Despite all the growth in the industry in the last 20 years, with everything from the now almost defunct Performance Marketing Association, to the attempt of the IAB to control the affiliate industry, there has been one truth: the industry is horribly and terrible corrupt.
It would be easy to blame one person, or to claim that since Affiliate Summit constantly pushes scam artists and “make money at home” schemes in the past, that they are at fault.
Maybe it’s all the fake “fraud companies” in the industry, which only serve as a way to help unethically validate their clients crimes. Time and time again these companies pop-up, claiming they will “detect fraud” and validate marketing efforts, only to be exposed as nothing but often just fly by night operations that don’t function for any purpose except to steal money.
If you didn’t know, 10 years ago I left one of the largest affiliate marketing companies in the world, after bringing it almost $200 million in revenue – because the FBI contacted me and pointed out that they were doing potentially illegal things and had me testify to a grand jury. It was one of the hardest points of my life: I had to make a choice to be ethical and more importantly, not involved with crooks.
Since then many of the employees of that company, such as Jennifer Johnson, have been brought up on criminal or civil charges. Companies like GetAds dissolved and shutdown in the area, all alumni of the same company. Unfortunately, a few employees made their rounds – despite their involvement in unethical and illegal schemes, and keep finding themselves into the industry.
I’ve decided after 10 years of running this publication, exposing the scams, the frauds, the worst of the worst, that it’s time to really take down the industry a notch and find those guys who shouldn’t even be allowed to ever step foot in an agency. Whether it’s a Colorado company refusing to hire people of color, or a “data verification company” just defrauding everyone, it’s time to expose all crimes in the industry.
Do you know of a huge scam in the industry? If so, hit me up pace@lattin.us
California is notorious in the non-compete world for its virtual prohibition and scrutiny of individual non-compete and other types of restrictive covenant agreements, such as non-circumvention and non-solicitation agreement.
But what about when the agreement is between two commercial entities?
Rule of Reason
In August 2020, the Supreme Court of California in Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 573 (Cal. 2020), examined an agreement between two businesses and found “that a rule of reason applies to determine the validity” of business-to-business non-compete agreements.
California courts have generally invalidated agreements not to compete upon the termination of employment or upon the sale of interest in a business without inquiring into their reasonableness, they have invalidated other contractual restraints on businesses operations and commercial dealings only if such restraints were unreasonable.
Retraining commercial trade in some way is not necessarily illegitimate in California. In fact, that court identified a multitude of ways in which contractual limitations on the freedom to engage in commercial dealings can promote competition, including, but not limited to, ensuring that marketing efforts are not exploited by contractual partners.
California’s “per se” ban on non-competition agreements is generally limited to employment agreements. As long as a business-to-business noncompetition provision does not negatively affect the public interests, is designed to protect the parties in their dealings, and does not attempt to establish a monopoly, it may be reasonable and valid.
This case should be of interest to networks, lead aggregators, publishers, lead generators and general counsel. Contact an affiliate and performance marketing attorney if you are interested in the implications of the Ixchel decision, or for assistance with professionally drafted affiliate agreements, ad network agreements and other performance marketing agreements.
Takeaway: Commercial entities should strive to ensure that contracts with restraints on business dealings are objectively reasonable and otherwise satisfy applicable legal standards, including, without limitation, whether the agreement harms competition more than it helps by considering the facts peculiar to the business in which the restraint is applied, the nature of the restraint and its effects, and the history of the restraint and the reasons for its adoption.
A marketing firm is claiming that social media influencer Dan Bilzerian, the CEO of Ignite International Brands (CN: BILZ) is one of its clients and he paid a huge amount of money per month to boost his Instagram following.
YouTube personality Tom Nash revealed the claims of the marketing firm that it received a monthly payment from Bilzerian over the past two years.
“They claim Dan Bilzerian was their client since 2018 and paid them a staggering amount of $25,000 per month to boost his Instagram profile,” Nash said.
Claims against Dan Bil Bilzerian
Additionally, Nash stated that Bilzerian suddenly stopped paying the marketing firm for its services but gave him the “benefit of the doubt” and continued with its services. However, Bilzerian’s tab reached a whopping $100,000, which remains unpaid.
As a result, the marketing firm stopped its services, which coincides with the lack of activity on Bilzerian’s Instagram profile. His last post was on Aug. 31, seen here.
Nash also commented that Bilzerian allegedly preferred to use Bitcoin as a payment method. Nash even went on to question whether Bitcoin is the primary method in which the Bilzerian family moves around money.
It is interesting to note that the marketing firm’s claim against Bilzerian is vague. First, it did not explain what type of service was provided to Ignite CEO, and how did it boost his Instagram following? Did the marketing firm invited or paid the people who are following Bilzerian on the social media platform? Was it responsible for taking his photographs and writing its captions?
