On December 29th President Obama signed into law Senate Bill 3386 the “Restore Online Shoppers’ Confidence Act”. This one really snuck by our industry and it did not show up on my radar until Joe Lilly wrote about it on his blog. If you don’t know Joe Lilly, he is former president of an INC 500 powerhouse in the specialty finance industry and is one of the smartest guys I know in our industry.

Here are the highlights from his post:

  • The bill expressly prohibits data transfer of any consumer financial information for the purpose of billing a 3rd party transaction. For post-transaction upsells, billing information has to be re-collected. Ouch.
  • The bill requires material terms of all negative option offers to be disclosed prior to the collection of consumer billing information.
  • The bill includes references to credit, debit, AND bank account information (meaning that the ACH and check 21 billers in the industry are no longer off the hook.)

Considering most affiliate offers in the re-bill space work off of the model of the, “break even or lose money on the front end because we will make lots of money from pitching our other products, pitching other people’s products, or selling user data” model. This is a HUGE one.

How in the hell is this going to be enforced? Especially for offers outside of the USA. Will they go after affiliate networks pushing these offers?

I assume the goal in this bill was to go after all the Acai Berry, Grant, and Make Money Online negative option re bill offers that have the “FREE, just pay shipping, then we fuck you for the rest of your life and hide behind a bazillion shell companies” model. But who knows.

Think about this for a second. Specifically this part. “ for post-transaction upsells, billing information has to be re-collected”.


Unless I am missing something, virtually everyone selling a product on Clickbank is now a criminal. (besides the non FTC compliance).

Also Amazon, Omaha Steaks, and every other company that tries to upsell me is now breaking the law.

Am I reading all this right? Did 99% of Internet marketers just become criminals, according to information from the Ladan Law firm, P.A.?

Did this just sneak through much like the gambling “Unlawful Internet Gambling Enforcement Act” which didn’t make it illegal to gamble online… It just made the software which allowed you to gamble online illegal… which basically made all online gambling illegal. Costing the USA an estimated 5 trillion dollars in taxable revenue (don’t even get me started on this).

I am hoping I am reading this wrong…. Hopefully Joe and other industry/legal experts will weigh in soon.

Whats your take?

By Jeremy Schoemaker

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of ShoeMoney Media Group, and to date has sold 6 companies and done over 10 million in affiliate revenue. In 2013 Jeremy released his #1 International Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. You can read more about Jeremy on his wikipedia page here.

168 thoughts on “Did 99% Of Our Industry Just Become Criminals”
    1. A bit harsh though I do get where you’re coming from. But not all businesses are out to con customers.

    2. can someone explain the top three concerns is English please? Maybe if someone can describe each clause with an online scenario perhaps we can better understand the pros & cons.

    3. The Obama administration is anti-capitalist. That is why unemployment is HIGH. They use regulations as the “death of a Thousand Cuts” to slow down the Free enterprise system which has provided this country with a high standard of living.

      SO after Us scumbags go out of business.. parasites like you … will no longer have anybody left to employ you. Then you’ll wonder what happened?

      1. Go ahead and blame the Obama administration for the falling economy and ignore the fact that the pieces were all put in place before he got here. Fiat currencies always fail eventually and there’s never been a time that all the worlds currencies are fiat and most of them reliant on the US dollar as it makes it final plunge.

        Free enterprise my #@$%@#^. Free for those ignorant enough to believe taxes are well spent.

    4. This law is a double bill. Meaning cant be passed and wont be. Dont look into the dark see the light wolves run but doesnt dance with sheep.Believe the heart and follow the whispers.

      Sam the Man with a plan to make you understand. Quicksand in my hand but the plan for the man is still at grand. God bless.

  1. My take is , this is what you get when you elect panty-waste Democrats to office and give them control.

    1. what a mess this is starting to turn into.
      I wonder how big companies such as amazon will react to this. It’s a hassle re-entering billing info. This will affect conversions in a huge way.

      1. Most consumers would be willing to put up with the hassle of re-entering billing information for as long as that would ensure the privacy of their data. Requiring third-parties to get the information directly from customers is much better than allowing businesses to pass sensitive data like that without their knowledge or consent.

        1. I completely agree. It’s hard to trust companies that divulge information like that to other online merchants.

    2. Last time I checked this was a two party system and when Republicans don’t want something to pass they do a good job of making sure that doesn’t happen. maybe the internet marketing industry needs to hire better lobbyists or just hire some in the first place. But like anything else in life there are ways around most laws even it it means breaking it or repealing it or getting creative.

    3. I use Amazon.com monthly rebilling for diapers (I have twins and a 2 year old). Does this mean I’m going to have to re-authorize?

      1. No, this would only apply to post-transaction UPSELLS. Meaning when the company wants to increase the amount charged to the card or add more items. Recurring billing for the same product wouldn’t be affected.

  2. The proposed legislation will have a huge impact on many e-commerce websites. It would place new and significant burdens on online merchants involved in post-transaction third-party sales – including both merchants involved in the initial sale and the post-transaction third-party sales.

  3. The problem is the greedy assholes that end up signing up the consumer for like 3-4 different products without the consumer even knowing (thx to their lack of reading) and not having to have them re-enter payment info.

