FTC settles with DVD seller over fake reviews

The company's online affiliates wrote reviews without disclosing a relationship, the FTC says

A company marketing guitar and other instructional DVDs will pay US$250,000 for allegedly fake reviews posted by the company's affiliate marketers, the U.S. Federal Trade Commission said Friday.

Legacy Learning Systems of Nashville, Tennessee, and owner Lester Gabriel Smith advertised the Learn and Master Guitar program through online affiliate marketers who posed as ordinary consumers or independent reviewers, the FTC said in a press release. The affiliates did not clearly disclose the "substantial" commissions they received from the company for every sale they generated, the FTC said.

The failure to disclose the relationship between the reviewers and the company is a violation of FTC rules and is an unfair or deceptive business practice, the FTC said in a complaint. In October 2009, the FTC published guidelines for paid reviews and endorsements that required reviewers and endorsers, including bloggers, to disclose the payments.

Legacy Learning Systems didn't immediately respond to an e-mail and a phone message seeking comment on the FTC settlement.

One affiliate review called Learn and Master Guitar the "undisputed No. 1 training product for someone wanting to learn how to play the guitar," the FTC said in its complaint. Another called it the "best home study DVD course for guitar I have ever seen." Twenty-five affiliates running reviews have led to $5 million in sales of Legacy's products, the complaint said.

In some cases, Legacy's affiliates endorsed the company's instructional courses without any disclosure of their relationship to Legacy, and in other cases, disclosures were accessible "only through inconspicuous hyperlinks," the FTC said in its complaint.

The FTC-approved settlement requires Legacy and Smith to pay $250,000 and maintain a system to review and monitor their affiliate marketers.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentregulationinternetlegale-commerceU.S. Federal Trade CommissionCivil lawsuitsLester Gabriel SmithLegacy Learning Systems

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?