A $25,000 monthly service fee is significant, thus it is reasonable to assume that the marketing firm must have done a lot of work to improve Bilzerian’s Instagram following. So, it should be easy to support its claims with evidence.
Do these claims hold any water?
Indeed, Nash’s revelations about Bilzerian in his most recent video are unproven allegations. For one, the marketing firm that offered Bilzerian services on his Instagram account remains anonymous.
Furthermore, there have been questions raised as to the legitimacy of Nash’s source. There are three big questions at play here. One, what prompted this source to speak out in the first place? The timing is surely suspicious as Bilzerian has been a topic of conversation over the last few months, most of which has been bad press
Second, why did this alleged marketing firm continue to offer its services even after payment had ceased? The alibi Nash gave is that the unknown firm wanted to give Bilzerian’s the ‘benefit of the doubt’ since they have done business together for over two years.
Lastly, if Bilzerian did indeed utilize these services to pump up his Instagram account, where are the receipts for these transactions? There has to be a paper trail for this to be corroborated.
While interesting, these allegations are exactly that, allegations. We know that Bilzerian has already announced that he will be putting $25 million of his fortune into Ignite. So, he certainly has the cash.
According to the Oxford dictionary, hacking is ‘the gaining of unauthorized access to data in a system or computer’ and we all know that. Well, the marketing world has certainly turned this negative into a commonly used positive verb when it comes to accelerating growth from a data and digital marketing perspective. It’s a fascinating topic from a long-term vs short-term and promise vs delivery standpoint, as agencies and consultants are constantly evolving new skills, tools and tech solutions to hack and deliver growth in the shortest possible time.
Once again, I have brought in three experts, good friends of mine from the media and tech industry, to tell us what it takes to hack growth, including: creating data and platform-driven strategies, especially on marketplaces; leveraging media audit to deliver higher efficiency and return on investment; and the role of artificial intelligence (AI) for contextual and relevant placement of content to drive better click-through rates (CTRs) with the right audiences at the right time.
Samir Ayoub, CEO & Founder, Medpush Media Consultancy
David Quaife, Managing Director MENA, Pattern International
Sunil Sivarajan, Co-Founder & CBO, Simplifai Labs
What does the term ‘growth hacking’ actually mean to your clients and the businesses you manage in the region? To illustrate a recent example, along with key trends observed during the pandemic?
David: Most people will associate the word ‘hacking’ by taking short cuts to get quick results. But true digital growth hacking should not only accelerate growth in the short term but also look at the longer-term picture. We use as much data as possible across marketing, customer and product, and with the use of technology and creative strategies we speed up growth for that brand. Longer-term growth is achieved from A/B testing, experimentation and constantly reviewing the data to ensure you are getting the best possible growth for a business or brand.
Sunil: “I will give you a hack”, said my friend’s eight-year-old son when we were struggling to open the bottle of ketchup at his place. I was not only amazed to hear this from a young child, but also instantly connected with him as the term is extensively used in the start-up ecosystem and has entered the corporate world recently. A growth hacker typically uses creative, innovative, analytical and low-cost methods to grow the business exponentially.
The term ‘growth hacking’ has become more commonly used in business since the outbreak of the pandemic, as we are all forced to think about growth hacking strategies. We are seeing inevitable shifts in traditional ways of conducting business due to innovative technology, accelerated digital transformation and changes in consumer journeys. It is remarkably interesting to see many businesses using growth hacking techniques, manoeuvring through the challenges and leveraging on the opportunities that the pandemic has opened for them.
Universally, the online retail and education fields have witnessed accelerated growth during the pandemic. In the Middle East region, it is interesting to see how other industries have also stood out, especially during the lockdown, with travel restrictions and social distancing being strictly followed. The proptech (property technology) industry has transformed, with leading players providing customers opportunities to view properties through AI in the comfort of their homes, investors and landlords using cloud services to streamline rent collection and management tools, and tenants using apps as payment methods. The hotel industry has been working to mitigate the pressure of low occupancy rates by converting them into co-working spaces.
Growth hacking techniques could also include smart strategies to augment business growth and retention of customers. With consumers’ heightened awareness about ethics and values, especially during the pandemic, it has become important for clients to understand their consumers and their journeys. Local banks in the UAE are following a strategy of recruiting key personnel from diverse work backgrounds to get a better understanding of the expectations of their consumers, whereas in the past they only considered people from financial backgrounds. Companies that know what their clients want and what they expect can also work on customising the customer experience to create loyalty and recurring revenues. Retention is far better than acquiring a new customer and saves significant cost.