    These things will continue to happen until the shady advertisers die or get thrown in jail/prison. And the good Advertisers in the space will either change to follow the rules or hopefully made their money and moved on. //g

  4. What about sites where you have created personal accounts with payment information stored (Amazon, Omaha, etc)? I would think you are legally giving up your right to that act… seems a bit fuzzy to me

  5. Most of the time politicians don’t have a clue on how Internet works. We will need many years until the laws start being really efficient in this matter. The problem is that many times the reality runs much faster than the congress.

    1. This is because most politicians have never worked a day in the real world in their lives. Much less run a profitable business.

  6. Maybe now is the time for us to get drunk and play Russian roulette while slur-mumbling about the good old days.

    1. It was more fun when things were simpler. I’m optimistic though that this would eventually prove to be a good thing for both online merchants and consumers.

  7. Unbelievable… How do they think they can enforce that! And how about foreign sites, selling their products in the US?

    1. yeah! Foreign Affiliate hosts would not conform to that. One reason is that they don’t know that info.

      I just knew because I’m on shoemoney’s newsletter. Heck they would not even do anything cause they’re outside jursdiction.

      That is why it is called the World Wide Web. The US should not by interfering with the it.

      1. Things change and the best way to move forward is to deal with it. This may look like crap now for some businesses but it could be what the industry needs to gain the trust and loyalty of consumers.

  8. Yeh this just screwed pretty much everyone on Clickbank who has an upsell process.

    Everyday the govt makes it harder and harder for businesses to profit – and they wonder why no one is hiring new workers…

    – Justin

    1. Yea the funny thing is most of the Internet Marketers that are complaining are democrats and voted for regulation like this by voting the democrats in over the last two years. Remember democrat stands for big government, excessive taxing and huge regulation for business. So complain all you want, but most of you voted for this!

      Remember the republicans are pro-business, unlike the fools in Washington the last two years.

      1. Republicrats, Demicans; it doesn’t matter. Or don’t you remember the Trillions with a “T”, that was sucked out of the economy in the last year of ‘the Shrub’?

    2. yeah…its about time you american affiliates collaborated with foreign affiliates like me to upsell your products

      1. Anyhow, it seems clear that this is what the new regulations address.

        I guess the one thing that would suck big time is if it applies to prepop in lead gen, which from my reading of it so far it would seem that it would.

  9. I suggest you read the actual law. It’s only 4 pages! The key words you appear to be missing are “third party”. Amazon upselling you products after you purchase something on Amazon involves no third party; they do not have to recollect your billing information each time. You promoting a Clickbank product then promoting other Clickbank products aslo never involves giving the customer’s billing information to a third party; Clickbank is the first party seller in all of the sales. This bill has nothing to do with any of your e-commerce or affiliate sales unless you were collecting and selling actual billing information.

    1. Great point Dan, I read over the bill quickly after reading this and found that it didn’t include those words. Like many other legal or government documents everything can be how you read it but it doesn’t seem like something that will affect most affiliate marketers because they sell within one company that does the processing. I think this is to go after the shady rebill companies who took one sale and then charged from other shell companies which would be the 3rd party.

    2. If this is the case, then there needs to be more clarity in this thread (which I hope is the case). If if does pertain to direct 3rd party re-bills, then I would presume that it’s up to the 3rd parties to administrate the legalities aka monthly notices to the merchants on whether it can be done “legally” or not. The merchants selling the products should not have to administer this fiasco.

    3. Dan – THANK YOU FOR YOUR CLARITY !!!!!!
      People are nervous in this economy, but let’s not be alarmist!
      And it seems to be so hard for people to stay on topic in blogs.
      So, thanks again for the rational, on-topic reality check.

  10. Well, one thing that may help is that what the definition of a “transaction” is under the new law. There’s a very good chance that the immediate upsells on Clickbank, launches and other IM sites could all be considered part of the same “transaction” for purposes of applying this law.

    If not, then a simple shopping cart adjustment that waits to process the charge from the upsell sequence until all upsells/downsells have been presented should do the trick. Just show the offers, see what the customer elects to purchase, then process one charge for everything at the end of the deal.

    There are lots of issues of enforceability coming up with new tax laws on 1099 and this law as well. What usually happens with these types of laws is that they wait to enforce them until they have someone already in their sites. So, if you get in trouble, then they nail you with all these laws that otherwise never get enforced with anyone else.


  11. I’m trying to be optimistic about this and hoping that when we have the details, it won’t be as bad as it sounds from this recapped information. But when the government (using OUR money) intervenes, it’s usually a very bad thing for all of us. The larger problem is that we MUST get our country back into the hands of the PEOPLE, not of those who have been elected into office only to get there and do an about-face on all of their promises. We’ve long been in the “rise of the fall of the Roman Empire”, and the fall is closer every day.

    1. Sounds like more work for a third party all in all what it requires from businesses seem to be reasonable. It helps if you view this from a customer’s perspective. Knowing that you’re protected by law would make you more confident to enter into transactions.

