Adteractive Settles FTC Suit, $650k
With no admission of wrong doing Adteractive has agreed to pay a fine of $650,000 and settle with the Federal Trade Commission (FTC) on its investigation of deceptive advertising practices. The online incentive promotional industry has been under scrutiny for potential deceptive advertising practices involving the word “FREE” that may mislead consumers into believing they will receive gifts or prizes without a requirement to purchase.
The FTC has been publicly investigating a number of incentive marketing lead generation companies that include ValueClick. Azoogle recently settled for $1 Million with the Attorney General of Florida, not with the FTC, on matters related to position of advertisements.
An Adteractive internal memo announced the outcome to staff and was quick to point out that it has been working with the FTC since 2006 on new guidelines and had been following those for over a year and is in full compliance. The memo also stated that there is an expectation that there will be further settlements in the future by other companies and these settlements will allow best practices to follow.The settlement ensures Adteractive won’t promote “FREE” products or services without disclosing upfront on the ads and landing pages that consumers must purchase to qualify for the promotions. In addition the methods of displaying the ad message must remain consistent with type, color and placement. As was seen with the Can-Spam act and various adware settlements, the recent flurry of settlements indicate that the FTC has identified the standards and practices that it expects incentive marketers to follow and will potentially allow the current shadow that is hanging over incentive marketing to pass.
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