Samir: All marketers aim for growth year-on-year, which is becoming an even more challenging task given the market conditions in the past few years coupled with the impact of Covid-19. Driving efficiency across the entire media value chain is key for growth. There is a strong need to question and revisit the practices and put in place a more cohesive and accountable system, to track performance not only in digital but across all channels with a proper correlation between results and investment. The name of the game is real-time data and optimisation. At Medpush, we take a holistic view of the challenge in hand while delivering higher efficiencies and value for every dollar invested.
With focus and investments shifting to bottom-of-the-funnel objectives and short-term tactics, what is the significance of brand strategy, positioning, idea and creativity in achieving growth?
Samir: The ultimate objective of any marketing investment is to sell while building brand image and values. Marketers have to be super careful in how they invest to attract consumers and convert into sales, as by focusing purely on conversion they may lose on brand building and vice versa. The role of each channel within the marketing mix varies. Some are good for short-time and quick conversations, others are suitable for long-term conversions and brand building. There should be a balance not only in choosing the mix but also in the type of activities and message for healthy and continuous growth.
Sunil: The focus on the bottom of the funnel is mainly because the digital marketers are under pressure to deliver results quickly, and hence most digital campaigns do not meet the marketing objectives set by the advertiser.
Jeff Green, CEO at The Trade Desk, says, “there is no way to win the game if you don’t set the rules up in a way that you can actually win the game”. In a game of football, every player in the team needs to be given certain credit for the team’s win, not just the one who shot the goal. There are many people who do not click on the ads despite being exposed to the banner or a video but may just go directly to the brand’s website and convert. Last click attribution is important, but it is also important to give credit to the awareness and prospecting phases of the funnel. Additional metrics such as view-through conversions can help us understand those in the prospecting phase of the funnel. CMOs are great storytellers and will resonate well with the digital reports that we share with them if we can build a story with all the relevant metrics representing campaign performance. They very well understand the significance of the consumer journey and will look beyond focusing on the bottom of the funnel.
Ideally, to improve campaign performance, it is recommended to do the following:
1) Keep building your customer base, as the current customers you have is always shrinking. Start with connecting consumers at the top of the funnel. Awareness and consideration stages are equally as important as they have always been before Covid-19. Keep building first-party data that is most relevant for your business. Push them down to trigger consideration, and finally purchase through your retargeting strategies.
2) Capitalise on the cost advantage with lower CPM campaigns. Publishers have witnessed ad CPMs drop with the current crisis at play in spite of increases in site traffic. Buy more impressions and reach more prospects.
3) Focus on quality inventory. Place ads alongside content that evokes positive sentiment and emotion to the consumers, so that advertising messages are better received and resonate with consumers.
David: All businesses in 2020 have had to realign their commercial objectives to deal with the added pressure of Covid. Short-term tactics like promotions don’t drive growth but are fixing a short-term problem. Brands should be starting to think about how they can drive growth in the future based on the new norms we find ourselves in, but also anticipating how consumer behaviours and expectations will change in the near future. This is where brand positioning and strategy will play a vital role.
Technology, specifically AI, is being leveraged across marketing actions, amplification and customer experience. How is it helping brands achieve better CTRs across the full marketing funnel?
Sunil: Digital media teams in agencies usually cite challenges that they regularly face like ad fraud, brand safety, viewability, in-target audience, the emergence of new platforms, dropping attention levels, and maximising user impact and value. Not one platform provides a solution for all of these pressing issues. So, today, agencies and clients are forced to work with multiple platforms and each of these platforms is competing to improve the brand’s campaign performance leveraging on its unique selling point.
However, a cramped digital media plan with many line items is not recommended, as this may lead to retargeting the same users and not optimising towards incremental performance. The planner today must diligently work towards selecting a mix of suitable platforms that complement each other and deliver on the campaign and overall marketing objectives of the brand. Planners today are considering metrics beyond CTRs, as those do not correlate to business objectives like increasing revenues or customer acquisition. Also, there are pitfalls of chasing high CTRs or clicks, as there could be a skew towards low-value clicks. It is extremely important to also focus on metrics like viewability and inventory quality.
Samir: Technology is needed for facilitation, speed, tracking and improving efficiency but it’s not sufficient on its own. The role of talent remains unavoidable to manage and run the tech devices, generate ideas, provide insights, conduct analytics and give recommendations to clients. In other words, talent should leverage rather than relying purely on tech for better results
David: From a practical implementation point of view, I think machine learning should be the focus for brands looking to optimise CTRs and also conversion metrics. There are a plethora of tools out there that leverage machine learning to optimise actions based on data in real-time, something businesses could have only dreamed of in the past. Our tool Predict optimises campaigns on Amazon using huge amounts of data; the more data we give it the better it gets. Where we have seen this work even better is using AI to predict the future opportunity of a product or brand based on the data we have, to take a proactive approach to marketing.