  12. I’m no legal scholar but I just read the text of the bill and I don’t see anything that says clickbank upsells are illegal. The bill says it is illegal to to conduct ‘post-transaction third party sales’. It is perfectly fine to do post transaction upsells if you are the ‘initial merchant’. So if I’m reading this right means clickbank can upsell other clickbank products as they always have. You just can’t pass billing info to an entirely different merchant without asking the customer to re-enter billing info. BTW…the bill defines a ‘post-transation third party seller’ as someone who is NOT– the initial merchant or a subsidiary or corporate affiliate. I’m not sure if the ‘corporate affiliate’ part covers us or not. Probably not:)

  13. This applies to businesses that pass on the financial data to a 3rd party.

    So upselling your own customers is OK, but it is not OK to send my payment info to another party so they can sell me stuff and bill me. They have to collect the info from me themselves.

    I don’t see anything wrong with this provision. You can’t disclose creit data to third parties, you shouldn’t be able to disclose credit card data to third-parties.

    1. I don’s see anything wrong in requiring businesses to avoid using misleading post-transaction ads, disclose the terms of offers, and to get whatever information they need from customers. It can actually be an advantage since it can inspire customer loyalty.

  14. “for post-transaction upsells, billing information has to be re-collected”

    Am I missing something here? This language is not in the bill and the language of the bill doesn’t mean that the original merchant can’t upsell the consumer, just that they can’t allow a third party to collect any billing info.

    Yes, the FTC is a giant suck bag, but let’s not all get our panties in a wad.

  15. This is scary to say the least. In 5 years time the internet will be a different place. These are the best times online, right now. Look at what is happening with Net Neutrality. That is really scary.

    I just hope that everyone that isn’t a slimeball politician, piece of shit corporate vampire or lawyer, wakes up and we as a whole send them a message and change things for the better.

    Ask mastercard what happens when they piss off web people.

  16. Well as much it mid sucks for some people there needs to be some kind of protection for the customer and lets be honest we all know that scamming, spamming and fucking people over is not necessary the best business practice. At the end it is pretty much along the lines of PCI compliance and some of laws past in Europe, some what forcing us to provide quality products or services without having the option to charge for more products than the customer actually wanted.

    Anyway will be interesting how it pans out, good thing I’m not in US 😀

    Cheers Falko

  17. The way I am reading the law – it’s geared to 3rd party passes.

    Meaning, if I collect data on a sale, and collect CC#’s and billing info, I am not allowed to then sell that to or move that data to a third party – so they can join in the rebill fun without the customer’s consent.

    So, that’s how I see it. The government is trying to protect consumers from getting their private CC#’s put out there to get raped and pillaged by the vendors who hide behind bad phone #s and addresses and rake in sales without customer’s permission by telling their JV partners – “Hey, add this fellow on your rebill too! I told him I would do this in the fine print they never read! So… it’s ok, we have their permission!”

    And I say good on that – if that’s happening, it should stop.

    Nothing to worry about if you sell Clickbank or Amazon type products, as THEY collect the data, and they DO NOT pass it on to third parties to bill more products.

    You won’t have to worry about it if you sell your own products using your own carts, with upsells as you collected the data for YOUR sale and your upsell sequence is YOUR products and you are not passing that data to a 3rd party to do more rebills not included with or disclosed with your offer.

    So, as I read it – biz as usual.

    When I say business as usual I mean, you can still sell self liquidating offers on the front end knowing you’ll make back end residuals on rebills, as you are the FIRST PARTY collection company and you are not passing data on to other companies to add to the rebill party.

    Follow the best guidelines laid out by the Credit Card companies on how to ethically and property mark your carts, and disclosures, and you’ll never have a problem.

    This is not legal advise, only for entertainment purposes only.

    I guess, it’s up to the lawyers now to define what “3rd Party” means.

    If that means Credit card processor, authorizing agent, seller, vendor, host, etc..

    Jeff Mills
    http://freeoutsourcingcd.com – Get your Free CD – and see how I run my funded proposal offer 🙂

  18. I agree with Griffin and from what I read Brandon is right. You just can’t give consumer’s billing information to another seller. Sounds good to me! I’m sick of signing up and paying for something only to have something else snuck in there under the radar that *I* have to jump through a billion hoops to have undone. This industry wouldn’t be killed by a bit more transparency.

    1. I agree. I don’t see anything wrong with requiring third-party to get the information they need directly from customers.

  19. I need to look further into it, i see your point, i am not sure that its a perfect bill, but it is true that people are hesitant to buy online because of these practices, i like the idea that more transparency and shooting straight is required. How many times have i signed up for a service for one month and then i get billed every month, even if i call and request them to stop billing me they bill me for months before i can stop them.

    1. This should encourage unscrupulous marketers to get their act together and avoid using shady tactics to get more money out of people.

  20. Oh, how did I miss this. My former state senator was the sponsor of the freaking thing.

  21. Regardless of the true details, this bill is one more strike against business in America. Both State and Federal Government continue to erode the fabric of innovation and entrepreneurial spirit in this country. Sure there are unscrupulous companies who peddle junk and cheat people and the government needs to target them instead of pounding the ban-hammer down on the rest of us.
    They are really trying to kill innovation, business, and entrepreneurial spirit or drive them over seas. The opportunity is on foreign shores ladies and gentleman NOT here. It will only get worse.

