Am I Liable for This? You Be the Judge…

Yesterday I received an email from a reader who had hired a copywriter based on my recommendation in late 2009.

Unfortunately, he was not happy with the sales letter he received from the copywriter, and the copywriter allegedly did not complete the work he had been paid to do.

About seven weeks ago, the reader wrote to me about his negative experience with this copywriter. It was the second complaint I had received from readers regarding this copywriter, and I had also received an additional warning from a fellow marketer.

At that point, I pulled my endorsement of the copywriter, and made it clear on my website that I am no longer recommending him.

Now yesterday I received another email from the reader…

Hi Eric,

I hope you are well.

Just to let you know I contacted BBB.org, PayPal and my credit card company.

The business of [redacted] is not registered with BBB.org.

The complaint with PayPal can only be filed within 45 days from the date of payment and that period is exceeded due to [redacted] procrastination and the story telling.

My credit card company is not able to provide the refund of $1344 I paid to [redacted] for the letters he never wrote as there is an involvement from PayPal between them and the vendor.

I acted on your recommendation to choose services of [redacted] as you described him trustworthy and reliable.

From all people and businesses who gave testimonials on his web site only one responded on my enquiry.

The others simply ignored my enquiry and some of the have URL error.

I do not want to lose $1344 USD for nothing as I acted in full honesty and transparency and am asking you to provide me with the full refund.

Hope to hear from you soon.

Kind regards
Dragutin

As you’ve seen, the reader is asking me to compensate him for the payment he made to the copywriter.

I should mention that I do appreciate his polite tone. If he had sent a “flame” I wouldn’t be featuring it here.

I asked him for some additional information, and here is a copy of his communications with the copywriter:

PDF of email correspondence [redacted]

So there are really two questions at stake here…

1) Am I legally liable for the products I endorse or promote as an affiliate?

2) What is the right and ethical thing to do?

The ramifications are very significant, because the answers to these questions affect not only this situation but also…

– Everything I endorse/promote.
Everyone who endorses anything or promotes something as an affiliate.

This is why the Internet marketing world was in a tizzy last December when the FTC rolled out their new guidelines for endorsements and testimonials.

So let’s answer the first question, as it applies to this situation:

Am I legally liable?

According to the FTC, endorsers may be liable for false or unsubstantiated claims made in an endorsement, or for failure to disclose material connections between the advertiser and endorsers.

Let’s talk about false or unsubstantiated claims.

If I had blindly promoted the product/service without checking it out first (as many affiliates do in this industry, and as I have done in the past on occasion), then I believe I might bear liability if my claims did not match up to the product. Let that be a word of warning to all affiliate marketers: You ARE responsible for what you say/write.

However, in this case I was speaking from first-hand experience. I had actually paid this copywriter $197 to write a sales letter for me, and I felt that the product I received was a good value for the amount that I had paid.

Therefore, my claim was substantiated, and I made the recommendation in good faith that the copywriter would provide similar value for other customers.

Now let’s talk about disclosing material connections.

I initially wrote my recommendation in October of 2009, which was prior to the new FTC guidelines going into effect.

When the new guidelines went into effect on December 1st, I added an “Affiliate & Material Connection Statement” to my website, which I believe satisfies this requirement. If I am shown otherwise, then I might need to get more aggressive about disclosing material/affiliate relationships.

In this particular case, I never did get paid an affiliate commission for the sale in question. So I’m not sure how that affects the material connection from a legal standpoint. Am I still an affiliate if I’m getting scammed too?

OK, so in my opinion I am NOT legally liable for the copywriter’s failure in this situation.

But that brings us to the next question…

What is the right and ethical thing to do?

Although I am someone who believes in absolute truth, and a clear distinction between right and wrong… the realm of ethics can still be grey at times.

I’ve tried to put myself in the customer’s shoes.

If I were him, I probably would have written the same email to me.

I’ve been a victim of scams in the past, so I’m familiar with what he is feeling. It’s one of the worst feelings that the pallet of human emotions can paint. Anger, frustration, regret, self-loathing… all rolled into one. The only way out of it is to go through the grief cycle, and reach a point of acceptance.

From the look of my dear reader’s emails, he’s gone through the denial and anger stages, and has now come around to the bargaining stage. Like I said, I’d be bargaining too.

I see this from two perspectives… justice, and compassion.

From the justice standpoint, I believe it would not be right for me to give him the refund out of my own pocket. Would justice be served by this? No.

Now… IF I had been paid a commission, I do think partial justice could be served if I refunded that commission to the customer. But in this case, there is no commission to speak of.

From a compassion standpoint, I’d love to help out my reader.

If we were talking about a much smaller dollar amount, I probably would have just offered to pay for it (or more likely… I wouldn’t have gotten an email about it in the first place). But $1344 is a decent chunk of change.

We all know the golden rule: do unto others as you would have them do unto you.

If it were the other way around, would I want him to pay for my refund out of his pocket? Yes I would, at this moment in time. But after more time has passed, I would most likely come to the conclusion that justice would not be served by an otherwise innocent affiliate paying me out of his own pocket.

In other words, my sense of justice would eventually trump my desire for recompense. (The two are not mutually exclusive. The victim should be paid back in order for justice to be served, but taking the money from the wrong person is not the solution)

So I do not think it is my moral obligation to pay for the customer’s loss…

But I want to know what YOU think!

I told the customer I would post this on my blog, and take my reader’s opinions into consideration.

I want to know:

What would you do in my situation, and why?

I am absolutely willing to pay a full refund to the customer if the arguments in his favor outweigh the arguments against.

