FTC to Web Publishers: Get Rid of Stimulus Scam Ads

  |  March 4, 2009   |  Comments

The FTC is cracking down on misleading ads promoting economic stimulus grants, and the media firms enabling them. Facebook has agreed to ban such ads.

Web site publishers and ad networks are on the Federal Trade Commission's radar, but this time it's not for behavioral targeting or data privacy related concerns. The FTC warned it is cracking down on misleading ads and e-mails promoting access to economic stimulus related grants, and the media firms enabling those ads. Some of the scams are promoted through display ads featuring photos of President Obama, Google sponsored listings featuring the president's name, or sites displaying his 2008 campaign logo or logos of popular news outlets.

Facebook has already agreed to ban such ads, and Google is working with the FTC to investigate ads that violate its advertiser policies, according to the commission.

The FTC is asking "online media companies to monitor their sites for scam ads and get rid of them," said Eileen Harrington, acting director of the FTC's Bureau of Consumer Protection, this morning during a press conference.

"We're reaching out broadly and asking for help on this," she continued, noting the FTC recognizes online ad networks and third-party marketing firms "play a pivotal role" in enabling those ads. However, she concluded, "The buck stops with the publisher."

Besides Facebook and Google, Harrington would not name other Web sites contacted by the commission regarding the scam ads. However, she said, "They will be hearing from us. I would hope this would be a showcase opportunity for online media companies to [screen ads]."

A simple Google search for "economic stimulus cash" turns up several ads for sites such as ObamaStimulusPlan.info, Stimulus.GrantPacket.com, and others. Some ads use the President's name in the copy: "Find Out How I Got My Stimulus Check From Obamas Bailout Early," declares one text ad seen on Google today.

Such ads typically lead to registration forms requiring users to submit credit card information to pay a small fee to receive a CD or access a list of available government grants, information already provided by the federal government free of charge. If consumers fail to cancel membership, they are typically billed a much larger fee of around $100 and subsequent monthly charges. Other online ad driven scams have taken a similar approach, such as those promoting free mobile ringtones, which have spawned the wrath of the Florida Attorney General's office.

"Ads for these Web sites are everywhere," said Harrington of the stimulus-related scams.

"Our AdWords Content Policy does not permit ads for sites that make false claims, and we investigate and remove any ads that violate our policies," said Google in a statement e-mailed to ClickZ News. "We have discussed these issues with the Federal Trade Commission and reaffirmed our commitment to protecting users from scam ads."

Facebook has agreed to ban stimulus-related scam ads from its site. "Ads touting free stimulus money were on Facebook," said Harrington, who said the company pulled the ads on its own volition, and following conversations with the FTC. "We absolutely salute Facebook for being so proactive in this regard," she added.

But it may not be easy for publishers and ad sellers to rid the Web of such nefarious advertising. Exactly who's behind such ads is difficult to determine. Many lead to domains that differ from the ones featured in the ad copy, and transfer from one domain to another. For instance, ObamaStimulusPlan.info features news headlines and links to economic stimulus information, and an ad promoting "free money in government grants," which leads the user to a site associated with Grant Stimulus Source; the site also features CNN and CNBC logos. Between clicking the ad and loading the landing page, however, the user connects briefly with the Greatdealmarkets.com domain.

The final destination site features terms and conditions associated with JRS Media Solutions, "a company that has created various programs that help novices with crafting successful grant proposals, finding sources for grant revenue, and doing the research required for a successful grant proposal." Other names associated with economic stimulus-related ads include Marketingmulti.com and Role Model Networks. None of the entities associated with the ads or Web sites are easily traceable.

Harrington stressed that consumers should notify Web sites when they see scam-related ads. "Let Facebook and Google know," she suggested.

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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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