    1. Kind of like the Forex industry now – everyone’s moving their accounts to Europe. Now (it’s my understanding that) THEIR banks (instead of U.S.) banks are making money on the holds of people’s money.

      I seriously doubt any of this will have any effect whatsoever on consumer online shopping confidence. The worst criminals will just find ways around anything anyhow and don’t care about any of this.

  22. Just wondering who the big wig online industry lobbiests are…like the one’s who are working hard for google, ATT and the others for spectrum, net neutrality and the like, No one or big name company comes to mind.

    Anytime the FCC scratches its butt…their somebody big in telecom asking tons of questions.

    Seems like the big online players do a lot of post mortum asking.

  23. Why bother reading the law when you can just panic? The only people affected by this law are scumbags. It doesn’t affect first party transactions or future transactions with that first party. It affects you only if it is your business model to sell the information of your customers to another party that wasn’t involved from the customer point of view so they can start raiding your customers bank account.

    For bonus points lets all leave comments with the same tired cliche tripe about “politicians”. How do people write this crap and not want to choke on how pathetic they come across?

    But what can one expect from a place with a blog that uses the groanworthy “Skills to pay the bills” and feels the need to mention “home grown in blah blah”. It’s the Internet, who cares?

  24. Like every other bill the government institutes, the collateral damage is far reaching. The credit card reform bill was supposed to “protect” consumers, instead the banks just raised interest on the people that pay on time.

    Thank you again for the regulation…maybe they can come up with a bill to regulate the lawmakers from making laws.

    Also, if you think Guam might tip into the ocean, your seat in congress should be immediately revoked.

    1. Sadly, this will affect about nothing. 99.9999999% of the companies still doing negative option are offshore in countries where the law will mean less than a bowl of rice. The USA has zero power over any of those. This will affect male enhancement, neutraceuticals, get rich quick and porn people like, oh about, ZERO, as all of those types of companies are offshore, along with their owners. Another airless law that only helps push more money out of the USA to places where entrepreneurs can rape and pillage as they like.

  25. Brandon is right — if a company wants to bring ANOTHER merchant into the mix, AFTER the transaction has been concluded, it can’t just send my info to them, I have to send it myself.

    Amazon is just fine.

    The question I have is, how does this affect virtual currencies and systems where I pay money to the initial merchant and they turn around and pay someone else (such as PayPal)?

  26. I hate being negative. However, I wouldn’t be surprised if this non-sense were true. Politicians wonder why the unemployment rate is so high – then, make it as difficult as possble for business and commerce to operate. I consider hiring once in a while and then realize the immense hassle with work comp, taxes, IRS in your shorts, etc.- Hiring never seems like a profitable solution and outsourcing to PH – don’t even get me started – never wasted so much time and money. The B movie I watched recently called Idiocracy – sadly, is probably not too far off.

  27. OK, maybe I won’t see you all in court. What this bill prohibits is when you buy something and you need to “uncheck” a box that authorizes the purchase of additional items. We have all seen these types of offers and many, including myself, have been victimized.

    For example, you purchase a “widget” from ABC Company and, when you go to check out, there are “authorizations,” sometimes in very inconspicuous places on the order form, that charge your account for additional products or services. This bill puts the burden on the merchant selling the original “widget” (which the consumer wanted to purchase) to disclose these additional product/service sales.

    I don’t think this would affect most affiliate marketers selling things on Clickbank, CJ, Share a Sale, etc. unless you are “hiding” additional purchases on the order form.

    It would also curb abuses regarding recurring charges that are inconspicuously placed in order forms. Companies like “FreeCreditReport.com” who purport to provide a “one time” charge, then end up whacking your credit card for monthly recurring charges would need to tighten up their disclosures.

    Companies like GoDaddy and Vistaprint (both of which I am affiliated with and have purchased from) who have many opt in/out screens prior to the final checkout will probably need to make their checkout process less confusing too.

    The typical affiliate marketer who is selling an ebook shouldn’t be affected. Even if you are just passing a hop to a site where the consumer makes the purchase (a la a typical Commission junction type product purchase), the burden would fall on the merchant the hoplink lands on since they are the party conducting the financial transaction. You would run into trouble if you: A. shared the purchaser’s credit card info with another party, or B. put weasely recurring charges or additional purchases onto the original transaction.

    I think this is a good thing. It will curb the scumbaggish marketers’ attempts to rip off consumers. If you’re a scumbag, beware! If you run a straightforward business, you have nothing to worry about- this will actually help the honest marketer in the long run.

    I am not a big fan of government intervention into business practices, but this bill appears to go after the bad guys. I like it when the bad guys lose!

    Whoever said this post was alarmist was spot on.

    Read the bill here, it’s pretty straightforward: http://thomas.loc.gov/cgi-bin/query/D?c111:5:./temp/~c111nFFlaM::

    1. Good point. The way I see it, this could present inconveniences especially when you’re a third-party since you have to get the financial data from the consumers instead of from the merchant you’re dealing with. But given time this could prove to be a win-win for everyone since it may just accomplish what it’s intended to do, i.e. “restore online shoppers’ confidence”.

