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The Lost Fountain
by Glen Emerson Morris
Copyright © 1994 - 2009 by Glen Emerson Morris
All Rights Reserved
An October 2009 FTC
ruling now makes it against the law to endorse a product or service
on the Internet for payment without revealing that it was a paid
endorsement. To quote the FTC, “Under the revised Guides, advertisements
that feature a consumer and convey his or her experience with a
product or service as typical when that is not the case will be
required to clearly disclose the results that consumers can generally
expect. In contrast to the 1980 version of the Guides – which allowed
advertisers to describe unusual results in a testimonial as long
as they included a disclaimer such as “results not typical” – the
revised Guides no longer contain this safe harbor.”
Guides also add new examples to illustrate the long standing principle
that “material connections” (sometimes payments or free products)
between advertisers and endorsers – connections that consumers would
not expect – must be disclosed. These examples address what constitutes
an endorsement when the message is conveyed by bloggers or other
“word-of-mouth” marketers. The revised Guides specify that while
decisions will be reached on a case-by-case basis, the post of a
blogger who receives cash or in-kind payment to review a product
is considered an endorsement. Thus, bloggers who make an endorsement
must disclose the material connections they share with the seller
of the product or service. Likewise, if a company refers in an advertisement
to the findings of a research organization that conducted research
sponsored by the company, the advertisement must disclose the connection
between the advertiser and the research organization. And a paid
endorsement – like any other advertisement – is deceptive if it
makes false or misleading claims.”
It’s not surprising
that we need a law like this. America has a credibility crisis.
On the international level, American science is increasingly seen
as “for sale” to the highest bidder. At the national level we have
a “government by lobbyist” system with politicians basing critical
decisions largely on the basis of information supplied by special
interests. It allows politicians to say they made decisions on the
best data available (though not necessarily the most objective or
truthful information). The more political the information is the
more likely it is to be cooked. Sadly, much scientific and economic
research is funded in order to back up some political policy long
on promise, and short on fact. Scientists and other researchers
are essentially paid take an end result and backfill the facts to
make it plausible. Unfortunately, it’s not that hard.
Some time ago the
Greeks noticed that a good orator could make almost any argument
sound plausible if they were good enough. Living proof of this happened
on the October 8, 2009 episode of the NPR Diane Rehm show (available
online at www.npr.org). A bank industry representative was on the
show defending bank policies of clearing the highest value debit
card charges first to maximize the number of charges that might
bounce, thus generating the most revenue from overdraft charges
(in 2008 banks collected 28 billion in overdraft charges). She said
most customers wanted banks to clear the highest value charges first
because the higher charges tended to be the most important payments
to customers. “No one wants their mortgage payment to bounce,” she
said. “But who pays their mortgage payment with a debit card?” a
panelist asked. Well, they wouldn’t want their power or phone bill
to bounce she said. Still it’s hard to imagine someone being happy
about paying multiple $35 dollar charges each for a bunch of
99 cent iTunes because the bank ran a charge for a $10 pizza first.
One might think that
the customer who bounced the checks held the responsibility for
overdrawing their account. After all, all they had to do was go
online, or to their nearest bank’s ATM, and query their account
balance. I mean we can trust the bank to tell us how much is in
our account, right? Well not quite. Recently Wells Fargo was hit
with a class action lawsuit for the practice of re-crediting charges
after the charges had initially cleared, and after some period,
deducting them again. According to the lawsuit, many people were
misled into believing they had more in their account than they actually
did, and were hit with overdraft charges as a result. Wells Fargo
has denied any wrongdoing in the practice, stressing that ultimately
it’s the responsibility of the customer to know how much is in their
The credibility problem
with salespeople is even worse, especially now that the hard economic
times make sales and marketing people desperate enough to say anything
to get a sale.
Even before the crash,
the QA team at Ariba, a major user of Mercury test automation software,
got so tired of Mercury salespeople overstating the capability,
and understating the problems, of new releases and product upgrades
that they adopted a unique tactic. They refused to talk to the Mercury
sales team, and insisted that the head technical support engineer
come over and be questioned by all of the team before they would
consider buying anything from Mercury. The rationale was that the
tech support person knew that the Ariba QA team would be calling
him, not the salespeople, when the product did not perform as promised.
The tech support person used phrases that the Mercury sales team
had never been heard to utter. These included: It can’t do that.
It’s incompatible with that. It can work that way, but it’s a kluge
and a pain to do.
In one way or another
this, this is happening on a large scale and the effect is really
damaging the economy. By misrepresenting product and service capabilities,
salespeople are trading short term profits for long term problems.
A pervasive distrust with business in general means businesses and
consumers buy less products and services than they would otherwise,
even from businesses that have always been honest with them.
Once again, small
to midsized businesses are largely blameless for the problem, and
as usual, they are paying as much, or more, for the problem as those
who created it. Is it too much to expect that businesses will have
correct information to base business decisions on, or that they
will provide correct information to customers for them to base their
decisions on? Evidently the answer depends on what answer you expect,
whom you ask, and how much you’re willing to pay them for an answer.
Glen Emerson Morris was recently a senior QA Consultant for SAP working on a new product to help automate compliance with the Sarbanes-Oxley law, an attempt to make large corporations at least somewhat accountable to stockholders and the law.
He has worked as a technology consultant for Yahoo!, Ariba, WebMD, Inktomi, Adobe, Apple and Radius.
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