I wish I could just err on the side of compassion, but obviously such a precedent could open me up to a lot of headaches and abuse due to other customers taking advantage of my leniency. If that is the outcome, then I will probably change some things about how I run my business.

Post your comments below. Please do not “trash” me OR the customer or even the copywriter. That’s not the point of this. At the same time I am not necessarily looking for support. I want your honest opinion, even if you are not on my side.

Obviously this is not something that needed to be made public, but I am doing so because I think we can have a good constructive conversation. This is an important topic that affects all Internet marketers. So let us know what you think.

Thanks for your input!

UPDATE: I’ve now posted the conclusion to this saga here:

PART 2

1,059 comments on “Am I Liable for This? You Be the Judge…

  1. Lola

    In my opinion, I believe the only ones who were in contract with each other are responsible.

    It’s like recommending someone to paint a house because they did a nice job on yours. If they hire them, ONLY the worker should be held responsible. I know, I have seen this happen recently.

    The man you mentioned hired the copywriter. So what if you recommended him based on past experience. He should be dealing only with the copywriter, not you.

    This is basic common sense, something that seems in short supply lately. If the consumer thought about it, even though he wants recompense or vengeance, it isn’t your fault.

    Everyone who makes a contract, no matter how flimsy, should except responsibility, not push it off on someone else because they recommended the person. Isn’t that called “due diligence”?

    Reply
  2. craig stephens

    I am in agreement that you are not responsible to repay him. He , of his on free will decided to hire a copywriter. He did so on your suggestion. You provided the suggestion based on your previous good experience. If we are to be liable for the behavior of others then we would never recommend anyone because although they may have served us well, circumstances change daily and the person that you recommend as a result of your experience has since chosen to not deliver, how is what you did wrong. The victim may have surfed the net , ask 100 others their opinion before accepting your advise. He is responsible for his actions , the liabilty to either deliver or refund is soley that of the copywriter.
    In the offline world I handle similar situations all the time. I am a boat/Yacht broker.When someone ask me for a recommendation , lets say for a shipper to transport their boat either by road or by water, I answer the issue by providing them with a list of 3 to 5 choices. They choose from a list. This releives the liabilty because I did not neccessarily recommend a specific provider only a group. I have been to court over a situatuion like this and the judge clearly ruled that I was not liable. I felt that I addressed my customers request for a suggestion and then left the outcome up to them. Hope you can use this suggestion.

    Reply
  3. Byron

    (NOT sure how old this issue is at this point)BUT I don’t think you should pay, it teaches poor business decisions on your part and you are the (&my)instructor of I.M Business: bad lesson!! I recently had a similar problem of 300 and i wrote the affiliate/teaches/instructor of mine, but not to ask for the money from him. Only to warn him of this false practice from a person he endorsed. I told him i would take of care of it but wanted to give him the heads up. I think the 3rd party beef should be with PayPal or his CC company not YOU!
    I love your lessons Eric

    Reply
  4. Byron

    Also, Your a good Copywriter. Why don’t you just finish it or have someone on your team do it? & that’s just because YOU can and you are being charitable, nice guy ๐Ÿ™‚
    How did this end By the way? too many comments to read lol

    Reply
  5. Byron

    Why was the guy [redacted]’s name even printed? I mean why wasn’t it blurred out. I’m suspicious now ๐Ÿ™‚

    Reply
  6. Rachel

    Hello, This post looks old. But I kinda feel the urgency to say, that in my opinion, it is a little bit cheeky to ask you for money.
    I m very new here, literally the first day but this site looks VERY trustworthy to me. You seem to know what you re talking about, loads of helpful lessons and there s no get-rich scam.
    I m not even bothered to read the PDF (sorry). But I think it should be obvious.
    If I read something on the internet and think this might be good for me, I still do my own research. And then its still my own responsibility to make it work.
    And if there might be any misunderstanding or bad communication between those two, why should you be asked to sort him out???
    I would never think of asking some affiliate on amazon to pay me money if the product I purchased didnt satisfy me.?.
    Sorry if that hurts his feelings and sorry for his loss. But its a problem he has to solve himself.
    I feel thats very very cheeky.

    Reply
  7. InsideJobber

    I’d have paid him out-of-pocket the comission I would have recieved. Then I would have suggested that since we were now both owed a debt by the same party – his lack of refund automatically giving me a claim on the unpaid comission – we pool our resources against the debtor and persue him from both directions.

    I haven’t read through the thousand comments to see if or how you worked this out, yet. But nice dicsussion. Raises some interesting points.

    Reply
  8. liz

    if you had received commissions then yeah maybe on a moral standpoint I would refund the commissions. But there is not way you should be made to pay for his mistake even if you recommended it. Buyer beware. I feel bad for the guy and I would be very upset to lose that money but I would never go after someone else for it just because the copywriter didn;’t refund him as he should have. You yourself got good work firm him and you can only advise on what you know it is up to the buyer to research. I see recommendations all the time but I also do my own research outside of that. It always been buyer beware. I see lots of products that do not do as they claim to do and these people are still in business. It has always been buyer beware. We need to use the refund policy within the time frame specified or we are SOL so so speak. Like I said I feel bad for the guy losing that much money but you should not refund or be bullied into it. It seems you are being pressured to take the fall for the copywriter and to me this is not justified. He could not get the refund form the right person so he goes after you? Seems a bit much. You site is full of useful information and I am sure it has helped a lot of people. I have even checked out some of your recommendations and because some of them are dated I do my own research as well. We all appreciate peoples opinions of products and you can only tell us what you know to be true. Thats all we should expect. You are not liable for others peoples business and how they choose to run it.

    Reply

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