The law is typically slow to catch up with business practices, so it’s no surprise the FTC is just now proposing changes to its endorsement and testimonial guidelines for marketers thirteen years after its 2009 amendments (the iPhone 3 era, to be exact).

There’s a lot to digest in the proposed changes, but we are going to give you the highlights so that you can be prepared when creating your clients’ campaigns.

Does this impact me?

If you engage in any form of social media promotion, whether as an endorser, influencer, brand, advertiser, or agency – yes, these changes impact you.

Let’s start with the basics. What is considered an endorsement/testimonial?

The FTC defines an endorsement as “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser.”

This definition now includes any marketing or promotional message, including the simple tagging of a brand in a social media post. Any such endorsement has to comply with the FTC guidelines.

Who is an endorser?

An endorser can be an individual, but it can now also be a group or institution, including even bots or fabricated profiles. Endorsers have to be actual users of the brand/product at the time the endorsement is given – if they aren’t, then it needs to be clearly stated that they are not users. Additionally, endorsers’ opinions must be representative of the typical consumer experience when utilizing the product or service.

Finally, the proposed amendments prohibit misrepresenting any material attribute (a significant trait) of a featured product or service by an endorser, specifically physical attributes. For example, the promotion of a weight loss product by an endorser whose body has been photoshopped to be smaller would be considered a prohibited misrepresentation of a material attribute of the endorser.

Who is an expert endorser?

An expert endorser is someone represented as having specialized experience in a field that is superior to that of the average consumer (such as a fitness trainer promoting an exercise program). An expert endorsement must adhere to all ordinary endorsement requirements in addition to any additional requirements concerning the endorser’s “expert” status.

The representation of an endorser as an expert can either be explicit (“I’m a doctor,”) or implicit (wearing a white coat with a medical badge). The expert endorser must have the qualifications they are perceived as having. If not, the misrepresentation would be considered a violation.

What if an endorsement doesn’t comply with the FTC? Who is liable?

Anyone – agencies, advertisers, and endorsers can be liable if an endorsement does not comply with the guidelines. Advertisers and agencies can be liable for many reasons, including causing an endorser to make a false claim, by failing to disclose material connections, or by hiring endorsers who fail to make necessary disclosures. Endorsers themselves can also be liable if they knew or should have known they were making a false or deceptive claim.

Speaking of disclosures – let’s explore further.

The FTC wants to tighten up disclosure requirements. This means that any material connection must be disclosed, and the disclosure must be presented in a manner likely to be seen.

Specifically, advertisers will have to pay special attention to what is known as the “triggering claim”. Is the triggering claim visual? Then the disclosure needs to be visual. Is the triggering claim via audio? Then the disclosure needs to be via audio. Is it both? You guessed it – the disclosure must be given in both formats.

Advertisers also now need to take into consideration the target audience. If they are speaking to a group of elderly people or to children, the disclosures will need to be constructed in a manner that will likely be perceived and understood by the target audience. Children present such unique obstacles that the FTC will be exploring this aspect of advertising exclusively during a public event in order to provide additional guidance.

Got it, I’ll disclose material connections. What qualifies as a material connection?

Material connections include standard monetary payments, gifts of products, etc., but they also can include business, family, or personal relationships, early access to products, possibility of winning a prize, or appearing on TV or in other media productions.

Now, if someone buys a product and posts a positive review, this is not considered a material connection. The person is just an ordinary purchaser sharing an experience. If, however, there’s a marketing program in place where a participating consumer can try a product and give a review, then there’s likely a material connection, and a disclosure is required.

Okay, I now realize I may have some issues with old social media posts – do I need to delete them?

If they weren’t misleading when they were posted, and the dates are clearly displayed, then you probably don’t need to delete them. However, reposting the post could be a violation.

What can I do with customer reviews?

Not much. Altering, deleting, or otherwise manipulating customer reviews is generally not permitted. Additionally, reviews cannot be paid for or solicited (either in support of your own product or to the detriment of a competitor) whether they are by real persons, third party providers, or bots. This applies regardless of whether the review is considered an “endorsement”.

You may edit reviews that are clearly spam, offensive, or otherwise have nothing to do with the product. However, any such editing/removal/manipulation must be applied across the board and cannot be used to remove only certain reviews or testimonials.

Can I use third party review sites?

If these sites accept payments in exchange of higher rankings for your product or brand, they are not acceptable. If you pay for the site generally (but not for higher rankings), then they may be acceptable. However, you still need to disclose the payment clearly and conspicuously while linking to an example involving payments for affiliate links.

That’s a lot to keep track of. How can I reduce my liability?

Businesses and the agencies that advise them should have clear social media policies concerning advertisements, endorsements, disclosures, and the like. These policies should be clearly communicated to all necessary personnel as well as to business partners, independent contractors, clients and certainly all paid influencers. Additionally, contracts are key in designating requirements and assessing liabilities among agencies and their brand clients and influencers. Invest in clearly written agreement templates that incorporate disclosure requirements and appropriately assign responsibilities for compliance.

Have a question about your next influence or social media campaign and FTC compliance? Contact us with questions.