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  1. #1
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Mansfield, TX
    What Preventative Measures Should Affiliates Take?
    Okay, if nobody else is going to ask a question, I'll start...

    I'm sure you've seen many affiliates and merchants run into legal issues that could have been avoided if they would have done specific things in advance (or avoided specific things?). So....

    For Affiliates

    What specific things would you recommend that they do?

    What specific things would you recommend that they avoid?

    For Merchants

    What specific things would you recommend that they do?

    What specific things would you recommend that they avoid?

  2. #2
    Full Member Jim Guinn's Avatar
    Join Date
    January 21st, 2007
    Bartonsville, Pennsylvania
    It goes without saying, whether you are an affiliate or merchant, don't spam. Or, maybe it doesn't go without saying since so many do it.


  3. #3
    Join Date
    April 23rd, 2008
    Washington, DC
    For Affiliates

    What specific things would you recommend that they do?

    1) Read your terms and conditions with the merchant or offer provider. You'd be surprised how many affiliates simply accept T&Cs and never look back. Pay particular attention to payment terms (e.g. invoicing required, net 15 vs. net 60 payments, etc.)

    2) Negotiate better terms. If you're not happy with payment terms, many offer providers are willing to negotiate in order to keep your business. Accepting boilerplate T&Cs at the initial point of the relationships doesn't set anything in stone and amendments to your agreement should be a frequent strategy if you're bringing volume to their advertisements.

    3) Steer clear of restrictive relationships. Pay attention to any clauses that seek to limit the business you can do with other competing advertisers. For the most part, a good negotiation strategy would be to offer a "right of first refusal" which gives the advertiser the best first shot at matching a competing bid for your business.

    4) Follow Advertiser and Offer Provider instructions/rules. Be aware that most T&Cs with Advertisers and offer providers are structured so that you are merely a contractor and may be release on an at-will basis. This puts an extreme amount of power in the hands of the advertiser and offer provider. Considering a violation of their terms is at first glance determined by them, you should always double check whether protections (i.e. suppression lists, required subject lines, particular ad copy, etc.) are a part of that advertisement. Keep in mind, violations of these instructions enable advertisers and offer providers (again, speaking generally) to drop you from their program.

    For Merchants

    What specific things would you recommend that they do?

    1) Be vigilant with affiliates. Many times, the advertiser or offer provider is ultimately on the hook if the affiliate messes up - despite your best warnings. If an affiliate is behaving illegally, promptly get rid of them. Enabling your worst affiliates to blur the line between what is acceptable and not acceptable is a bad idea simply because examples of your worst affiliates may be copied by other affiliates who see your lack of enforcement as implicit approval.

    2) Stay up on the relevant laws affecting your industry. If you're in the US, I strongly recommend reading up on the Florida Attorney General - Mitch McCollum who is leading a major charge against previously very popular ringtone affiliate programs (where affiliates, offer providers and advertisers may all potentially be liable), cash advance programs, and other areas. Also, stay abreast of the latest FTC news. If you're doing business abroad, the EU will be coming out with anti-misleading and deceptive advertisement laws that may significantly affect the industry.

    3) Structure your contract to best suit your needs. For example, if you're a small affiliate network keep payment terms long (ex. Net 60) or at least require invoicing which tends to push affiliate payments back due to laziness on the affiliate's part. In general, remember that advertisers and offer providers are usually in the power position (at least at first) so structuring an agreement in your favor will likely not be a problem.

    4) Renegotiate with top advertisers. If you're doing great volume for an advertisers press them on a) getting quicker payment terms, b) higher payouts, and c) more favorable access to new offers. Initial contracts can always be amended, and should be viewed more as formalizing a constantly evolving relationship, not setting terms in stone.

    5) Lastly, provide easy and consistent access to best trade practices. This can be in the form of a link on your main page, and is invaluable for most affiliates who simply need guidance on what generally acceptable business practices are for affiliate marketing.