      1. It will probably take a while before it manages to do that. But this could be a good start. Judging from the amount of complaints online shoppers have it seemed like inevitable that a law like this would be passed.

  28. I think this signals a way bigger issue about to get stuck up our asses – privacy. The industry needs a solution before it gets forced on us a screws up everything. BTW – thanks for voting democrat.

  29. 1) The bill prohibits upsells by: “post-transaction third party seller” that the bill defines as: NOT the initial merchant

    2) About free trials: This bill requires merchants to: a) CLEARLY disclosing terms. (which makes complete sense) b) obtain consumer consent before charging them money (make sense also) and c) provides simple mechanisms for a consumer to stop recurring charges account (makes even more sense).

    After reading the bill, to me, it seems that if a merchant CLEARLY explains what a free trial REALLY is and asks for consent of future charges before the initial charge, there´s no problem at all.

    So after this….yes, free trials like acai berry, teath whitening and similar offers ARE illegal because they DO NOT CLEARLY explain future charges, and do not ask for consent before making those charges, but for example take a look at some free trial offers at clickbank and you will see they DO IN FACT clearly mention how the free trial will work and clearly ask for consent before asking or billing info. So I think there´s no problems for them.

    1. Sounds good to me. I’m not just an affiliate but a consumer as well. I think this law only aims to protect not just consumers but businesses who don’t resort to shady dealings as well.

  30. I went and read the bill and this is definitely something that I would have voted for. It seems to me that you didn’t read the actual bill, but passed judgment by reading another blogger’s interpretation. I was going to come on here and say so, but I see many have beaten me to it.

    I am sick of ordering something from Cabela’s only to have an annoying pop-up to join a travel club or something of that nature. We will still get the pop-ups, but we (as well as the unsuspecting population) will now be told that we are being directed to another company and if we like their offer, we will have to enter our credit card information again.

    Hey, your subject line got my attention, which was great!

    I’m relieved to find out that I am not a criminal after all 🙂

    1. I think the idea is to prevent shady companies from milking more money out of hapless customers. This gives people the right to expect businesses they’re dealing with to disclose the terms of their offers. That way the customers know what they’re getting into once they sign-up.

      1. I for one would like to buy what I need without having to go through the usual upsells and third-party offers.

      2. But doesn’t that limit marketers’ ability to increase their sells through various offers?

  31. Why bother taking the 5 minutes to read the four page law?

    You can even skip the first and last pages if you’d like to shave it down to 2 minutes.

    Instead I’d like to remind everyone I’m a unique snowflake who treats political parties like sports teams.

    1. Maybe the post was designed to be intentially misleading and “fud filled” (as someone mentioned earlier) as a sneaky form a linkbati. 😉

  32. Why bother taking the 5 minutes to read the four page law?

    You can even skip the first and last pages if you’d like to shave it down to 2 minutes.

    Instead I’d like to remind everyone I’m a unique snowflake who treats political parties like sports teams.

  33. Seriously, this comes down to the fact that politicians have never worked a day in the real world in their lives. Hopefully, they will wake up and realize that there are legitimate business models out there that involve rebills. It is not all acai berries.

    1. And just look how “great” they are with their own money:

      “A new study of such records for the years 2004 through 2008 by a pair of academic researchers makes two remarkable findings. First, Congress members disproportionately invested in local companies and companies that contributed to their campaigns, and when they bought shares of home-district companies they beat the market by an average of 4.5% a year. Second, even with this advantage, returns for their entire portfolios stunk, with the average portfolio trailing the market by 2% to 3% a year.

      Read more: Congress Picks Bad Stocks — Even With a Leg Up – SmartMoney.com http://www.smartmoney.com/investing/stocks/with-a-leg-up-congress-still-picks-bad-stocks-1293137112568/#ixzz1A0aKD1yV

  34. I find it odd that we are just now talking about this. I hadn’t heard a thing about this, but I hope enough people get pissed and change it. It seems a bit much.

    1. It seems to have slipped the marketers’ collective radar. The people who lobbied for this must be really good.

  35. WOW,,, I have to agree with you. WTF… Hopefully they won’t be touching us Clickbank Affiliates.

  36. The Jeff Mills post is accurate. This is an alarmist post…the text of the law is to go after two very specific things:
    1) card-on-file phone rooms where the products upsold are not the products of the merchant providing the original transaction
    2) 3rd party upsells (like the post-checkout savings clubs where cardholder data is passed from one merchant to another).

    It is relevant, however, that this act DOES mention some additional guidelines for all negative option marketers requiring negative option merchants to:

    (1) provides text that clearly and conspicuously discloses
    all material terms of the transaction before obtaining the consumer’s billing information;
    (2) obtains a consumer’s express informed consent before
    charging the consumer’s credit card, debit card, bank account,
    or other financial account for products or services through
    such transaction; and
    (3) provides simple mechanisms for a consumer to stop
    recurring charges from being placed on the consumer’s credit
    card, debit card, bank account, or other financial account.

    Basically as a publisher it means you should avoid negative option offers that do not meet the criteria above or else!

    1. Sounds reasonable enough to me. It’s not something that requires much from any business to do, right?

      1. For one thing it wouldn’t be easy for third-party to access information anymore. It would be hard to market products or services if you don’t have the information you need to advertise offers to a target market.

