Internet Business Garbage
If you’ve been paying any attention to internet business news, you know that VISA/Mastercard did some cancellations of merchant accounts this past week.
In most cases, they were well deserved.
Of course some people will be hit unfairly. It always happens when there is any type of crackdown. Some innocent people get categorized with those doing business dishonestly. For anyone who loses their merchant account, and didn’t participate in the junk, it is truly sad.
The reason I say it was well deserved is from all indications (both from public discussion and what I know privately), they were specifically targeting people with high chargeback ratios who ran continuity programs which weren’t well enough disclosed. In addition, they’re targeting those using multiple merchant accounts in the same upsell process (you buy product A and they charge in one merchant account 1, during the upsell you buy product B and it is charged to another merchant account in an effort to hide the overall transaction from the merchant accounts).
The continuity may not have been totally hidden, but it wasn’t obvious.
And of course, along with the cancellations, a few merchant account providers (who found themselves as targets because of number of companies they associated with like this), are really tightening the screws on all their merchants. They need to keep themselves out of trouble.
You can see the first post on this subject by Ryan Lee here: “Forced Continuity and Free Trials Are Almost Over! READ THIS NOW!”
He is simply reporting the news of the letter and his discussions with the merchant account providers that the free offers with forced continuity aren’t going to be allowed.
Don’t take the news the wrong way though. NOTHING is wrong with continuity itself. The problem is how some people are selling it. Those free CD and free DVD offers where you pay shipping and you’re automatically signed up in continuity are the ones who are having issues. If you sell a straight membership site where they pay to join and it’s obvious there is a monthly continuity, you should be safe (notice I said “should” because again things go overboard).
Basically people simply need to clean up their act.
Check out Ryan Healy’s “Internet Marketing on Life Support.”
Let’s see. It currently shows 174 comments (and 374 comment/tweets if I’m reading it right). Sounds like Ryan really hit the controversial nerve here by actually naming a few names.
If you’re ever wondered why I avoid giving names, it’s because often the worst offenders aren’t obvious from the outside. You don’t found out about some of the real junk that goes on inside the business unless you end up in a few private conversations (which you can reveal).
In addition, I find that naming specific names makes the overall tone turn very negative. Clients and friends have asked me before about writing posts that name out specific people, and I’ve always told them to be very careful here to deliver all the facts (not the emotions) of the situation. In addition, they need to make sure to switch the negative into a positive note by the end.
We don’t want to dwell on the negative. We don’t want to dwell on those doing business dishonestly, because it gives the wrong impressions to people.
In news, they say, “If it bleeds, it leads.” The negative side will always bring more attention, but it rarely helps us accomplish our goals.
I think Ryan’s post above is an excellent one where he did his research, but take notice how the comments take an negative turn…including several attacks on people (where the whole story may not be known).
I agree with what Michel Fortin says here, “On Not Playing the Blame Game.”
His wife, Slyvie Fortin, put out her Internet Marketing Sins report a few years ago. She did not name any names, but talked about the sins. Their reasoning is they want to be advocates for the marketplace, not judges.
I agree completely.
Over at his blog, Greg Nemer asked, “Am I a Pansy?”
Nope. You’re not Greg. You said, “One of the policies that I’ve made for this blog is to never use it for negative purposes. I won’t even do it in the comment section.”
That’s a good attitude. Even when it’s a negative subject, you’re better off turning it into a positive. It’s what’s best for us and our readers.
And unless anyone thinks that this is something unique to “internet marketing trainers,” It’s most definitely not. I often read a few of the news headlines every morning. Visit those top news sites and you’ll find tons of very scummy offers. In fact, you’d be hard pressed to visit a news site (major ones like Fox News, Wall Street Journal, etc.) where there isn’t still an ad for a “flog” (fake blog).
The free offers and hidden continuity featured on these sites are outrageous. Including such statements as this in the small print at the bottom, “Please recognize the story and comments depicted on this site and the person depicted in the story are not real.”
The entire story of the incredible results this Gainesville mom (it shows Gainesville for me since that’s the closest large city to me) are a lie. They’re fake. Yet the entire sales piece relies on that fake story which isn’t revealed as a “story” anywhere except in the small print at the bottom.
