Major Shakeup in the CPA Rebill Space Involving Wells Fargo
There has been a big shake up in the CPA rebill side of the affiliate marketing space the past few days. If you are a CPA affiliate doing rebills/continuity offers, whatever you want to call them, you may have found that a lot of offers were pulled over the past few days. What’s behind it is that Wells Fargo made the decision to no longer allow any transactions for rebill/continuity offers. Wells Fargo is the bank that many of the payment solution providers were using that provide merchant accounts for CPA offers, so overnight that payment option dried up and many offers were forced to close.
The concern is that Visa and others may follow suit. Between the banks and the FTC crackdowns, CPA rebill advertisers are really going to have to clean things up and get compliant quick to remain viable.
Affiliates running rebill offers need to carefully check them for compliance and avoid working with networks that allow non-complaint offers to run, or you could get caught in the middle and possibly not get paid. More importantly this shady part of our industry needs to be cleaned up because it’s only a matter of time before the banks or the FTC step in full force. Read below for full details.
Jim Lillig posted in the 5 Star forum a couple days ago about Wells Fargo pulling out of the rebill/continuity business. He quoted Copeac as saying:
“What you are seeing from today and yesterday is one bank pulling out of this industry. Its not Visa or M/C and the idiot at CB who told you that should be beat to death. Wells Fargo pulled out of the entire industry, the complaints were to much and the expense of dealing with irate consumers outweighed the money they made. This trend will continue if the industry as a whole doesnt clean up its act. More banks will follow suit.
Offers which hide the terms, force upsells on consumers, and dont respond to customer service calls will eventually be shut down.”
I read Ruck’s post when it came out and think he was 1st to break the story:
The Death Of Rebills? I Think Not.
Ok so a lot of rebill offers went down today. What we have here is a miscommunication of “why” they went down and more importantly we have a ton of “speculation” on events that have not even occured yet. Speculation is a real bitch in this business. Trust me on this one.
There is also a long thread about it over at WickedFire. Mike Kongrel from Copeac does a good job of dispelling the rumors, shining a light on what is really going on and explaining how it’s affecting that segment of the industry.
Then on Saturday Jim Lillig wrote an insightful piece that summed it all up nicely.
*Advertising Disclosure Policy*Wells Fargo Smackdown on Continuity and Rebills – What’s Ahead in CPA
As I write this today, I believe this is just the tip of the iceberg of additional jettisoning of high risk, card not present (CNP) transaction types. I fully expect to see Visa weigh in with additional category shutdowns as they have instituted recently on the Acai Berry products, as well as transactional type smackdowns, such as the negative options.
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#1 peter bordes wrote on January 5, 2010 :
Linda thank you for the good post on this subject.
The sky is not falling in CPA continuity marketing. The industry
needs to understand that this is all about compliance and quality. The consumer must be marketed to with programs that empower them to interact with the brand and product and decide how they want to engage ( click to call, fill out a form online, call into a call center) and what types of programs they want ( buy one, buy two for the price of 3, or get monthly delivery)
Marketers can not trick the consumer or abuse the consumer. There is nothing wrong with the continuity model. There is only something wrong with the people who abuse the model. this is exactly what happened with the “free ipod” and “free ring-tone”.
One thing i have noticed is that everyone is looking for leadership and information. Thats why we have published an open compliance center that will continue to grow as we add information for the industry. http://www.mediatrust.com/compliance.html
we are spending the time and resources to create industry standard information that is open for everyone to access . Many marketers, publishers and merchants dont have the resources to be able to access this info so we wanted to get it out there for all to use.
We encourage people in the industry to please leave comments or reach out if they have questions or if they need other information. We are also launching a legal section on our blog and having top legal firms post info on all the new regulation and compliance info…
#2 Linda Buquet wrote on January 5, 2010 :
Thank you Peter for sharing that info and for taking such a strong leadership position in the industry.
#3 peter bordes wrote on January 5, 2010 :
More to come Linda. Much Much more to come from our camp for the industry. Thank you for your support and helping get the information out to everyone. Communication from trusted sources such as 5Star is very important.