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Canadian Authorities Say Fraud Dominates Affiliate Marketing

Misleading advertising that violates Canadian Law 'prevalent' in affiliate marketing

Canada’s telecommunications regulator says that more than 200 companies and websites have been flagged for follow up by a multinational group investigating problems with affiliate and performance marketing.

The problem sites were found last summer through an investigation co-ordinated by the Unsolicited Communications Enforcement Network (UCENet), which includes Canada.

The Canadian Radio-television and Telecommunications Commission, which has extensive authority to level fines and take actions in Canada, didn’t identify any of the problem websites, reveal locations or identify the types of problems detected by UCENet.

But a UCENet report released early this month said that its 2017 investigation of 902 websites, including 221 flagged for follow up, found a lack of provisions for obtaining consumer consent.

The multinational probe, which UCENet refers to as a sweep, focused on affiliate marketing, a method of selling ads which the publishers get a percentage of the sales or are paid on a cost-per-action.

The UCENet report said that misleading advertising was the dominant forrce in the affiliate marketing ecosystem.

“Within minutes of beginning their research, sweepers were exposed to some form of misleading advertising,” the report said.

“Some misleading advertising was directed at common internet users by affiliates in order to generate sales or traffic to a merchant’s website.”

The sweep, which was conducted in June and July 2017, was co-ordinated by the U.K. Information Commissioner’s Office and the CRTC. It involved 10 agencies in six countries.

It said a majority of the participating agencies found that most of the publicly available terms of services between the affiliates, the merchants and the affiliate platforms lacked appropriate guidelines for permissible unsolicited communications.

“This meant that an affiliate could send unsolicited communication without it impacting the contractual relationship with the merchant or the affiliate platform,” the report said.

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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