You see that kind of garbage for all types of promotions (health products, whiter teeth, work at home, etc.).
Basically as consumers, we all have to be careful in our online dealings.
There are many companies that are all about making that one time initial sale (and then charging you forever for it if they can get it), and aren’t really about delivering the best experience to their customers.
The good news is that things are changing. The FTC and VISA/Mastercard are doing what they can, BUT they will never accomplish the greatest changes in the marketplace.
Social media, your ability to contact others and correspond with others online, is going to be what transforms the industry as a whole over time.
And I’m glad of it.
Go back twenty years. There wasn’t anyway to to easily contact others about their experiences with a company. Today you can find out the opinions of others quickly. Sure, there are growing pains. People are abusing the system, but eventually the power of the free marketplace will win. For examples of abuse, it’s often easy to see them on sites such as Amazon. If a book has almost all 5 star reviews, but the reviews are very similar and promotional in nature, you know the publisher is influencing them by having them written.
When you look for it, the abuse does stand out. So we all need to be thankful that we’re in this day and age.
There have always been scammers out there. I remember my mom telling me as a child, if something sounds too good to be true, it probably is. I think all moms say that. 
We live in the day of the power of the consumer though. Look at the 3 Marketing Lessons From Building a Pool. I did my homework first, because that information is available to us now.
There are growing pains with the Internet, but we can see the brighter day.
Related Entries:- 7 Steps To Start A Blog Today
- Forced Continuity
- Rebilling Nightmare
- Honest Business?
- Always Back Up Your Hard Drive
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Great post Terry as usual. Personally I am happy for this shakedown.
I got in IM early (1995) but exited the IM market years ago and switched to teaching folks how to be happy, instead of how to get rich.
A far larger percentage of my new students succeed in learning to be happy than the percentage of my old students who learned how to get rich on the internet.
And if you are happy, who cares if you are rich?
I’m sure I could have made more money in the IM stuff – but I felt with most JVs presented to me that I would be lying down with dogs and waking up with fleas.
Looks like the fleas have come home to roost. (pardon my mixed metaphor)
I’m really glad the forced continuity / free trial / hidden continuity malarky is coming to an end.
It poisons the water for all of us and there’s a little bit of schadenfreude there too.
Hi Terry,
While many internet marketers are clearly freaking out about this, I say that it is about time. Most of the junk out there that uses the continuity model is not only deceptive but damages the reputation of the internet marketing world in general.
Not fully disclosing your intentions in plain site and not in 6-8 point font under the exaggerated “order now” button or worse still, offering your “free” or “near free” teeth whitening product for credit card details just to whack the customer over the head with monthly fees and little recourse to cancel (some are nearly impossible to cancel) is simply bad business and almost predatory in nature.
Anyway, good post.
Merchant Accounts on Forced Continuity… A strong arm or just a few bad apples?
Let’s ‘not’ toss the baby out with the bathwater…
Just received a letter from PayPal’s consultant department and they have assured me that as of today ‘no’ immediate plans to pull all forced continuities… ‘ as long as ‘ they remain open and transparent with their copy/text, which outlines and fully ‘discloses’ future payments that will be applied to their credit cards, provided that they don’t cancel. Also, speaking of cancellation, be sure to spell-out your cancellation in your guarantee box (clause).
Now, regarding personal merchant accounts that are handled within your domain, eg., shopping carts, internal gateways, etc., with MC & VISA. According to other Forced Continuity Gurus’ they ‘had been required’ to change Their ‘free plus s&h’ approach to one of… join my ‘continuity’ (long or micro-types) and they’ll send you a free iPod (cd,dvd’s… etc.) along with your first payment of such ‘on-going billed’ continuity program.
For me?… I’m trying both. Sticking with the free + s&h for Paypal accounts and probably switching to a new format for integral (MC/VISA) merchant store billings. I still believe it’s a genius marketing approach… and by being fully transparent with my/your copy and fulfilling your cancel guarantee, you probably ‘need not’ worry about repercussions.
Hopefully, we can address the forced (the m/cards reference to such as ‘negative continuity’ seems a little wacky) continuity issue with some fairness in descriptive laws issued by the merchant hierarchy, with full understanding of its applications thereof.