Volkswagen launched a marketing campaign. It paid dealerships nationwide to retain a third party to place service reminder calls to their customers. Automated technologies were purportedly used to make calls to plaintiff without consent.
The Central District of California decertified a class of these TCPA plaintiffs because consent issues were so individualized that the plaintiffs could not satisfy the predominance requirement. Trenz v. On-Line Administrators, Inc., No. 15-8356, 2020 WL 5823565 (C.D. Cal. Aug. 10, 2020).
In order for a class to be certified by a court, there is a requirement that common issues of law and fact must “predominate” over individual issues. There is no single test to determine when the “predominance” standard is met. Different courts have created different tests and standards for determining when certification is appropriate. For example, some decisions have followed the historical standard that the predominance requirement is met if the common question is at the heart of the litigation. In using the “predominance” analysis to bar class certification, courts often focus on whether the class will promote efficiency and judicial economy.
Here, after a class was certified, the court found that the defendants would need to produce “significantly more” evidence to show that customers had provided “actual consent to be contact by an autodialer” such that “individualized inquiries actually predominated over the common questions.”
The defendants moved to decertify and argued that that they had developed the “requisite . . . evidence of consent” that the court’s certification order had found lacking. The defendants alleged that certification was improper because records obtained from a handful of the dealerships showed “a variety of circumstances across the class bearing on whether individual class members consented to receiving phone calls under the program.
The defendants then argued that the individual transactional context in which the class member’s phone number was provided and whether they consented under the TCPA, would vary depending on whether the class member: (i) would reasonably expect to be contacted about future servicing of their vehicle; (ii) was provided with varying disclosure forms with notice regarding use of contact information; and (iii) was provided with additional, varying privacy notices and contracts wherein the class member consented to being contacted about future vehicle servicing, for ‘marketing’ purposes, and for the sale of additional products and services.
Finally, the defendants argued that due to the foregoing, the consent issue would have to be litigated “on a class member-by-class member basis, meaning that individual questions predominate.”
The court agreed with the defendants and decertified the class.
It held that “the necessity of individual inquiries is a clear bar to class certification in TCPA matters.”
The court concluded that the defendants correctly identified factual circumstances relevant to “whether any individual [c]lass [m]ember provided consent . . . and if they did, the scope of that consent.”
It also noted that the plaintiffs could not establish predominance because of the ‘“nearly endless’ permutations of the transactional contexts” under which consumers had “provided prior express consent to the receipt of … calls.”
Takeaway: The case should be of interest to online lead generators because, here, the defendant defeated certification by showing that class members provided their numbers in different “transactional contexts.” This resulted in individualized issues regarding the existence and scope of consent. Arguably, seemingly minor, subtle differences in the provision of a telephone number could potentially give rise to individualized issues regarding the existence and scope of consent.
The Supreme Court has started its new term. FTC defense practitioners are watching closely as the Court is considering issues that may dramatically impact FTC CID investigations and enforcement actions, particularly whether Section 13(b) of the FTC Act impliedly authorizes courts to award the FTC equitable monetary relief.
As blogged about here and here, the Supreme Court (Liu v. SEC) recently upheld the Securities and Exchange Commission’s disgorgement authority but imposed certain limits, including the deduction of legitimate business expenses in the monetary award calculation process and a requirement that disgorged funds be returned to directly investors. The Liu court also questioned the imposition of “joint-and-several liability.” Each alone is significant. Together, potentially devastating to the FTC’s mission.
In the context of the Federal Trade Commission, the Ninth Circuit (AMG Capital Management v. FTC) has held that courts’ equitable powers include awarding equitable monetary relief, including disgorgement. In stark contrast, the Third Circuit (FTC v. AbbVie Inc. et al.) and Seventh Circuit (FTC v. Credit Bureau Center) have held Section 13(b) only authorize injunctive relief.
Given the widening splits of authority on the issue, the Supreme Court granted certiorari (i.e., the Court decided to review a lower court’s decision) in the AMG Capital Management and Credit Bureau Center matters. It is anticipated that the consolidated matters will now decide the issue of whether Section 13(b) permits courts to award and FTC attorneys to seek monetary relief in the form of disgorgement.
Those that have received a civil investigative demand (CID) from the Federal Trade Commission, are engaging in negotiations with the FTC, or are defending an FTC lawsuit should consult with experienced FTC defense attorneys to leverage the online legal challenges to the scope of the FTC’s remedial authority pending the Supreme Court ruling.
Some have already attempted to do so.
