Do you work with brands to recommend or endorse products? If so, you need to comply with the law when making these recommendations.
The Federal Trade Commission (FTC) requires influencers and content creators to disclose “material connections” to brands or products they endorse. “Material connections” means personal, family, employment, or financial relationships, such as when brands pay you or give free products.
These disclosures must include: Financial relationships, Free products, or other incentives received. The disclosures should be clear and conspicuous, for example using hashtags like #ad or #sponsored on posts.
The use of these hashtags and disclosures on your post, reveal to the consuming public that there is some benefit or incentive being received, from the production of your post.
The FTC can potentially fine you if you fail to comply with these disclosures. In a recent clash between the FTC and a cohort of over a dozen influencers on social media, shows the growing regulations on influencers digital marketing. These health and wellness influencers were promoting the safety of an artificial sweetener (aspartame) and failing to give proper disclosures. Warning letters were sent to these influencers, informing them of their failure to make certain disclosures, as well as misrepresentations, promoting the safety of aspartame. In the warning letters, the FTC identified that it had inadequate disclosures, misleading endorsements, inconspicuous placement, ambiguous language, and failure to directly identify the sponsor of the posts. The fine involved in this matter and each penalty notice concerning the misleading endorsements is likely to be up to $50,120 per violation. This fine is intended to deter individuals from committing these violations and put influencers on notice.
In addition to this, you are unable to make misrepresentations, and talk about your experience with a product you have not tried. Similarly, if you believed that a product was terrible, you cannot disclose to the public that it was terrific.
Imagine you receive an incentive of a $10,000 check to endorse a dietary supplement. Having extreme excitement about receiving this brand deal, you try it and hate the taste. Aside from the taste, you hate the smell and after trying it for a month you see no changes. You would be in violation of making misrepresentations, if you choose to post, “The taste and smell is FANTASTIC and you see results INSTANTLY.” These are prohibited and could tarnish your reputation and brand, so you should proceed with caution.
It is imperative for you to be well-informed about the FTC guidelines. Too often influencers become aware of these regulations when it is too late and the FTC issues a penalty notice and requires you to pay a fine.
These rules are intended to ensure that consumers are unable to be easily swindled by influencers and simply make money by taking advantage of others and making misrepresentations. Therefore, it is crucial to make sure that consumers can see and understand the disclosures you are making. Disclosures are likely to be missed if they appear only at the end of a post or video. Thus, you should place the disclosure with the endorsement message itself and confirm it is easily recognizable. In addition, if the endorsement is in published video content, it is helpful to include the endorsements in the actual video, not just the caption or description. Also, if it is in a live stream, the disclosure should be repeated.
As a social media influencer, or individual that regularly endorses products, there are a multitude of regulations you need to be aware of. With the amount of creativity and passion that is put into your craft, you need to make sure you are protected. FTC penalties are relatively simple to avoid with proper counsel to advise you. Thus, if you would like more information about how to tailor your content for FTC compliance, feel free to reach out for a consultation.
Information provided for educational purposes, not legal advice*