  37. Look Jeremy,

    Obamacare comes to the interwebz. Zactly what were you expecting from Washington? Roses?



    1. How is this like the Health Care Reform Act?

      Cite something – a web page, the Congressional Register, anything well reasoned and fact-based.

      Otherwise, I’ll be glad the congress passed law designed to knee-cap scammers.

  38. From consumers’ perspective this could be a good thing since it requires third-party Internet sellers to obtain financial information directly from them before they can charge for products or services. It’s a good step towards protecting sensitive information that you don’t want passed around without your consent.

    1. Good point. I always treat clients’ personal data as critical information, something that must not be shared to anyone for whatever reason. I would expect the same courtesy from companies that I have dealings with.

      1. It’s something that should be a given to any business transaction. Protecting people’s critical data should be part of any business model. Besides, it’s a sure way of inspiring confidence and loyalty.

      2. Well, if your dealings inspire things the opposite way then you’ll have something to worry about this new Act.

  39. You have to admit though that there are unscrupulous businesses that probably prompted consumers to lobby for this. This may or may not have a significant impact on legit businesses but it’s something that we all have to find out soon enough. I think though that as long as a business doesn’t use any “offers” as a smokescreen to deceive people to spend more then there’s nothing to worry about S. 3386.

    1. It’s just unfortunate that certain practices employed by unscrupulous businesses erode consumer confidence so much that a law like this has to be passed.

  40. We know some people don’t read all the text when they buy something, but enter the data info everytime when someone buy something is annoying in this computer era.

    1. Well, that’s the problem with online shoppers. They think that obtaining goods through the web is just point and click rather than checking out the products carefully before announcing their intent for purchase. Savvy, meticulous shopping — whether online or off — is still the winner in my book.

  41. Well, this should hopefully put an end to mystery charges that are giving consumers so much grief. It’s up to the marketers to use their creativity on how to make the fine print appealing so that consumers would be enticed to buy.

    1. I totally agree. I believe this will scare the wits out of those con artists who almost always bombard my inbox with Viagra and Cialis “alternatives.” Oh, throw in those eyebrow-raising diet pills, too, and we’re definitely good to go.

      1. Those emails will never go away, unless Russia and the other countries who don’t have laws against spam, make it illegal (which will probably never happen).

  42. Some people compound the problem beyond not reading the fine print in the first place. They’re putting all the blame on businesses while they don’t pay attention to the details and to their credit card statements. I wonder how this law would solve that.

  43. I usually avoid doing business with companies that don’t offer much information on their offers. I think that it’s every consumer’s call to protect himself/herself from shady deals.

    1. I think this is just scary if you’re a web marketer who’s engaged in shady deals. If what you’re doing is legitimate, then why worry? 😛

      1. Yeah. This could actually be a good thing for legit businesses since it would remove unscrupulous businesses from the competition.

  44. It would take certain adjustments on the part of merchants that have to deal with post-transaction third-party sales. But I don’t see how it would greatly affect the way any company does its business unless of course it makes a habit of hiding certain information to their customers.

    1. I think the part where it says “the amount of the charge and a description of the goods and services for which the consumer will be charged” should be highlighted fully definitely deserves a thumbs up. What do you think, Shoe?

    2. “Put I don’t see how it would greatly affect the way any company does its business unless of course it makes a habit of hiding certain information to their customers.”

      That’s the ENTIRE point actually. If you look at the companies listed on the TechCrunch wall of shame they are MAJOR companies, including:

      Orbitz and at least 100 other MAJOR companies.

  45. Increasing sales and revenues is of course the main goal for any marketing strategy. There’s nothing basically wrong with that as long as consumers are made aware of what they’re in for once they opt for the offers. I think deliberately misleading customers is not a great way to promote your business. Honest dealings may not often get the revenues you are aiming for but you’d most likely build a more solid relationship with your customers that way.

    1. The point here is you only have to worry if you’re operating illegally or inserting bits and pieces of hidden charges here and there.

  46. I don’t think 99% in the industry resort to tactics that this law is trying to prohibit. Besides, given marketers’ knack for marketing their products and services this won’t pose much of a problem in the long run.

  47. It’s the first time I’ve heard of this. I hope it doesn’t put businesses at the losing end of the deal.

    1. It will likely mostly only really have an impact on smaller businesses. Most larger businesses factor fines, penalties, etc. into their risk analysis of their business plans, marketing campaigns, revenue models, etc. as a recent bnet article noted:

      “There are plenty of examples of big companies (with enough scientists and lawyers to know better) that have been caught by the FTC making misleading health claims about their products: Nestle, POM Wonderful, Bayer, Rexall Sundown and Extenze. But none of the settlements have recovered more than a few million dollars from each company. That suggests the food business may have learned what the drug business already knows: That settlements tend to be much smaller than the revenues you can earn from false advertising, and that FTC action is therefore not a deterrent to misleading consumers. Rather, settlements with the feds can simply be built in to the revenue model, a cost of doing business.”

      However, it’s well known that firms with fewer than 500 employees — drive the U.S. economy by providing jobs for more than half of the nation’s private workforce.

