Will New Advertising Rules Save You Money?

The ability of companies to advertise their products and services on the internet without the public being aware that what they are reading is actually a paid advertisement is set to change in the New Year. The new guidelines being put in place by the Advertising Standards Canada will force any company who chooses the internet to advertise to fully disclose that they are in fact doing so. The days of reading product reviews by supposedly third parties with no affiliation to the service or product provider are coming to a close, in theory anyway.

The new rules state very clearly that any affiliation between the provider and the blogger or website must be fully disclosed to the consumer and must be done so in close proximity to the actual advertisement. This means that by simply putting a line of fine print announcing the affiliation between the sites or blogger and the provider are no longer considered enough. How many of us have been deceived by this type of endorsement in the past? More than would care to admit I suspect, and even more who were fully unaware of the link between the two at all.

Many people take to the net for an endorsement or comparison of a product or service provider and read the so-called third party reviews of the product and safely, or so we think, assume that the product has been well received by the public and that it is a good purchase based on information we believe to be factual. In fact those endorsements have been in many cases, bought and paid for by the actual provider of the good or service.

This constitutes fraud, plain and simple, but up until now there was no rule, other than the moral one which seems to have no practical benefit in society anymore, against this type of behaviour. That changes in 2017. How will this rule change potentially save you money? For one, when you read the endorsement for a product in the future you can be sure that the ones that you read are legit rather than mere paid fabrications, unless the company decides to flout the law and continues with the shady practices of the past, and many will to be sure.

The incentive to follow the new rules is actually quite small as the ASC will not be in position to fine offenders, instead the fine levying if any at all will be done by the Competition Bureau instead. It remains to be seen if the threat of sanction will fully be able to curb the ingrained practices that are quite common in the new mediums that we are buying and selling in. The fact that the web is still in some ways the Wild West causes the age old axiom of “caveat emptor” or “buyer beware” to be even more fully applicable than in days past. Do your homework yourself and satisfy your curiosity without relying on the testimonies of others, especially on the web.


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Sam Seidman, CPA, CA, LPA
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