Firm Fined for Claiming Reviews Legitimate
18 March 2011
The US Federal Trade Commission (FTC) has announced that Legacy Learning Systems Inc and its owner Lester Gabriel Smith have agreed to pay US$250,000 to settle charges that they “deceptively advertised its products through online affiliate marketers who falsely posed as ordinary consumers or independent reviewers”. In exchange for their endorsements, affiliates were given substantial commissions on the sale of products generated by such referrals, which amounted to a total of US$5 million in sales. In addition to the fine, the defendants are required to submit monthly reports “about their top 50 revenue-generating affiliate marketers, and make sure that they are disclosing that they earn commissions for sales and are not misrepresenting themselves as independent users or ordinary consumers”.
FTC’s media release (15 March 2011)