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July 29, 2019

Cash Back Credit Card Correction;

Group Asks FTC to Investigate Prime Day Promotions

Filed under: Finance,Internet,Retail — Edgar (aka MrConsumer) @ 5:05 am

CORRECTION AND UPDATE:

Before our main story, I wanted to advise readers that the PayPal 2% Cashback credit card mentioned here two weeks ago as a good substitute for the Citi Double Cash card which is dropping almost all benefits soon does NOT have the benefits referred to on its website nor as confirmed by its customer service agents with whom I double-checked. That card only has one benefit – ID theft protection — but not extended warranty, price protection, return protection, CDW coverage, lost luggage coverage, etc. contrary to the link from the benefits section of its website states. I apologize to anyone who applied for this card as a result of the recommendation. I will be cutting up my card shortly. Synchrony Bank, the card’s issuer, just provided us with a response that basically says they are going to correct their link:

…we are taking some action to help further clarify the specific benefits of the PayPal Cashback Mastercard when a consumer is looking on the web. Already consumers can see the two key benefits including ID Theft Protection and Microchip technology. Additionally, we plan to post a specific version of the guide to benefits that you can find here.


Last week, Public Citizen, a Washington-based public interest consumer advocacy organization, sent a letter to the FTC asking them to crack down on websites that promote the sale of products from Amazon.com without clearly disclosing when they have a financial incentive to tout those items.

The group pointed out dozens of instances of stories published two weeks ago on popular websites and through social media that spotlighted certain items as great deals during Amazon’s big Prime Day sale. In most cases, the affiliate relationship the publisher had with Amazon was either not disclosed at all or poorly disclosed. (We documented this very issue last December in this story.)

In an affiliate relationship, a publisher or even a person with just a social media presence can earn a small commission on the sale of products if a reader clicks a link from the website or post and actually purchases the item. Under the Federal Trade Commission’s testimonial and endorsement guidelines if there is a financial connection between an endorser and the product being touted, that fact must be clearly disclosed. Similarly under the FTC’s native advertising guidelines when advertising masquerades as editorial content, clear disclosure of a sponsorship relationship must be made.

As one example of what is going on, Public Citizen cited this story from the Today Show website:

Today Show promotion

The story recommended a couple of dozen items as “the best Prime Day deals.” What the reader didn’t know was that NBC had a financial interest in the sale of those items.

*MOUSE PRINT:

Only if the reader clicked the “read more” link (and they would have no particular reason to do so based on the content that was already showing), would they learn NBC’s little secret).

NBC Today Show disclosure

The program makes a small commission if a reader buys any of the items featured through the links provided.

The problem here was that NBC hid that fact instead of openly disclosing it. At least their specific choice of which items to highlight was an independent editorial decision based on merit. This is how Consumer World selects its Bargain of the Week (which very rarely contains an affiliate link).

Last year, we called out ABC and others for an even bigger problem — running entire “deal” segments on their morning shows, where the network was getting a cut of the sale of each item featured, and not clearly disclosing that fact at the beginning of the segment. See our story.

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4 Comments

  1. Not what I want to see at all.

    Comment by richard Ginn — July 29, 2019 @ 10:09 am
  2. Thank you Edgar for being upfront and honest about what happened with the Paypal card. Integrity means a lot for someone in your position.

    I feel this is going to be an ongoing battle. I think it is pretty clearly meant to be hidden since they decided to hide only the disclosure behind a reach more button. The part that saddens me the most is that affiliate links are one of the best, cleanest, and least obtrusive forms of revenue generation for websites, there is nothing to hide about their relationship with Amazon. If I like a content producer I should want to buy something through their affiliate link.

    Comment by Joel — July 29, 2019 @ 11:02 am
  3. I somehow found out a few months ago (could have been Mouse Print?) that those things they sell as “bargains” on the morning talk shows, that the talk show gets a percentage. I looked at things differently after that and, unless *I* think it’s a real bargain, I might (or might not) buy the item. However, at least I now know what the real scoop is!

    Comment by Cathy — July 29, 2019 @ 1:19 pm
  4. When I saw the original recommendation for the PayPal card, it was not clear to me that it featured the outgoing Double Cash features. It does link to the main MasterCard benefits page, but the PayPal page only highlights the ID theft protection and EMV features. Marketing would want to advertise the other features if they were offered. It is slightly misleading as is, but I think Edgar ignored the big picture because he really wanted the card to be something it is not.

    Thanks for clarifying, and thanks for being on the lookout for a card that can be what the Double Cash once was.

    Edgar replies: Mark, to be clear, I called the Synchrony customer service folks twice to confirm that the card DID come with all those benefits AND that as far as they knew the company was not about drop them.

    Comment by MarcK1024 — August 8, 2019 @ 7:44 am

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