In a Federal Trade Commission notice published last week, the agency warned the advertising industry that penalties could be coming for the use of deceptive endorsements. The FTC not only released the notice, but it also sent a letter (a version of which is available here) to hundreds of businesses (a list is here) – advertisers, advertising agencies, and a few media companies – reminding them of the FTC’s concerns about deceptive endorsements in advertising. While the FTC makes clear that this list of recipients of the letter does not indicate that any of them did anything wrong, it does make clear that the FTC takes this issue very seriously and wants to highlight the issue for the entire advertising ecosystem. The letter reminds businesses that violations can lead to fines of up to $43,792 per violation and other penalties.
What are the FTC concerns? The FTC said that prohibited practices “include, but are not limited to: falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser; and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.” In other words, when an endorser says something about a product, the FTC is expecting that the endorser used the product and the statements that it makes about the product are accurate and reflect what consumers can expect from that product. This is not the first time that the FTC has raised these issues.
Continue Reading FTC Reminds Advertisers That Deceptive Endorsements in Advertising Can Lead to Penalties