The Federal Trade Commission, as promised, has tightened its standards for endorsements and testimonials in guidelines announced today and to be published shortly in the Federal Register. FTC gives an overview of the updates here. The guidelines are non-binding, but they represent FTC's interpretation of the law, so firms would be wise to color within the lines the commission draws.
A key departure from the last incarnation of the guidelines, published in 1980, is FTC's interpretation of how atypical results should be framed. Testimonials often represent atypical results, for example when the endorser claims he lost a great deal of weight, but the typical user loses a smaller amount. Until now, the FTC guideline allowed use of the disclaimer phrase "results not typical." Now, however, FTC expects clear disclosure of what the typical results actually are. FTC says:
"If the advertiser does not have substantiation that the endorser’s experience is
representative of what consumers will generally achieve, the advertisement should clearly and
conspicuously disclose the generally expected performance in the depicted circumstances, and
the advertiser must possess and rely on adequate substantiation for that representation."
Of course, "The Tan Sheet" offered a glimpse of these changes in March, when FTC issued a draft version of the guides. Sign up to subscribe or get a free trial here.
Another key change the new guide makes is acknowledging the rise of blogs, and explicitly identifying bloggers who promote a product as endorsers. They should disclose any material connection they may have to the company that sells a product they may endorse. Material connection can be payment, free products, royalties, etc.
Finally, the revised guide underscores FTC policy that celebrity endorser may be held liable for statements they make endorsing a product.