To date, for example, numerous motions to stay based upon the impending Supreme Court decision have been filed by defendants – some, being granted – in lower courts across the nation.
A statutory distinction may provide clues as to what the Supreme Court may have in store.
Section 21(d)(5) of the Exchange Act specifically allows for “any equitable relief.” By contrast, Section 13(b) of the FTC Act expressly limits itself to injunctive relief. The latter being more narrow than the statute in Liu – where the Supreme Court significantly narrowed the SEC’s monetary disgorgement authority – suggests a possibility that the Court could dispose of the FTC’s ability to seek monetary relief under 13(b).
Perhaps legislative action with built-in threshold safeguards – similar to those required by Section 19 of the FTC Act – designed to ensure that Section 13(b) is used only in the context of severely egregious conduct is forthcoming. Section 19 permits the FTC to pursue a federal court action to obtain equitable money relief for violations of administrative cease-and-desist orders provided that the matter is first initiated in the form of FTC administrative complaint proceedings, the matter is brought within a three (3) year limitations period, the FTC wins, and it is established that a reasonable person would have known that the conduct was “dishonest and fraudulent.”
In September 2020 Senate Republicans introduced S. 4626, the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (the “Act”). While the Act is a comprehensive privacy bill, a section thereof would solidify the FTC’s ability to seek obtain monetary restitution.
What’s more, President Trump’s nominee to join the Supreme Court is a Seventh Circuit Judge – Amy Coney Barrett. While Barrett was not on the Credit Bureau panel that ruled the FTC does not have broad restitution powers under Section 13(b), she was involved in the vote to deny rehearing of the decision.
Takeaway: The Supreme Court ruling on whether the FTC can obtain equitable monetary relief in federal court pursuant to Section 13(b) of the FTC Act and how such relief should be measured will have a significant impact on the digital advertising law industry and service providers that work directly or indirectly alongside of them, such as payment processors. If the Supreme Court agrees with the Third and Seventh Circuits, the FTC ability obtain monetary relief in federal court may be limited or precluded altogether. However, the FTC may: (i) still be permitted to use Section 13(b) to enjoin a party in federal court (while imposing asset freezes and receiverships); and (ii) utilize Section 19, despite the onerous hurdles it presents, to pursue a federal court action and obtain equitable money relief.
Richard B. Newman represents advertisers, marketers, lead generators and service providers in FTC administrative actions, enforcement actions and CID investigations. Follow FTC defense attorneys on National Law Review and on Twitter @ FTC defense attorney.
Informational purposes only. Not legal advice. May be considered attorney advertising.
Instagram Stories and Facebook Stories have been around for a while now but have you heard of the latest social channel to introduce this feature? LinkedIn has recently launched its Stories feature across accounts worldwide. While LinkedIn might not sound like the kind of place that you would typically post snippets of your day, many brands are already taking to this new feature.
What are LinkedIn Stories?
LinkedIn Stories are made up of short photos or videos that can last up to 20 seconds. These will only be available to view for 24-hours and can be customised to include work stickers or even text. The Stories will be highlighted at the top of the feed in order for any connections to find them easily.
The set-up is very similar to the existing story features present on other channels. For those who have used these before, it shouldn’t be too difficult to adapt to.
Are any brands using them?
LinkedIn Stories might have only rolled out this week but some brands received trial versions beforehand. It has been evident that brands in the US, Brazil and France have been quick to give these a try. Take Christian Dior, for example, they used Stories to post behind the scenes shots that allowed others to get an insight into the brand.
Other brands are using this feature for showing how products are made, revealing competition winners and hosting Q+As.
Head of Marketing Solutions in UK, Ireland & Israel at LinkedIn, Tom Pepper, expressed his views on the new feature. He said: “We believe Stories can become an integral part of brands’ communication strategies. My advice to any brands looking to experiment with Stories is – just do it! The great thing about Stories is that they don’t have to be slick or overproduced – as long as they are authentic and match your brand and audience.”
This advice is likely to be taken on board by brands who might have been unsure about how to approach this new feature.
How can affiliates use them?
LinkedIn is often seen as a much more professional setting than other social channels. Typically, affiliates use this channel for networking with other affiliates, affiliate programs and brands. However, others have company pages and so could really start to leverage Stories and create something special.
The tool has been designed to provide lightweight conversations and affiliates should take this on board. Perhaps, they can offer news about their growth, new partnerships and even their experiences. It might be worth trying out Q+A sessions or competition posts to see how they perform on this feature.
It is also worth noting that affiliate managers can use this feature in their marketing strategies. New promotions and affiliate announcements can be added to Stories to gain extra exposure.
