Categories


New FTC Rules as of December 1, 2009

FTCThe Federal Trade Commission (FTC) has updated their guides regarding ‘endorsements’.  These new regulation will go into effect December 1, 2009. This guide – last updated in 1980 – not only addresses the disclosure of connections between advertisers and endorsers but also the endorsement of products by . . .

  • Consumers
  • Experts
  • Organizations
  • Celebrities

How does this effect me?

This comes into play if you are using ‘ third party testimonials’ of products or affiliates through the use of endorsements. The old regulation allowed you to use a testimonial in promoting a product or affiliate where by the results or statements stated may have been ‘unusual results’ – not the norm. This was permitted as long as it was clearly stated that the results are not ‘typical’. However, this type of recommendation with ‘disclosure’ is no longer an acceptable ‘safe harbor’. The new FTC rule requires that an experience or recommendation disclose the actual result that the consumer can generally expect.

Who can endorse?

Any ‘customer testimonial’ should come from a real ‘bona fide’ buyer or consumer of the product – not a fictitious person or a relative simply ‘doing you a favor’.   An expert testimonial should be from a person with expert knowledge qualifying them to make such a statement.  The new regulations even go so far as to require the expert be an expert in the subject field. For example, you couldn’t have a foot doctor endorsing a product to ‘make your hair grow’.

Do I have to disclose compensation?

As an advertiser or affiliate marketer, you are also required to disclose any ‘material connection’ or compensation you may receive from the vendor. This rule applies to both websites and blogs. If a website is offering reviews of two products where they are getting paid by the vendor receiving the favorable review, the website would have to disclose that they are receiving compensation from the vendor with the favored product. Whereby bloggers that receive free products and then positively ‘blog’ about them are also required to disclose their connection with the vendor . . . regardless if they are receiving the product for free or are paid for their opinion. In a case where the blogger receives the product for free, the vendor is also expected to make an effort to see that the blogger makes disclosure.

Summary

This is a general overview of the new FTC rules and is not intended to be a complete presentation of the regulations slated to go into effect on December 1, 2009. If you would like to read more about how these rules will effect those here in the US and those doing business in the US, please visit the FTC website at http://ftc.gov/opa/2009/10/endortest.shtm.



Comments are closed.