1. How big is the fake ad problem?
The use of advertising websites designed to look like news websites to sell a variety of fraudulent products is widespread, but we don’t have good data on the exact scope of the problem. These outfits place enticing ads on Internet sites, which then lead to fake news sites, which then link to free trial offers for bogus products. The consumer agrees to a low charge like $4.95 for shipping a one-month free trial offer, but once the marketers have your financial information, they charge you every month for the product even if you never agreed to it.
The FTC has published this infographic to show how the scam works: click here to see it.
2. What action steps has the FTC taken to combat the issue that they want the public to know about?
The FTC has sued dozens of companies and individuals who have deceived consumers by running ads disguised as news reports and investigative journalism about products ranging from weight loss pills to tooth whiteners to muscle builders to face creams. The FTC has shut down these companies and returned tens of millions of dollars to consumers.
3. Now that TARR INC has been shut down, what is the message the FTC wants to send to other unscrupulous online marketers?
Marketers should be aware that the FTC aggressively pursues marketers who lie to consumers about what their products can do. Marketers must have reliable scientific evidence to back up their claims, they must not use fake testimonials or endorsements or disguise their advertising as something other than an ad, and they must not place charges on consumers’ credit cards or debit their bank accounts without clear permission.
4. What is the FTC’s plan to regulate the affiliate marketers/network that are part of the problem?
The FTC is primarily a law enforcement agency and so it has brought many lawsuits against numerous affiliate marketers and affiliate networks that defrauded consumers by peddling unproven health remedies and charging their credit cards without their permission. We will continue to bring court actions and try to get money back for consumers who have been ripped off by these scams.
5. What does the FTC believe the role is of large digital platforms, like Facebook and Google, to vet ads and police advertisers on their sites?
Platforms like Facebook and Google can and do play a role in screening the ads they run to avoid those that have the hallmarks of fraud. Consumers who see these ads should report them to the platforms because it will assist the platforms in monitoring and policing against scams advertising on their sites.