Affiliates must ensure they start strong with their story as the average person only watches between 40-60% of it. Of course, keeping their attention is also key so the perfect balance must be found. As long as you can stay on brand and provide value, this could really be an effective tool.
Don’t ignore it
Some may believe that they won’t gain any value from LinkedIn Stories and the truth is that this feature is still in its infancy. However, as more brands start to make use of the feature, you won’t want your competitors to be one step ahead of you.
Our advice is to continue to use LinkedIn in a professional manner while giving an insight into your business.
An affiliate marketer named Peter Szatmari must pay more than $13.8 million for fraudulently soliciting investors to open and fund binary options accounts on websites operated by unregistered brokers.
According to the Commodity Futures Trading Commission (CFTC), the U.S. District Court for the District of Hawaii entered an order of default judgment against Szatmari on September 14.
The default judgment follows an order by Judge Derrick K. Watson on August 13. Judge Watson adopted the findings and recommendations of Magistrate Judge Kenneth J. Mansfield on July 28, 2020.
The court order requires Szatmari to pay approximately $6.25 million in restitution to defrauded customers, $1.9 million in disgorgement, and a civil monetary penalty of $5.7 million.
Additionally, the order permanently prohibits Szatmari from violating the Commodity Exchange Act, registering with the CFTC, and trading in any CFTC-regulated markets.
The order resolves the CFTC’s complaint against Szatmari and his business partner, David Sechovich.
CFTC accused Szatmari and his business partner of fraud
In October last year, the CFTC filed charges against Szatmari and Sechovich for allegedly creating and disseminating fraudulent solicitations of binary options trading.
The CFTC alleged that Szatmari and his business partner lured approximately 25,000 customers to open and fund binary options trading accounts. They alleged pitched free access to automated trading software that they claimed to generate significant profits with little to no risk of loss.
Additionally, they allegedly misled customers by portraying actors or fake personalities as actual owners or users of the automated trading software. They also allegedly depicted fictitious trading results as real.
Szatmari and Sechovich allegedly generated $3.8 million in fees while the customers lost most or all of their funds in their accounts.
Affiliate marketing is a form of performance-based marketing that promotes third-party products and services, such as binary options trading. Affiliate marketers such as Szatmari and Sechovich usually solicit customers using emails and/or posts on the internet.
Handcuffs frame the word 'fraud' among newspaper cuttings
More than 200,000 Americans have lost $145 million linked to the COVID-19 pandemic since the start of the year, the Federal Trade Commission (FTC) reported on Tuesday (Sept. 22).
The median loss was $300, but it was more than twice that amount, $665, for victims 80 years of age or older. At 7,628, the FTC found that the greatest number of complaints came from people aged 30-39, who lost a total of $13 million with a median loss of $209. At $16.2 million, the group that lost the most amount of money overall was between the age of 50 and 59, filing 6,329 claims for a median loss of $209.
Fraud has soared during the coronavirus, spurred by the massive shift to digital that has left doors open for scammers. In addition, many people were banking online for the first time, and may have been unaware of the warning signs for fraud.
“While people are scared about their health and finances, con artists are having a field day,” Lucy Baker, a consumer program associate at the U.S. PIRG Education Fund, told CNBC.
“We all need to be on our guard. Before you click, pause first. Do your research and ask yourself if that website, email, text, direct message or call is legit. Be wary of handing over your money or personal information,” Baker advised.
Most victims, 26 million, lost their money on a website, 20 million fell prey to an email scam and another 13 million were duped when the consumer initiated the contact, the FTC reported.
The top fraud categories were online shopping, where nearly $44 million was lost, and travel and vacation scams, which totaled $24 million.
In August, SocialCatfish.com, the identity verification nonprofit, reported that U.S. losses from COVID-19 fraud and ID theft have reached nearly $100 million since the pandemic emerged in March.
The report by the California-based agency, whose mission is to prevent consumers from being defrauded online by learning the identity of individuals or organizations, put a spotlight on the depth of what it called a fast-growing criminal enterprise that includes everything from phony stimulus check offers to shopping scams and fake COVID-19 cures.
It’s almost here, CMP (consent management platform) D-day! The question is, are you ready?
On October 15, Google and other demand sources are ramping up the compliance requirements again, and this time,it’s serious!
Publishers will receive a message similar to this below:
“IAB TCF V2.0 errors detected – we’ve detected an issue on your IAB TC string on one or more of your sites or apps. These errors may affect your ability to serve ads to European users. A detailed report is available on the EU user consent page.”
WHAT IS IAB TCF V2.0?
TCF or Transparency & Consent Framework, was created to enable consumers to provide or withhold consent regarding their data being processed by online platforms. At the same time, the framework gives consumers the ability to gain control over how vendors may use their data.
