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How would you like an $11,000 government fine for blogging?

My owner is a marketing & business consultant in San Diego. I might be dating myself, but who here remembers Joe Willie Namath, he of the New York Jets and their unbelievable upstart victory over the established Baltimore Colts in Super Bowl III in 1969?

In 1974, Joe Willie starred in a series of "sex symbol" advertisements for Beautymist pantyhose, wearing the pantyhose, no less. The Federal Trade Commission came down hard, and eventually the "Truth in Advertising" law was passed that basically said that if you were a spokesperson for something, you actually had to use that something. Joe Willie started the sex symbol advertisement blitz which continues to this day. Gee, thanks, Joe Willie!

Truth in Advertising has resulted in some interesting problems over the years, particularly in Super Bowls, World Series, NBA Championships, and the Olympics, because certain players had advertising contracts with companies that were not part of the advertising contracts for the various sports.

Today, the Federal Trade Commission (FTC) decided to come down hard on bloggers. Bloggers? Yes, bloggers! You and me.

Professional bloggers are in an uproar today after the FTC decided to impose new rules to govern endorsing products on the Internet. Bloggers "who review products must disclose whether they have any material connection to advertisers," such as payments or free products that the companies might be giving them. The new rules take effect December 1, 2009, and the penalty for violators is an $11,000 fine.

As real estate professionals, we understand the practicality of full disclosure, but bloggers are complaining that the new rules are "too vague and far-reaching." Dana Loesch is of the opinion that "big government is trying to control all web sites under the guise of protecting consumers." Hot Air's Ed Morrissey inquires, "Where does the FTC's jurisdiction end?" and BuzzMachine's Jeff Jarvis says that the new rules are based on the "myth that government can and should sanitize the Internet for our protection." Ron Hogan of GalleyCat notes that "the rules for bloggers don't apply to the traditional media," and Harry McCracken says on Technologizer that "it's not even clear who qualifies as a blogger under the FTC's regulations."

How can this affect us as real estate professionals? Consider the following:

If you work as the listing agent for a builder and post information online in your blog, you might need to disclose that you get paid by the builder, as well as anything else the builder might provide you -- free tickets to the Zoo, car and gas expenses, etc.
If you have special arrangements to work with a bank on their short sales, you might need to disclose those arrangements if you post something about the bank or those short sales online.
If you blog about a specific service provider, like a home inspector, and you have a special relationship with that service provider, like being married to him, you might have to disclose that in your blog online each time you say something about that service provider.

Those are just a few that I could think of, but I bet there are many more. This might be an instance where we have to practice what we as real estate professionals preach:

If in doubt, disclose, disclose, disclose.

As someone famous said back in January 2009, "It's going to get worse before it gets better." Big Brother is here, and it might be time to tell him that enough is enough!

We are ActiveRain!

**********

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Posted by Russel Ray, San Diego Marketing & Business Consultant on 10/06/2009 05:36 PM

Comments (83)

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83 Comments on How would you like an $11,000 government fine for blogging?

OCT

Personally, I don't know that that is a bad thing. If someone is getting paid by someone and they are talking about it like it's the "be all, end all" then I want to know if they're getting a "bonus" in some way or another. There's nothing wrong with upfront honesty. JMHO.

Well isn't that interesting, I always liked seeing Broadway Joe in his pantyhose! Who knows! maybe he really did wear them, but just didn't want anyone to know?

Hi Russel ~ I was listening to something about this on NPR as I was pulling into the driveway. While I can see how in some instances it could be hard to grasp what you'e supposed to do in other cases it's pretty clear cut.

First thing that came to my mind was a guy who charges a pretty penny for his blogging training. I had read a glowing post about him on somebody's blog but didn't realize until much later that that blogger was getting something for referring people to him - it was not at all obvious in the post. And it seems that bloggers who write in certain fields are being paid specifically to write about products - that *has* to be disclosed.

Beyond the clear cut examples it gets fuzzy.

Liz

Russel,

I heard about this today on a blogtalkradio program where they were discussing Public Relations 2.0. Wow, regulating this is going to be tough. What does this mean to all the affiliate marketers... who make money by promoting many different services on their website which contain a blog... they get money when someone buys on their site... so all the links? Seems like one more can of worms.