      So a side effect of the way a law like this is constructed is that it likely will end up being MORE damaging to the economy.

      I don’t know what the answer is. Certainly the regulation makes sense in many ways, but the implementation and timing seems especially poor.

      1. Did you know that the proposed legislation was based in part on the Commerce Committee’s 2009 report that focused on three direct marketing companies: Affinion, Vertrue, and Webloyalty? The report found that the three companies partnered with hundreds of legitimate websites that shared their customers’ billing information, including credit card numbers, with the result that consumers were charged for membership clubs and services that they did not want and were unaware that they had purchased.

        1. Yep. I did know that. I posted the TechCrunch link previously (Post Transaction Processing Wall of Shame) and I posted it at my own site back in 2009. And that’s kind of what I’m saying. I would be stunned if the mainstream companies stop doing business this way.

          Michael Webster of bizop.ca stated on my site that much of this goes as far back as the Cendrant fraud, although I never did dig into it much to verify what he said.

    2. The act basically introduces new regulations for two broad categories of marketing practices: post-transaction third-party sales and negative option sales.

      1. I think some of you are just overreacting. I honestly believe this will make Internet marketing way better for all of us.

  48. As I see it, the Restore Online Shoppers’ Confidence Act targets two e-commerce problems. One problem is sending consumer card data to third parties after the sale, for the purpose of an additional sale from another company, typically for a recurring billing item. The second issue addresses opting out of recurring billing purchases made online. Got anything to add here, Jeremy?

    1. Meaning: The seller enables the purchaser to stop recurring charges from being made to the purchaser’s credit card, debit card, bank account, or other financial account through a simple process that is available via (A) the Internet and (B) telephone.

  49. I think the bulk of the Act involves mandating web commerce movers to display as much useful information about their products online for the benefit of their customers to make the potential sale as beneficial to both parties as much as possible. No sweat.

    1. Which, by the way, is the essence of sales and marketing. Agree with me on this one, Shoe?

  50. Some form of this legislation is likely to be approved and merchants should prepare for it. Just saying.

    1. The section that requires companies that use “negative options” on the Internet to meet certain minimum disclosure and enrollment requirements, so consumers will not end up paying recurring fees for goods and services they did not intend to purchase is the bulk of it though.

    1. Even if the sharing of personal information is for purposes of post-transaction third-party sales is adequately disclosed in the initial merchants’ privacy policies, these new regulations would still apply. Anything to add here?

  51. I guess the part prohibiting Internet retailers and other commercial websites from transferring a consumer’s billing information, including credit and debit card numbers, to post-transaction third-party sellers takes the cake.

    1. That’s my favorite part as well. I love how transparency is highlighted here unlike the current presidential administration.

  52. After skimming through the bill it doesn’t seem as bad as the post claims. Really now, who wants their CC information passed on to anther merchant without you knowing. That’s just bad business unless your goal is one transaction and done with your client that you worked hard to get.

  53. Whatever happened to Lisa Barone and her superb posts? I’d love to see more of her appearing on your blog.

  54. Just one of things getting changed for the better in the wonderful world called web marketing, Jeremy.

  55. It happens. And hurts the little guy. Look at prohibition. People still drink? And the big corps get the revenue. It is the feds extending there hand into a proven revenue model that has a flaw. And they have precedence. It will fix a few things for rebills. But bottom line for web whiners. It still boils down for the potential buyer to educate themselves. Because as more gov gets intrusive other scams will effect legitimate affiliates. And the gold will sink to the bottom and the other stuff will float on the top. Stay alert. And be informed. Those of you who stay in the game will be able to weather this through. Although their has to be a devil in the details. And it will hurt a industry more than help if people are not careful.

  56. Its seems to me that everyone who is serious about learning how to blog effectively should learn the lesson that’s being taught here.

    Is the title of the post catchy, did it grab your attention? You bet it did. I would venture a guess and say that over 75% of those that read the title stopped what they were doing and read the entire post.

    Is the the post alarmist in nature? Definitely! Is there anything unethical in presenting the info in this manner? Not at all. Outside of sex, there is no better marketing ploy than fear/conspiracy theory.

    What this post did do was to cause its readers to become better informed. I know I read almost every reply, researched the bill in question, even clicked on the links submitted by the responders. I walked away better informed concerning 3rd party marketing strategies and post transaction upsells.

    Does this not constitute good, quality content, something we as affiliate marketers are all taught from day one concerning our own blogs or websites?

    Well done Shoemoney.

  57. Don’t worry, Amazon is safe (bill probably has “if you donate $$$ to Obama, you’re safe” in a fine print), regular IM marketers could be sued anytime though. I don’t say they will, but if somebody will decide to f*ck you, they will have a legal weapon to do it.

    Just like anything else in your America now: have a toy gun — you’re terrorist, eating organic — you have a Healthy Eating Disorder, filming police — get beaten and go to jail. The point is to make anybody breaking some kind of law, so if required anybody could be prosecuted.

