“On December 1st we’re not going to start suing people.” Those are the words of the FTC’s Mary Engle, who quelled rumors that the FTC was about to enter into a vendetta against endorsement and testimonial advertisements. She said that the guidelines recently released on the topic are just that – guidelines – and do not have the force of law.
Engle also confirmed that while the FTC would like to diminish the amount of deceptive advertising out there, it is not and in fact cannot be a ubiquitous enforcer. “We’re only going after the most egregious actors,” she said.
Engle, who is the FTC’s Associate Director of Advertising Practices, also said that media reports of $11K fines aimed at endorsers and bloggers were false.
The guidelines were published in an attempt to help the media and advertisers comply with Section 5, which basically prohibits deceptive advertising.
All paid commercial messages, she said, must be identified as such. But the onus is on the advertiser to make sure the media understands and complies with that obligation.
One of the biggest changes that did take place in the regulations concerns use of a disclaimer when a testimonial touts untypical results. Such an ad used to be legal if it simply said “results not typical.” Now, in addition to stating that certain results are atypical, the ad must disclose exactly what the typical results are that an average consumer can expect.
All advertising claims must be substantiated and backed up by fact.
It doesn’t matter what form the payment takes. If an endorser is compensated with goods or services of value, that still counts as a paid advertisement.
One gray area is the practice of sending a free product, or movie ticket, or whatever, to a given media outlet for review. There’s no problem with that – but Engle said if there was a continuous prolonged flow of goods followed by a continued and prolonged series of positive reviews, the FTC may step in to investigate.
As far as endorsers go, the FTC is much more likely to go after a celebrity or “expert” endorser. In the case of an average citizen selected or propped up by an advertiser to offer a testimonial, the advertiser would almost always be the entity targeted by the FTC.
And the form of the action would be an investigation which could lead to a settlement or lawsuit.
RBR-TVBR observation: It was great to get clarification that advertisers, not the media, bear ultimate responsibility for the veracity of their claims. Unless a member of the media is an egregious and frequent outlet for false claims, there is probably nothing to worry about.
Still, we would strongly advise all broadcasters to be acutely aware of the troublesome advertising areas. We write about them in this space all the time, and will continue to do so.
The key FTC concern is unsubstantiated claims – and Engle admitted that weight loss claims may constitute ground zero of that particular problem. Beware these types of ads, and stay away from them – especially if the buy requires your own on-air talent to state the claims.