I saw this on another post this morning. You would think that the government has enough to do without spending time chasing down bloggers. Does this mean I can't drink the soda's and eat the chocolate offered by my favorite settlement company if I include their name in a blog post? I'm not planning on losing any sleep over this....yet.

Russel - I don't see this as a concern since I work in a profession that is accustomed to disclosing relationships. As a consumer, I like to know if the writer has a relationship or interest in the product, service or business they are promoting.

However, I would have a problem if the disclosure had to include a full itemization of the compensation (i.e.: tickets to the zoo, a free lunch once a month, a box of chocolates).That would be crazy.

I agree with Carra that this would be very difficult to regulate, and also with Cindy that I will not lose sleep over this either.

I live in New York State and I thought my state was broke. This seems like another waste of money to be chasing down "bloggers." I would not even know how to fully disclose everything in a blog. If I post a home picture and the floors look great, will I have to disclose my vendor discount on the flooring?

I agree with the above posts, this would be very difficult to regulate.

Hi Russel, if we buy or sell or are related to anyone we are working with that is buying or selling we must disclose. We are used to it. There are always people out trying to take advantage of others - hence laws must be made.

HI Russel - There are some good reasons and good applications for these rules, but the important issue is how they will be enforced and against whom. In the political world, this might make it clear who is really supporting what and who is simply posting something that amounts to a paid political ad.

Russel

Great post, With all of the issues in the country you would think they would be workong on what really important. This could be an issue.

Good luck and success.

Lou Ludwig

Dear Russel,

Interesting post. I also heard this on my way home on NPR. It seems our government could be working on something more important like; extending the First Time Home-buyer $8000 tax credit!?!

Betina Foreman Austin Realtor

Hey -- I thought Joe had great legs (lol).... I hope that the law is clear... As with most legislation, what I have read about so far leaves a lot to be desired. Please keep us posted.

Russel this is something we will have to watch. It was only a matter before government intervention, too many failed to disclose when they should have.

This is why it is difficult to believe the government can make rules based on clear thinking with open and thoughtful regulations... they pass a law..then make a regulation...then put into law and another befuddled, vague, badly written law is on the books... they are also chasing down thrift stores and garage sales for the easy bake ovens and rubber duckies you may be selling... it is ridiculous!

this isnt abour disclosure... we can all do that... it is about control...

Russel, I guess the government wants to control blogging now. Good grief, they can't fix anything.

Honestly, this is just another excuse for government to get in our business. You think they're going to make the rules fit everyone? Heck, no. It will be selective enforcement. More Thug Politics. Thanks for bringing it to our attention.

HI Russel, I just wrote a short post on this and someone commented that they had read your post on it, so had to come and check it out. Excellent post on the topic.

This is going to get a bit dicey on some blogs I bet -- will be interesting to see how they read come the future.

OCT

The ruling came about as a result of of fake blog being positioned as testimonials. I've been through this before in another industry. It was in the early 90's when "results not typical" became the disclosure norm.

There rules are serious and it simply means that we have stop and think before we put pen to paper so to speak. Ultimately it's not a bad thing, but it is the first step to regulating the internet.

Hey Russel, Realtors(r) have had this same scrutiny under RESPA, so it's not really anything new although it does give it a new twist.

Wow, very interesting that they are choosing to go after bloggers. Have they had any problems that you're aware of?

Interesting to read people's take on the topic. I appreciate knowing if I am doing business with someone who refers me to someone else that they are being compensated for it. I believe the compensation could cloud the referrer's judgement in some cases.

I do not want to be regulated on what I can and can't blog about. Freedom of speech!

The regulation reminds me of Freakanomics - knowing what the motives of people are. Not a terrible thing. Don't want it to go too far.

Thanks!

Russel,

Since joining AR 6 months ago, I've been contacted by quite a few entities that offer me something in return for "an occasional post" describing their great product or services. While I turned them down flat, clearly others accept those arrangements - otherwise the businesses wouldn't continue to seek plugs.

Now I always wonder if posts that recommend products are unsolicited or not...

Oh Oh Russel...does that mean all the people who have profiles that fabricate sales figures, staffs...imaginary transactions and experience could forever be banished from the blogosphere ?

