The FTC is Cracking Down on Internet Marketers

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Welcome to another issue of Passionate Income.

Today we’ll be discussing how the FTC / Federal Trade Commission - which is the department of the US government responsible for regulating media - is cracking down hard on Internet Marketers.

Let’s dive in.

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In 2018 I heard a well-known guru predict we would begin to see more lawsuits, crackdowns and government enforcement in the IM space.

Which made sense: Funnels fueled by social media ads thrust “Make Money Online” offers into the public consciousness at a level that had never been seen before.

But for the most part, nothing really happened.

Yes, the FTC cracked down on the Digital Altitude team in 2018, resulting in a $4.7M recovery that was later distributed to victims. And they also cracked down on Agora’s misleading advertising.

But in general, 2019 came and went. Then 2020.

The years rolled on, but we never got any big news.

Until now.

Earlier this month we learned the FTC levied a $16.3M fine upon Taylor Welch and Chris Evans, founders of the company Sales Mentor (which was an offshoot of their high-profile coaching program: Traffic and Funnels).

Shortly after, the same attorney who first shared the news on X shared another image showing the FTC had levied a fine on the founders of the Blueprint to Wealth program.

On the one hand, both of these companies were using highly spammy (and in many cases unethical and illegal tactics) to sell their programs. And because of that, if you operate an “above board” business where you follow the law and aren’t scamming people, you shouldn’t have any reason to worry.

At the same time, the fact both these lawsuits happened during the same year - after years of 0 crackdowns in the broader Internet Marketing space - is telling.

It signals what some in the industry have been predicting for years:

The days of Internet Marketing being a Wild Wild West that’s immune to government regulation are coming to an end.

Here’s what this means for you.

While your business now might be too small for the FTC to notice, that’s the same attitude the founders of the above-mentioned companies had.

I feel comfortable saying this because I was a ‘victim’ of one of the above companies, and knew the founders when they first started in 2014.

See, the problem with getting momentum in business is that it can be hard to scale back once you find something that works.

As an example, if you start off running funnels using income claims - and your marketing actually works - the temptation to continue making those claims grows exponentially.

Why?

GREED

If you’ve struggled with money your whole life, and you very quickly go from nothing to making $50,000 or $100,000 per month, do you really think you’re going to want to scale that down so you can obey the law?

No, of course not.

99% of people would go “Petal to the Metal” to milk the opportunity for all its worth. Which is what happens to most Internet Marketers.

It’s rare someone starts off being a full-blown scammer. A criminal with bad intentions.

Instead, what’s much more common is that they launch something they legitimately believe in. Something they have evidence works.

But in the process of going from working with five people, to fifty, to 500 and eventually 5,000, their thing stops working. Because as is the case with every hyper-growth business, the faster the business grows, the more the founders become further and further removed the front lines.

In particular, less involved in the fulfillment aspect of the business (which was the entire basis for launching the company in the first place), and much more involved in managing their employees.

(Which is why you should avoid large coaching programs like the plague: By the time a coaching program gets big, odds are the guru who invented the system hasn’t executed on it in years.)

Point being: Most entrepreneurs don’t start off as scammers. Instead, they’re honest, hard-working people trying to make it online.

But as they say: The road to hell is paved with good intentions.

While it’s easy to point fingers and say “I would never do such a thing…”

If we’re being honest, if most people were thrust into making the kind of money the above founders made, they would do the exact same thing. In fact, many of the people who came out judging the above founders use (or have used) the same type of income claims and high pressure sales systems in their own businesses.

But because their companies never took off, they never got in trouble.

In short, money is a helluva drug. There’s a reason Greed is one of the 7 Deadly Sins.

So don’t think that just because you’re too small to notice today means you’ll stay that way. Because if you actually achieve the thing you want - which for most of us is success - odds are you won’t stay small for very long.

💡 Takeaway: After years of Internet Marketers getting away with running illegal advertising campaigns, the FTC is finally cracking down. And while it’s easy to break the law under the assumption nobody will ever find out, if your business succeeds, you could find yourself facing an impossible crossroads.

I'll leave you with this quote…

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