You might wonder why there was a need for a TCF V2.0, and what was wrong with V1.0? Publishers generally did not like the first version as many loopholes existed, which favored AdTech vendors. However, as TCF was one of a kind and a first for the advertising industry, it can’t be expected to be perfect the first time around.
In fact, IAB and its creators expected new versions to emerge from V1.0.
The new version of TCF has focused on improving the original framework by increasing consumer transparency and providing greater control to publishers.
Tony, over the years, Netflix has offered seven-day free trials and even occasionally a 30-day free trial. The company has said the free tryout helps persuade people to subscribe.
However, if you look at the site now, you will not find a ‘Free Trial’ button. Why? Because Netflix has quietly ended the free trial.
“Free trials are not available, but you can still sign up and take advantage of all Netflix has to offer,” Netflix states. “There are no contracts, no cancellation fees, and no commitments. You have the freedom to change your plan or cancel online at any time if you decide Netflix isn’t for you. As a Netflix member, all our plans give you access to our full catalog of TV shows and movies. Choose a plan that works for you and sign up for Netflix!
The world’s leading streaming service does not provide a reason for the change. (The TV Answer Man will ask Netflix later today for a clarification.)
However, it could be because Netflix is concerned that more consumers will use the free trial as a way to get free television for a week during a time when the streaming category is getting increasingly crowded. Netflix is now facing such deep-pocketed competitors as Disney (Disney Plus, Hulu), Comcast (Peacock), AT&T (HBO Max) and Amazon (Amazon Prime).
If you change the region on the help page, you can see it’s the same for most major countries — it says free trials aren’t available in Japan, the UK, Canada, and Australia. The only place I was able to find a mention of a free trial still being available (and keeping in mind I didn’t test every single country) was Afghanistan. That would lead one to believe the free trial has been junked all over.
Just to test this, I logged out of my existing account and attempted to create a new one. And yeah, there’s no option for a free trial of any length — as soon as you sign up, you have to choose a plan and you don’t have an option for a free trial. Netflix doesn’t even mention it during the sign-up process.
Part of me wonders if Netflix is attempting to eliminate users who take advantage of free trials with multiple email accounts. I’m sure they exist, and given how many streaming services there are now, you could probably get weeks’ worth of content out of a single burner email and every free trial in the streaming wars. Given Netflix is chockful of content and everyone knows it, it’s probably a smart time to get rid of the free trial. I’m sure there are plenty of consumers out there who won’t be happy about it — just because it’s good for Netflix‘s business doesn’t mean we won’t miss having the option.
So if you didn’t already know, Netflix plans start at $8.99 and you can cancel anytime, if that’s any compensation. We’ve reached out to Netflix for comment.
Update: Netflix today released this statement regarding the elimination of the free trial:
“We’re looking at different marketing promotions in the U.S. to attract new members and give them a great Netflix experience.”
Boston-based supplement marketer NutraClick LLC and its two officers have agreed to pay $1.04 million and be banned from negative option marketing in order to settle Federal Trade Commission allegations that the company’s deceptive sales and billing practices violated federal law and a 2016 federal court order from a prior FTC case.
According to the FTC’s complaintand proposed contempt order, NutraClick and the other defendants violated the Restore Online Shoppers’ Confidence Act, the FTC’s Telemarketing Sales Rule, and the previous court order, by failing to clearly and conspicuously disclose all material terms of their negative option sales offers, despite agreeing to do so in the 2016 order.
The $1.04 million that the defendants will pay under the settlement represents 100 percent of the consumer harm they caused, as well as the total revenue made through their allegedly deceptive conduct. The FTC may use it to provide refunds to consumers billed by NutraClick on the last day of the trial period.“Hiding the true deadline for canceling a free trial offer isn’t just bad business – it’s illegal,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “And that’s why NutraClick will be permanently banned from using negative options in the future.”
In 2016, NutraClick agreed to settle the FTC’s complaint alleging that it did not clearly disclose that people who ordered samples of supplements and beauty products would be enrolled in a membership program and billed from $29.99 to $79.99 monthly unless they canceled within an 18-day trial period. At least 70,000 people filed complaints about the operation. The company netted tens of millions of dollars from the unauthorized recurring charges, the FTC contended.
The Commission vote authorizing the staff to file the current complaint and proposed orders was 2-1-2, with Commissioner Rohit Chopra voting no, and Commissioners Rebecca Kelly Slaughter and Christine S. Wilson not participating. The complaint and proposed orders were filed in the U.S. District Court for Central District of California.
Amazon deletes tens of thousands of reviews from its sites after two studies focus on use of fraudulent five-star reviews to promote substandard products
Amazon has removed tens of thousands of product reviews following analyses by academics and media outlets into the problem of fake reviews – an issue said to have worsened due to the coronavirus pandemic.