“It would seem futile to cut-loose, or otherwise shut-down a perfectly good and if used with correctly, an acceptable and powerful marketing approach!”
best with your markets!
-Michael Lofton
Hi Terry,
Very thoughtful post as usual.
Ethical marketers would never try to hide, disguise or otherwise try to trick or mislead someone into a continuity program they don’t really want so the closing of merchant accounts shouldn’t bother them and reducing unethical practices should help everyone else.
I also strongly agree with keeping things positive and focused on solutions.
One question however: how do you reconcile not naming names with using the ability to communicate with others using social media to point out possible scams? If somebody had a bad experience with a product or a sales process or customer support, I’d like to know what the product was specifically not just a general description of it.
Totally agree with you.Internet business garbage exists in a superlative degree.And scams or bad business also.
Terry,
Thanks for a post that truly encourages everybody to always do the right thing.
As we see more and more “crackdowns” on questionable marketing and business practices by those who are in a position to take action, it will only leave more opportunities for those who have worked hard to build an ethical business that cares about their customers.
Best regards,
Tom
Hi Terry
A great post that addresses some key issues on ethics and ‘internet cleansing’.
Honest marketing and the focus on positivity are essential for the integrity of the free marketplace.
warmest
Matt
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Ed: I’ll bet you’re much happier doing that work also! It seems to fit you from what I see on your site.
Alex: I’m certainly glad hidden continuity is coming to an end. The entire transaction should be made as clear as possible to those buying.
Leo: I’ll be glad to see all the junk go. Remember it’s not continuity that is the problem though. It’s the deception people are using with it. Clear and obvious is the key.
Michael: I like that phrase Paypal used – “open and transparent.” It’s a good one. The one problem with the free shipping plus continuity is that too many people would hide it so it wasn’t noticeable.
Joe: If you have a bad experience with a company I suggest you do review them and tell others about it. But I wouldn’t want to use hear-say or anything that came up in private conversations. Many sites are creating specifics places to do reviews such as Amazon has. There are consumer complaint sites. For local businesses Google allows you to review (in addition to other sites that have reviews). I’m more of the nature I don’t want to become a “review” site for everyone else.
Tom: Agree completely. People keep running around saying the sky if falling, but it’s not. It’s growing…and becoming a better business environment for everyone.
Matt: Thank you!
Hi Terry,
I am glad the forced continuity issue is now coming to an end so to speak. I have been scammed a few times this way and did find it very hard to cancel, what is more the people in particular where high Guru’s so to speak and truthfully the continuity program they forced me into was crap, plus my product never arrived on time.
It is good that these people are coming undone and forcing people to be more transparent.
Kind Regards
Jacinta
(An Aussie mum trying to create a business online while her 2 year old sleeps!)
Once again Terry you have hit the nail on the head
Terry,
While I commend Ryan for doing it, being careful to research his facts and state his case as an advocate for the market, I personally wouldn’t do it (name names) and that’s just because I’d hate to manage the things that may result…
Attracting the attention of unreasonable people or having to moderate a debate that may drain my time, attention and emotional energy!
With regard to the changing conditions of internet marketing, I think all internet marketers (all American-based ones, anyway) should start reading case studies, articles and business histories from the 1970′s.
That was the last time there was a rush of regulation and over-regulation comparable to the one that is certainly only just beginning.
Gogo
Terry,
Great article! I have seen many posts about how unfair it is that Visa and MasterCard are cracking down on these transactions and am glad to finally read something of substance.
I think it’s great that there’s finally starting to be some regulation protecting consumers, which will only increase their trust in the internet and hopefully their consumption! And this can only benefit (honest) internet marketers.
In the world of cash for clicks, the more inflammatory the story the better. Journalism is deteriorating and taking the media it is printed/posted/taped to with it. I would have to say that the amateurish bloggers are to blame. don’t get me wrong. There are some very insightful blogs and bloggers, such as yourself. For the most part it is all trash…like those As Seen On TV commercials for a widget that can save you time AND money with three easy payments of 59.95…plus shipping and handling of course.