Affiliate marketing firms must ensure product reviews and endorsements running on linked sites are from legitimate customers – or at least say if they are not – or face the prospect of legal action.
The OFT is planning a major crackdown on the practice after taking action against MoreNiche – and accepting legal undertakings – over misleading ads run on its network.
The regulator found many of the reviews and product endorsements running on MoreNiche affiliate sites were presented as independent consumer reviews when they were in fact commercial promotions.
In addition, some sites did not make clear that the affiliate would be financially rewarded for purchases made by consumers they introduced to MoreNiche merchants.
The company, which operates an online network bringing together 30 product merchant businesses and over 149,000 affiliate marketing businesses worldwide, markets products such as diet aids and teeth whitening products to consumers.
OFT senior director of the goods and consumer group Cavendish Elithorn said: “When looking at online reviews and comments, it is important that consumers are not misled about the status of what they are reading – who has written it and why it has been written. In particular, they need to know whether that reviewer is receiving any form of payment for promoting the product.
“Innovative and vibrant businesses drive our economy but it is important that online businesses develop without compromising consumer protection. Ensuring transparency and fairness in online transactions is a key priority for the OFT and we will continue to take action when appropriate.”