Big brother certainly is here and he is doing his best to get his own room! Every time we turn around we are told what we can and can't say, people wake up, our 1st amendment rights are slowing disappearing.

Todd Clark - www.LivingBeaverton.com

Big brother needs to be kicked out the door. We can not let government continue to run our lives.

Oh, you aint seen nuthin' yet!

This is a prelude to controlling political speech on the 'net via blogging as well. Under the "Fairness" doctrine, any political opions expressed will have to have the opposing view presented.

Check out the Fairness doctrine and its history. It used to be law, then was repealed. Now the Dem's are trying to get it reinstated with a much more far-reaching, heavier hand and with very sinister implications.

It is an attempt by the Democratic party to control all media outlets and what's being said. Free speech and political opposition are being assaulted under these laws and rules.

This attempted control of the 'net by the FTC is the test case to see if they can make this stick.

Russell:

I think Sally & David's point above is interesting. In other words, does this mean that bloggers have to be truthful?

I understand where they are coming from to a certain degree; however, I will be interested to see how this gets enforced. Probably our answer to this is to be truthful about everything and disclose, disclose...

very good advice. I will keep that in mind. thanks for the post.

With over million blogs a day, good luck to the government to keep a tab on each one of them. I am of the firm belief now that the laws are written for the PRIMARY benefit to the LAWYERS and SECONDARY benefit to the Government. Common folks always lose.

Now, I am not against the spirit of the law. But I wonder how does the government intend to regulate it.

I don't take the product reviews and product recommendations "verbatim". I do my own research and comparisons and then decide what I should buy or pass.

And , since I don't accept any rewards (including attending free golf), I am not worried about this anyway.

Thanks for the heads up. I think the key is that the law is vague and we must be careful. Agree: disclose, disclose, disclose.

Geez, does that mean that all these ignorant realtors that are bitching about the short sale and REO asset managers have to disclose that they have never personally used them?

What a joke! If they want to do something worthwhile, how about a law similar to Regulation Z for the credit card companies. I'm so tired of their "_% INTEREST UNTIL THE FIRST DAY OF YOUR BILLING CYCLE THAT ENDS IN ..." mailings. When you factor in the 4% "processing fee" in the fine print, the APR is usually in the teens. Not to mention their exorbitant over limit and late payment fees. And now the airlines are starting to catch on to the banks fee structured profit centers. I guess it's easier to pick on a blogger than the people that put up the money to get you elected. :-(

This is a very good and very relevant post for all bloggers and I do not have a problem disclosing if the need arises! Nice job!

I hate to tell you this, but we should have seen it coming. For a very long time, Mortgage Brokers have had to disclose their compensation whether via origination fee or even what the lender may pay the broker by way of yield spread premium. Now, the government is talking about restricting how much the broker gets paid. There is way too much control by the government in the name of "consumer protection".

so many rules all the time for things that don't matter!!! What a mess we have here. I don't get any spiffs from anyone, but I don't know how that will affect the consumer anyway

This slays me that this doesn't apply to "traditional media." I do write about businesses but I believe in paying it forward and giver's gain. ARGH!

I wonder if I will have to go back and write disclaimers like "we hang out with them at the dog park and my husband smokes cigars with him on Friday night, our dogs are BFFs. Sometimes we watch each other's dogs and have dinner together."

puhleeze!

Hey, Folks!

There are lots of stories out today about the new FTC guidelines.

One believes that the new FTC guidelines will provide legitimacy to online social network marketing. I'm not sure what that means because ActiveRain has been providing legitimacy to my online social network marketing for over a year now.

Another believes that the regulations were written by attorneys to provide attorneys more job options. I can see Joe Blow using Product A based upon Jane Doe's online social networking blog recommendation and being unhappy. Joe Blow calls Jack Schmidt, his attorney, and files a lawsuit against Jane Doe and Product A. Oh, this could get so interesting. I think I'm going to go back to school -- law school!

I'm wondering if I can get a job with the FTC just sitting around each and every day reading online social networking blogs. I can do that. Really I can.

Russel

I'm not sure how this will play out in terms of the real estate field, but it will be interesting to see this play out in the greater advertising community.

Todd Anderson

http://YouInParkCity.com

Good info - I agree with others that disclosure (if endorsing) is appropriate. The rules are sure to start changing and coming now... comes as no surprise! Congrats Russel on the shiny new AND the feature in the newsletter this morning.

