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'Sweep' finds misleading advertising 'prevalent' in affiliate marketing

Last Updated Mar 21, 2018 at 2:40 pm PDT

A CRTC logo is shown in Montreal on September 10, 2012. Canada's telecommunications regulator says more than 200 websites have been flagged for follow up by a multinational group investing problems with a common type of electronic marketing that frequently involves misleading advertising. THE CANADIAN PRESS/Graham Hughes

TORONTO – Canada’s telecommunications regulator says that more than 200 websites have been flagged for follow up by a multinational group investigating problems with a common type of electronic marketing that frequently involves misleading advertising.

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 didn’t identify any of the problem websites, reveal locations or identify the types of problems detected by UCENet.

An emailed statement Wednesday from the CRTC’s media representative said its investigators are working to determine how Canadians have been affected by potentially malicious activity from those websites, and whether there have been violations of Canada’s anti-spam law.

The statement said the CRTC does not comment on ongoing investigations but results of the UCENet probe, which is referred to as a sweep, will be made public in the coming months.

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 focused on affiliate marketing, in which merchants pay a commission to affiliated intermediaries that provide sales leads or sales.

The UCENet report said that misleading advertising was prevalent 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.