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FTC cracks down on paid online reviews

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Washington, D.C.—The Federal Trade Commission has fined a Tennessee educational DVD company for hiring affiliate resellers to positively review its products without divulging the financial arrangements.

Legacy Learning Systems of Nashville was fined $250,000 for violating the FTC's guidelines, published in 2009, which require that “material connections” between advertisers and endorsers, such as bloggers, must be disclosed.

Legacy's affiliates posted glowing reviews of its music education DVDs, purportedly as independent users or reviewers, but without disclosing they were getting paid for every product sold.

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