  4. #4
    Join Date
    March 25th, 2008
    Legal Question on New York State Tax Law
    I have a question for the internet attorney regarding the new law in New York State. Am I correct in assuming that as an affiliate based in New York state all sales made through my site (no matter where the sale originated from) will require the merchant to collect New York State sales tax on that order? We market on the "world wide web" and do not geo target any area, other than US & Canada on Yahoo & Google. This could be doomsday for New York affiliates out there. Would love to hear from any as the word seems to be spreading that the merchants are going to start dropping any affiliates based in New York.
    Last edited by smallaff; May 2nd, 2008 at 11:18 AM. Reason: put title on

  5. #5
    Join Date
    February 10th, 2009
    Slight correction IA...

    Florida Attorney General, *Bill* McCollum.

    He's a very activist AG down here in Florida, constantly lobbying the legislature and courting the media to stiffen consumer laws pursue more civil and criminal prosecutions.

  6. #6
    Affiliate Manager Matt McWilliams's Avatar
    Join Date
    July 21st, 2006
    Fort Wayne, IN
    Having been on both sides, I have wished I took preventative measures more than once both ways. I have had to terminate affiliate relationships without payment and felt bad, because they DID do something wrong, but I honestly felt they did not know.

    What measures should you take IMHO?


    1. Read the Terms carefully and PRINT them and date them if possible. Scammy merchants will change the terms on the site and then you are bound to them legally if you have no proof they changed them. If possible get a signed and printed copy of them from the merchant. We did this for anyone that asked.

    2. This is a precaution if you are fearful that the merchant might not pay or will do anything else shady. Start in the last week of the month and ask for direct deposit payment. This way you don't have a full month invested in the program with no payment. If they are a proven legit company, don't worry about this.

    3. Get a feel for the Affiliate Manager. Does he seem trustworthy? Does he make promises you know he cannot keep? Does he claim outrageous conversions or revenue shares? Does he share other affiliates' information with you? (this means he will share YOUR information with others!) BIG RED FLAG!.
    Talk to him, email him, etc. Also, test his quickness and accuracy in replying. Feel him out about things you DO know (such as AdWords) to test his knowledge.

    4. A simple one - do research on the merchant on ABestWeb, Google, and the Better Business Bureau. What do other affiliates have to say? (Warning: Don't just take one person's word for it and don't look for a whole lot of people to say "I love this program" but do look for any hints that it may be a scam).
    See if there are any customer complaints too. If they treat their customers like crap, who is to say they are going to treat you any better? And, do you REALLY want to represent a company that treats people like crap?

    For Merchants

    Admittedly this is biased towards lead generation, which is ripe with fraud.

    1. Check out the affiliate web site. Seems simple enough, but what kind of feeling do you get? Does it look like a scam? (i.e. they are going to fill out leads themselves)

    2. Get good tracking information (IP, Browser, Time start, Time End, etc. etc.) that you can use to track their first few transactions (leads or otherwise). Use this to spot bogus affiliates quickly.

    3. Monitor their first 10-20 leads CLOSELY! Call them, email them, do whatever it takes to find the bogus ones.

    4. Read your terms and conditions closely about 100 times. Have a few friends (and other affiliate managers or affiliates) review them. Make sure that NOTHING is left out or in there that should not be. Have an attorney review them and rewrite them, and then repeat the procedure again. MAKE ABSOLUTE SURE that your terms and conditions are solid.

    5. On all legal matters ( see #2 from internetattorney) consult an attorney.

    6. Keep in touch with your affiliates. Yeah, this is a pretty good idea for more than just this reason, but if there are small problems with affiliates (a few bad leads here and there) contact them! Let them know there are some small problems before it becomes a BIG problem!

    Matt McWilliams
    Call Me At: (317) 825-8826 | Follow Me On Twitter: @MattMcWilliams2 | Connect With Me On LinkedIn

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