Bogus Diet Patch Company Gets Away By Blaming Affiliates

from the sketchy-sketchy dept

Fri, Apr 1st 2005 6:56pm — Mike Masnick

The FTC has apparently decided to settle with a company that was pitching bogus diet patches online. They gave them a small fine, but it's for much less than the total amount they made off the stuff. There appear to be two claims here: one was that they violated CAN SPAM, and the second was that they violated the FTC Act since the patches didn't actually do anything. However, from the sound of the settlement, it appears that the company tap danced its way out of the spamming charge by pointing out that the FTC couldn't prove they did the spamming, since they had "affiliates" do the spamming for them. It appears the FTC has realized that the company was right. Despite the fact that the company was probably pushing others to do the spamming for it, if they didn't do the actual spamming, should they be held liable for spamming? Of course, there's also the followup. If they know it was the affiliates, then why not go after those affiliates as well? That should scare off some of these spammers from signing up for affiliate programs.

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7 Comments

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dorpus, 1 Apr 2005 @ 7:57pm

The glory of free markets
This is what we wan't, don't we? A free market, and a government that doesn't do much.
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Anonymous Coward, 2 Apr 2005 @ 5:54am

Affiliates == spam
"Our affiliates did it" has become as credible as
"the dog ate my homework". Anyone setting up an
affiliate program on the Internet needs to understand that (a) affiliate programs are spam
magnets and (b) they will be held fully accountable by all spam sent by their affiliates. No excuses,
no whining, no second chances.

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Pete Austin, 4 Apr 2005 @ 2:28am

Double Standards, Anyone?
However, from the sound of the settlement, it appears that the company tap danced its way out of the spamming charge by pointing out that the FTC couldn't prove they did the spamming, since they had "affiliates" do the spamming for them.
techdirt

Yahoo Japan has an online auction service, and just like every online auction service, some scammers use it to pull the old "sell something you don't have" trick. Of course, the people who are fault are the scammers -- but upset scam victims apparently figured they need to look somewhere else to sue, and the obvious choice is Yahoo Japan ... another case where people sue the big company, rather than suing whoever actually broke the law.
techdirt
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- Mike (profile), 4 Apr 2005 @ 2:37am
  
  Re: Double Standards, Anyone?
  Er... sure, pull a quote out of context and make it look like there was a contradiction. If you actually read the full post, I make it clear that the FTC should be going after the affiliates -- which is entirely consistent with the earlier post.
  
  Of course, there's also the other side of this -- which is that many believe that these affiliate programs are set up solely as a shield for spamming, in which case the companies that set them up may be taking on additional liability. They really are spamming themselves, but are setting up an affiliate program to hide that fact.
  
  That's completely different than the yahoo situation, in which some scammers are simply using the yahoo platform in a way it wasn't intended.
  
  So... where's the inconsistency?
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  - Pete Austin, 5 Apr 2005 @ 11:37am
    
    Re: Double Standards, Anyone?
    Hi Mike. Good site. "Double standards" was unfair, so I apologize.
    To spot the (most) guilty party in such cases, look for who organized the crime:
    * In the Yahoo case, it was the fraudsters
    * In the Phoenix Avatar case, we seem to disagree because I'd say Phoenix, so I'll let readers decide.
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Marlene Gibson, 4 Dec 2007 @ 8:27am

Bogus Diet Patch Company
Why is the name of this company not mentioned so that people can konw. I have received a home base opportunity with a patch diet company. I would like to know if this is the company mentioned in this article.
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Phil, 24 Mar 2008 @ 10:49am

Bogus Diet Patch Company
The company name is Phoenix Avatar
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