The Financial Times said Amazon UK has removed about 20,000 reviews following an investigation by the paper.
Amazon also removed many of the thousands of reviews used to manipulate the rankings of some 1,500 products examined in a study by the University of Southern California and the University of California, Los Angeles.
Large numbers of five-star reviews are a key element in boosting a product’s rankings on Amazon’s websites around the world.
Manipulation
Such reviews, along with price and delivery timeAmazon, can also allow a product to achieve algorithmically calculated endorsements such as the influential “Amazon’s Choice” label.
The company’s sales system means that unknown companies can achieve large short-term profits for inferior products in a short space of time by soliciting fraudulent five-star reviews, USC and UCLA researchers found.
They found that companies used communications channels such as Facebook groups to solicit five-star reviews by promising a refund for the product, along with a commission in some cases.
The system means the reviews come from a “verified purchase”, giving an appearance of authenticity.
Profits
Reviewers then apparently sold the products on eBay, listing them as “unused”, the FT found.
Improved rankings lead to higher short-term sales and quick profits as users are duped by the manipulation of Amazon’s algorithms, the USC and UCLA study found.
But after the manufacturers pulled their incentive programme, rankings quickly plummeted, driven by one-star reviews, and ended up below their initial levels.
The fake review system is overwhelmingly used to improve the visibility of unknown Chinese brands, both investigations found.
The problem has apparently worsened during the pandemic as consumers have flocked to online e-commerce platforms such as Amazon.
Online review analysis group Fakespot said fake reviews appear to have peaked in May, when 58 percent of Amazon UK products were accompanied by apparently fake reviews.
The UK has a “much higher percentage” of fake reviews than Amazon’s other platforms, Fakespot chief executive Saoud Khalifah told the FT.
‘Suspicious’ activity
The paper found that nine of Amazon UK’s top 10 reviewers were engaged in suspicious behaviour. Amazon deleted reviews posted by seven of the region’s top 10 reviewers following the FT‘s probe.
The paper found that Amazon UK’s top reviewer had reviewed £15,000 of products, ranging from smartphones to electric scooters to gym equipment, in August alone, posting a five-star review on average every four hours.
The individual in question made £20,000 since June through eBay sales of products identical to those reviewed on Amazon. The reviewer told the FT the items were duplicates and that he did not profit from five-star reviews.
The Competition and Markets Authority launched a probe in May into manipulated reviews, estimating they influence £23bn in UK online shopping spend each year.
Amazon said it uses AI and user reports to spot false reviews and suspends, bans and sues people who violate its policies.
“We want Amazon customers to shop with confidence knowing that the reviews they read are authentic and relevant,” the company said in a statement.
By leveraging Rakuten Advertising’s expansive publisher network and Button’s new deep linking and app-tracking Reach technology, Sam’s Club is among the retailers that have been able to enhance the user experience by seamlessly routing users to apps they’ve already installed, extending the brand experience for loyal shoppers, boosting the usage of its own app and capitalizing on higher conversion rates from in-app shopping sessions.
Sam’s Club can manage partnerships and view app affiliate data from Button on a Rakuten Advertising dashboard. Also, publishers benefit from app payouts without having to update links, while consumers enjoy a shopping experience that moves seamlessly between Rakuten Advertising publisher sites and branded apps.
“Reach has created a major opportunity to utilize the affiliate channel to drive installs,” noted Rick Ton, senior director, marketing at Bentonville, Arkansas-based Sam’s Club, a division of Walmart. “By working with Button and Rakuten Advertising through Reach, affiliate marketing has become a major engine that fuels Sam’s Club’s key mobile initiatives, more than we ever thought it could before.”
“Together, Rakuten Advertising and Button are creating value for our clients by giving them a way to engage with their users in the mobile affiliate space,” said Jeff Wender, chief revenue officer at San Mateo, California-based Rakuten Advertising. “By partnering with Button to create new ways for brands to engage consumers, we’re also helping marketers to deliver on the experience and value that consumers seek.”
“Acquiring new app users has historically been dominated by two channels — Facebook and Google,” observed Michael Jaconi, co-founder and CEO of Button, which has offices in New York, San Francisco and London. “Today, we are shaking things up by offering marketers a new opportunity for driving app acquisition through their affiliate channel with Reach. With app users being three to five times more valuable for retailers, Button and Rakuten Advertising are enabling Sam’s Club to gain more loyal users from their affiliate traffic, and this integration requires no integration work from any parties.”
Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer’s list of the top food and consumbles retailers in North America, while Sam’s Club ranks No. 9 on the list.
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