclosed in a clear, concise manner.  Unnecessarily long or inconsistent terms are viewed as an attempt to mislead the consumer.

Terms should be disclosed in a conspicuous manner, clearly placed and labeled on websites in a location that indicates the importance and relevance to the transaction.  Fonts and colors must be easy to view.

Material terms must be disclosed prior to completion of the transaction and before a financial obligation is incurred by the consumer.

Customers must provide afbusinessative consent to any offer, examples include a mandatory “I Agree…” statement checkbox, where the client is acknowledging the Terms and Conditions of the offer and consents to be entered into continuity program as a result of completing the transaction.  Pre-checked boxes do not qualify as afbusinessative consent.

Merchants must not discourage or make difficult in any way the disclosed cancellation procedures and all cancellation requests must be honored in accordance with the stated terms of the transaction.

This is not unique to PowerPay. Internet marketers using other services sent me nearly identical language they had received from their credit card processing companies.

Some of the Internet gurus who lost their accounts will now try to pretend they’re experts on the subject of ethical billing practices and offer you teleseminars, webinars, and maybe even sell you an info product or two about how to avoid getting nailed like they did.

What’s the guilty guru’s motivation for this new interest in doing the right thing?

  • Rebuilding their public images after losing their merchant accounts?
  • Selling you more products?
  • Teaching you how not to get caught?

The motives don’t have to be pure but you should always question the intent behind it. If someone tells you they’ve created a “compliance system” or “best practices” that guarantees you won’t get in trouble with the FTC or lose your merchant account, run the other way. Sometimes hype crosses the line into outright deception.

I don’t expect you to be an expert in credit card billing. Talk to your Website attorney. However, it is your responsibility as an online business owner to keep up with the legal and contractual requirements of accepting credit and debit cards as payment for your products and services.

Note that some of the Internet marketers who have lost their credit card merchant accounts didn’t know they were engaging in marketing practices that could get them into trouble. Don’t use a broad brush to paint them as con artists. Some deliver real value but inadvertently goofed up and are now paying the price. Everyone makes mistakes. If perfection is the standard by which marketers are to be measured, none would meet it.

Just as success leaves clues, so does integrity. Perform due diligence before you invest in products or services from anyone.

Additional Recommended Reading:

Free Trial Offers: Are They Good Deals?

Internet Marketing On Life Support

Just In From Visa MasterCard

To your success!

-Mike the Website attorney

FTC FAQs: December 1 Deadline

By Internet Lawyer

ftc-federal-trade-commissionI’ve been getting many questions about the new FTC guidelines that
are changing the way that you can market online.

To save you time, here’s the Frequently Asked Questions (FAQs).

Q: When did the guidelines go into effect?

A: December 1, 2009.

Q: Will I have to fix my website because of the new guidelines?

A: If (1) you’re based in the U.S., or (2) you live outside the
United States but sell to U.S. clients, you’re probably going to
have to make some changes to reduce your legal risks.

Q: Is it serious?

A: It’s bad enough that some big info product gurus are retiring
because they don’t want the FTC to come after them under the new
guidelines. Their business models were based on doing things that
can get you into a lot of trouble now.

Q: How much trouble?

A: Depends. Could get away with something. Could get a nasty FTC
letter telling you to stop. Could also get sued, have your assets
frozen, pay a big settlement, and even be barred from online
marketing in the future.

Q: What’s the solution?

A: Ideally, you’d want your Internet lawyer to help you fix things
to reduce risk. If you can’t afford that (typically 4 figures per site),
at least read the new guidelines at ftc.gov and the complimentary
special reports you’ll find on this blog.

Your Affiliate Marketing And The New FTC Guidelines

By Internet Lawyer


On Friday, November 20th, I spoke to a group of Internet entrepreneurs about how to comply with the new FTC guidelines (effective December 1, 2009) when doing affiliate marketing online. This presentation covered both marketing as an affiliate and running an affiliate program.

This is the video of that presentation. Of course, consult your Internet lawyer if you have specific questions.

FTC New Compensation Disclosure Requirements

By Internet Lawyer

ftc-compensation-disclosure-special-reportThe Federal Trade Commission’s revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” is causing a stir in the Internet marketing community because most website owners and affiliate marketers simply don’t know how to interpret the guides.

Will it be the end of blogging and affiliate marketing as we know it?

What about testimonials, endorsements, earnings claims, and compensation?

What has changed?

How will these changes affect online marketing?

When did the new guidelines go into effect? December 1, 2009.

Yes, the rules of the game have changed. But if you learn the new rules, you’ll be ahead of your competition that doesn’t.

To your success!

-Mike

Update: The special report is no longer available. For more information about website protection, go here.