I would love to see this type of legislation first enacted to protect us from Congress and Washington DC in general.

I want to know that legislation that is proposed is done so because certain parties funnel money into election campaign coffers.

I love it when you hear groups of people who want big government and massive regulation... until it effects them. Fight big government... you need to protect the smallest minority.. the individual.

(I know an advertisement when I see one, whether on TV, radio, internet or blog. I don't need the government protecting me.)

Well thank God no one in my family is a title person, a mortgage banker, a home inspector or an appraiser! I live in a small town and the one thing everyone knows about my family is my husband is in law enforcement! And dropping my name will NOT get you out of a ticket :-)

Seriously, though, when will the long arm of Washington stop giving us wedgies??? I'm starting to chafe.

The intent is good but the abuse potential is greater because of the lax or lack of definitions of terms (blogger, products/services, min $ amount...)

This is merely gov employees justifying their jobs by controlling the citizens' lives. It will never stop until they get to how much air we are allowed to breathe for free...

This is just another case of bureaucracy trying to control the free market. Every PR company works for their client...does that mean they have to disclose that relationship? Then what would be the point of a PR company? Money is a motivator...but every advertising agency writes commercials for their clients because they are getting paid...and beer doesn't get you women...even if the commercials say so. Why can't they just trust the consumers in this country? They must all be complete idiots at the FTC...so they think we are idiots too!

I like the idea of disclosure as much as the next guy (or gal) but good luck trying to enforce this one.

good thing we have the government to save us from EVERYTHING.

and christianne gordon, #43...thanks for the word picture!

An eye opener. As usual, government is trying to legislate morality.

Thanks for the timly update, Russel. Goes back to the old: if you even think that you maybe should disclose it, then you definietly should.

of all the problems and challenges this country has lets focus on the bloggers then we will work on the recession

Just what we needed another government agency !( that won't understand the business they're supervising !)

Thank you for posting this, Russel. I'm not sure how relevant the disclosure is in other industries, but I, personally, think it's critical in the real estate industry because of RESPA. Of course, RESPA was enacted way before blogging, so maybe it's time for a revision or clarification, related specifically to blogging. Do you have a link for the information you came across? I'd be interested to research it further.

Then there are related state laws which can prohibit just about anything being given out...title companies can't even give out mints or gum in Utah, whether or not it's disclosed. For the people who play by the rules, it's impossible to compete with those who don't. Mandatory disclosure helps keep things 'fair', which brings it down to who performs the best, rather than who can give you the most 'stuff'. (Although the world in general is not fair, a certain amount of fairness is required in insurance practices.)

Russel: This is a disclosure issue for certain … not sure how it will all play out … or how long it will last … only time will tell.

hmmm... nice to know....

Good to know. what it is really about is attacking free speech and raising money. The governments hates what it cannot control and tax.

I say just let people blog, but I suppose in some cases people can over step.

How about ~ read blogs at your own risk, they are people saying their opinion most of the time, geeze! How ridiculous. Next we'll have to have blog disclosures. If I want to read a fat man's review on the best desserts, I'll understand that it's opinion! Probably a good opinion, but it's a person none the less ~ mmm doughnuts.

That's our Uncle hard at work trying to figure out how to seperate us from our hard earned money at every turn.

I'm a believer in FULL DISCLOSURE... and I don't approve of Realtors that are lenders, inspectors, appraisers, surveyors, etc... or that are married to one, or related to one... that steer people without full disclosure. If someone endorses something or someone, and there's a connection, I believe in the freedom of speach and FULL DISCLOSURE. I feel they are two different issues. Bloggers that misrepresent products or services are no different and should be required to provide FULL DISCLOSURE. Honesty is always a good policy.

I hope that it doesn't get out of hand to the point of interfering with our free speech, for heaven's sake.

what is this world coming to....

I don't see the problem with disclosing if you're being paid to rave on about a product. That way, we know whether we can take the recommendation at face value or not.

Like Renee I believe in "givers gain." If we have vendors who refer clients back and forth because we have faith in each other's skills, does that need to be disclosed?

Big Brother needs to go home.