  58. It is my considered opinion that Obama – whose American birth is very suspect! – is an immoral, stupid, cretinous moron. Bringing in bills that screw the commercial heart of America but, what is worse, introducing the ‘Gays allowed into the armed forces act’ which is physically unnatural for the anus was designed for excretion, not penetration – as is the vagina, and it is an abomination in the eyes of the Lord (remember Sodom?). The man is totally unfit to rule over a mighty nation!

  59. Hi Jeremy.

    Re the Unlawful Internet Gaming Enforcement Act.

    You said the law didn’t outlaw gambling but the software that enables gambling was made illegal.

    I am afraid you’re partly right and partly wrong. 🙂

    The UIGEA was brought tacked onto the back of a post 9/11 security bill, the Safe Ports Act, which was never going to be voted down. UIEGA didn’t define, change or clarify what was legal or illegal gambling (as some gambling is perfectly legal in the US, for example betting on horse racing in some states) but did make it an offence for banking institutions to move money about that was related to unlawful internet gambling.

    It was because of this lack of clarity that many of the large publicly traded businesses pulled out of the US marketplace within days and also the lack of clarity that has so far meant no prosecutions for the businesses that stayed in the US.

    Times, they are a changing though, with various state level legislation progressing (New Jersey for one) running a race for the tax dollars with federal legislation (E.G. Harry Reid)

    It’s an interesting time, that’s for sure!


  60. Internet marketers often talk about all the money they wasted on useless info products and that 99% of the “products” sold on the internet are worthless trash.
    Internet marketing seems to be about getting peoples money any way you can.
    Blind, false, and misleading advertising seems to be normal to internet marketer.
    Claiming there is a limited number of copies of some ebook or a time limit to buy
    is another form of deception used by internet marketers. Trying to make people
    believe you are an expert on something about when you really aren’t is another
    method they use for scamming. Offering something for “FREE” when the ultimate
    goal is to get their credit card number and bill the card multiple times is another scam.
    Thats what memberships sights do. There is no intent to provide a useful product
    or service but only to get the credit card #. I think you have to have a sociopathic
    personality to succeed in internet marketing. A small percentage of internet marketers
    are legitamate but most contribute nothing of any value to society.

  61. Well, what’s behind it all? It starts out as something evil, somebody finds out how these “criminals” are making money – makes a complaint, and the next thing you know, a politician who actually could not care one way or the other, takes it, runs with it to claim all sorts of fame and fortune(and they will) and then only to find out, that those people on whose backs this whole operation ran on, will end up paying for it. So the next time, when you see someone doing something they should not be doing(in a business process) think twice before you leap at it, and see what happens down the line. The psychology of this whole thing is the same as any other mass hysteria, people react to “injustice” without thinking, and after the “justice” has been delivered, to their surprise they’ll find out that in the end, it is them who got the short end of the stick. (witness CC companies, and their “protection” scheme, just as an example, in fact there are many others, far more devastating than that, but you get the idea)

  62. for 10 yrs trying to make money online i found 99% of online buisness is selling nothing ,but i do find in every case you join affiliates and you give them money then your buisness is? finding another sucker to do the same .i find thoughs whom makle money online are low lifes , and work on deciptive ,decieving , lieing ,hype and are criminals ,i cant do that steel from another and not be affected by my actions , but these successfull buisness opporators are basicly failures ,

  63. I agree with what some people said. It’s not a bad thing at all. It will actually help because not only will shady companies not be able to pull this stunt anymore, but customers can’t turn around & say some company screwed them if said company collected their info twice.

  64. first what i want say is I’m not going to refuse what the leader of the universe said if his point tangible and rational.since the customer are not against with business why bodies influence our regulated market system.sooooooooooo mrs prsd take away such rigid that hinders the income of peoples of the world.

  65. I spoke with lawyer involved who is involved with internet tracking – he told me that for companies like Amazon, once consumers give permission then they can be tracked. Whether this extends to our industry I’m not sure. Basically, it will come down to acceptance of cookies – like “you can’t see this site unless you accept our cookies”.

    As far as this being a republican/democratic thing – I don’t see it – it was a non-partisan thing (ie. basically a consumer protection) that flew under the radar. Our industry unfortunately didn’t mount a counter-attack and that sucks.

  66. Now this is a mind blower. I had to stop and think which site I was going to put up that DID NOT have a OTO. 🙂 . Just kidding. I’m 1 year new to the internet seen and was just starting to take a good hold of the whole OTO, downsell, sidsell and all the rest. I just got to say that this government can not and SHOULD NOT regulate via law the responsibility of American citizens. They sure do know how to kill an industry. I’ll leave you with this….. I saw a bumper sticker the other day that said “Do not underestimate the power of dumb people in large groups” Who do you think that sticker was referring too?
    Until we figure this thing out… observe, assess, adjust and move forward.
    Keep Going,

  67. Outregious Thats wat this is…. They need to Style up Act coz that bill will but most of us outta business. Thousands of will be put to poverty not mensioning the financial devastation.. Am in kenya but it will Affect us even worse….

  68. Ugghhh…..

    I wish Congress would do something useful for us for a change like shutting down all the pirate and torrent sites that are siphoning off sales of US content creators. Now that would be helpful! And, since we all just might make a teensy bit more money then it might actually increase tax revenue.

    Now there’s and idea! Do something that helps American business and helps fix the budget deficit too.

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