Legacy Learning Systems Inc. sold $5 million worth of DVDs of guitar instructions through affiliate sales. The problem? The affiliates didn’t disclose that they got a huge commission for each sale – instead, it looked like their reviews were totally impartial.
The FTC, under a settlement in which Legacy agreed to pay $250,000 and monitor its affiliates.
THE MORAL OF THE STORY
Affiliates must disclose any benefit they get from, or relationship they have with, the product supplier. Oh, and the FTC sees everything.