I was unaware that these rules would be going into effect soon. Thanks for keeping us all updated. Yet another good reason to ActiveRain on a regular basis!

I respectfully disagree and say, GO BIG BROTHER, in this case!

I want to know and I think it's good to know. Too many people are getting duped by bloggers, like #23 said, that are getting paid to say something nice and you think it's a forthright testimonial. Social media has become soft-selling advertising for many people. There are big departments in ad agencies focused just on this stuff.

It will be interesting to see how it all it regulated though. I assume a blogger is going to have to get reported. Hum...

Referring people back and forth because you believe in a vendors skill is different, to me, than having to admit the vendor gives you $100 for every referral. The latter is what appears needs to be disclosed, and to me is a good thing.

as always, the FTC thinks it knows better than the public. if the same rules applied to traditional ads, I'd be all for it, but singling out the internet is a dnagerous path

As some one who has bought products on the internet, I would like to know when some one is gettig paid to tell me to go buy something. In real estate matters "disclose, disclose, disclose"

I don't see this as much of a big deal at all. We should disclose these kind of relationships if they exist.

Russel, I got this from a Google Alert because I haven't been on AR. I am apalled to hear this actually! I thank you for the information but will have to think if this will have an effect on how or what I write about and my business as well. Somehow, I'm not surprised......Thank you for the information!

More confiscation of personal freedom by an out-of-control fascist government.

No, I'm not some doomsday nut, either. People don't get more "main stream" than me. However, my career is largely based upon gathering and coldly analyzing FACTS. And, there can be no more disturbing fact, than the change in the freedoms in our country, most evidently and most rapidly over the most recent 12 months.

The FTC's position is as heavy-handed as it get, before they require your blog to be submitted for approval before being published. Gee! Isn't this a 1st Amendment issue? And, what about PRIVACY, and FREEDOM OF ASSOCIATION?

Could it be that the FTC is acting as a stealth agent on behalf of the IRS in tracking income they suspect is going unreported? Or, is it just another money grabbing scheme?

Either way, better start thinking of an alternative method of communication; maybe a TM blog?

By the way Russ, I won (an undisclosed item) on the Jets / Colts superbowl. What a GREAT game. For me, it topped off the best year in New York sports history; the NBA championship by the Knicks, the World Series by the Mets, then, the coup de gras, Super Bowl win by the Jets.

It's something that may never occur again in my shortening lifetime.

Full disclosure - no issue with me on this one at face value anyway.

Your right, when in doubt just disclose and you'll be OK.

Bookmarked!

Love the links. No thanks to the fines!

Russel, job security for attorneys who may experience salary reductions if tort reform ever passes. If it's going to apply to bloggers, it should apply all across the board. And it's just another freedom being impinged on.

People, those of you up there who are saying "oh, it's a good thing, oh, it's okay..." don't miss out on the PRINCIPLE here that government is steadily encroaching on our FREEDOM to say and do what we like in the USA.

OCT

Very informational post Russel. I just joined the Guerrila Marketing group. Thanks for that tip.

Wow Russel. Blogs are supposed to be people's thoughts and opinions. Now it is getting weird.

Russell,

At first glance looks like the FTC is going overboard. Like one of the commentators stated, how do you define a blogger? Strange stuff.

OCT

Relationships should be disclosed...it is good for everyone and protects....I just don't see what is wrong with it unless you like dealing with someone who is being somewhat dishonest...

Either disclose or don't endorse........ those are our choices!

OCT

Hey Russel, thanks so much for the post. I would not have known about the penalty and basic rules otherwise.

Liz Flint, Century 21 Hardee-Team Realty, Houston & Tomball, TX sales_by_liz@hotmail.com

OCT

I am a little curious about how they are going to monitor this?? I'm sure the government has boatloads of cash to create a new watchdog group!! Are we going to see BLOG AUDITS in the future??!! Thanks for the post!!

OCT

I for one am all for it. I want to hear "users" opinions of products - the marketing companies. I hate to get halfway down a blog when I realize it sounds like a sales pitch - and it is. Blog ads should have a heading the same way magazine ads have the heading "Advertisement" at the top.

Just my opinion...

Julie Duncan, RE/MAX Landmark

Leixngton, MA

Just my opinion...

Julie Duncan, RE/MAX Landmark

Leixngton, MA

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