Affiliates can be liable for fraud

An article popped up on LinkedIn about a recent 2nd court of appeals ruling that I thought was interesting.
White Collar Crime.
Back in 2011, the FTC and the state of Connecticut filed suit against a company called LeanSpa and their affiliate marketer called LeadClick. LeanSpa sold various diet products through negative option marketing. LeadClick was the affiliate company they used to help drive traffic and customers to their websites.
LeadClick and their parent company was included in the suit because the FTC alleged that they were aware of and facilitated the false claims made by their affiliates. The case went to court and LeadClick lost. They appealed to the 2nd Circuit court. Last week the 2nd Circuit Court upheld the trial court’s finding of liability for LeadClick.
In its press release for the case, the FTC says:

the court ruled that LeadClick was responsible for the false claims made by affiliate marketers it recruited on behalf of LeanSpa, LLC, a company that sold acai berry and “colon cleanse” weight-loss products. According to the FTC’s complaint, LeanSpa used a “free trial” ploy to enroll consumers into its recurring purchase program that cost $79.99 a month and that was difficult to cancel.
LeadClick’s network lured consumers to LeanSpa’s online store through fake news websites designed to trick consumers into believing that independent news outlets and independent customers, rather than paid advertisers, had reviewed and endorsed LeanSpa’s products.

LeanSpa was owned by Boris Mizhen, and we briefly mentioned this lawsuit back when it was filed
More legal problems for Boris. The FTC’s assertion was that the affiliates were “under the control or influence of” Boris. While it’s taken years, the FTC has prevailed.
A lot of email marketers use affiliates. In my experience a lot of email marketers use affiliates as a way to insulate themselves and their reputation from certain activities, including spamming. This ruling tells us that affiliates are not protection from fraudulent activity. Nor are affiliates protected from the fraudulent activities of their customers.

Related Posts

No, I'm really not Christine

Got this to one of my accounts recently.

Congratulations and welcome to emailinform.

Read More

Facebook scams move to LinkedIn

There’s a fairly common Facebook scam where someone clones an account, then sends out friend requests to friends of that person. This actually happened to a friend over the holiday break. The only problem was that most of the folks who got friend requests were actually security people. Security people who thought it was very, very funny to play along with said scammer.
The scam account didn’t last long, partly because FB security is pretty good and partly because a few of the folks the scammer invited were FB employees. I’m sure, though, that for a brief moment the scammer thought he’d found the motherlode of scam victims.
Today I got a similar scam on LinkedIn. A very bare account with little in the way of information about who this was.
LI_Scam_Profile
I don’t like connecting with these kinds of profile. But, the name does sound vaguely familiar. So I do a little Googling. And I find another LinkedIn profile for the same person, but this profile has a lot more info: A picture, a statement, 500+ connections, all the things one expects from a real person on LinkedIn.
So yes, Facebook scams have rolled over to LinkedIn. Be careful out there, folks. Pay attention to who you’re friending on all social media, not just FB or LinkedIn. Discretion is the better part of valor and all.

Read More

Internet fraud and private whois records

The Verge has a long article about Internet Marketing and how much fraud is perpetrated by people who label themselves Internet Marketers.
It was interesting, but I didn’t think it was necessarily relevant to email marketers until I saw this quote from Roberto Anguizola at the FTC Bureau of Consumer Protection.

Read More