FTC Endorsement Guides. In today’s digital age, the lines between genuine recommendations and paid endorsements can often become blurred. Such misconceptions make it essential for consumers to be able to distinguish the real from the unreal. The Federal Trade Commission (FTC) is the consumer watchdog. It is authorized to act in that capacity by law, §5 of the FTC Act. The FTC’s role is two-fold: to promote competition and to protect consumers. To ensure that advertising practices remain fair and transparent, and by protecting consumers from false, misleading, and deceptive trade practices.
The Endorsement Guides
In the 1970s, the FTC originally drafted the Guides Concerning Use of Endorsements and Testimonials in Advertising (Endorsement Guides). They were first amended 1980, again in October 2009, again in 2023, and recently updated through FAQs. (16 C.F.R. § 255) Since technology moves at laser-like speed, the FTC tries its best to keep up by periodically updating the Endorsement Guides.
What are Endorsements? Testimonials?
Endorsements are promotional messages that consumers perceive as reflecting the opinions, beliefs, or experiences of individuals other than the advertisers. These can take many forms, from social media tags to verbal statements to blog posts to advertising on packaging. Testimonials, on the other hand, are anecdotal claims about a product’s quality or effectiveness, often shared by everyday consumers, or so we are often led to believe.
Disclosure: A Key Element
Transparency is essential in advertising. Both advertisers and endorsers must disclose any relationship that might influence a consumer’s purchasing decision. Whether it’s a paid partnership or a free product received for review, these connections must be made clear to maintain consumer trust. Again, a key point here is that BOTH the advertiser, the one doing the marketing, and the endorser, the one paid to do the marketing must adhere to the Endorsement Guides.
Why Disclosures Matter
Imagine reading a glowing review about a luxury resort, only to later discover that the reviewer was compensated with a free stay. Or, imagine you are looking to purchase a piece of equipment and you read the reviews. If every review gives a glowing 5-star rating, you might reasonably assume the product is of excellent quality. You would likely purchase the item based on those glowing remarks. But what if you knew in advance that the reviews were fake, made by only family and friends, or that the reviewer was being paid to say nice things, that would surely influence your decision to buy. For that reason, honest information is vital to you as a consumer. The FTC requires that such material relationships be disclosed prominently and clearly.
Substantiation: This Matter of Proof
Another critical element of the Endorsement Guides is that advertisers must substantiate any claim they make. If someone claims to have achieved extraordinary results using a product, the advertiser should provide evidence to support that claim. Without such proof, endorsements risk being misleading. Not only must the advertiser substantiate all claims the endorser makes, but they must also clearly and conspicuously disclose the generally expected results.
Endorsements can be made explicitly or implicitly through words, demonstrations, signatures, likenesses, or any other identifying characteristic of the endorser. Regardless of how the endorsement is made, the advertiser must have PROOF for the claim.
A Call for Your Attention.
Whether you’re a consumer, an influencer, or a business, it is critical that you read and understand the Endorsement Guides. Understanding the importance of transparency in advertising is an essential part of doing business, For consumers, it means making informed decisions. For businesses and influencers, it means building trust and credibility with your audience.
We live in a world filled with masterful marketers, many who will do anything for a buck. As consumers, we have to constantly be on guard. We should question things and seek proof. Yes, it’s time-consuming and downright unfair that we as purchasers have to go through this. But that is our reality today.
Francine D. Ward
Attorney-at-Law, Author, Speaker
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