New FTC Endorsement Rules

There has been a lot of buzz regarding the new FTC endorsement rules, so I decided to dig down deep and see the actual notification by myself. The new FTC Endorsement rule will be in effect from December 1st 2009. So read it, consult your lawyer and make changes to your disclaimer or the way you promote or endorse affiliate product..wonder where its gonna end..The new FTC endorsement rules covers almost everything.

The new FTC endorsement rules cover all sorts of third party testimonials and endorsements—by consumers, experts and celebrities. If your promotions use customer or consumer endorsements, the FTC requires that the results described must be typical or, if not, you should “clearly and conspicuously” disclose that the results presented are not typical. Also, such customers should be “bona fide” buyers of your product, and not, for example, a fictitious person or your cousin who is doing you a favor. For expert endorsements, the person involved should have special knowledge that qualifies him or her to make the endorsement, e.g., if you use a doctor to sell a diet plan, that doctor shouldn’t be an eye doctor, but have special knowledge in the area of nutrition.

FTC requires all endorsements to disclose any “material connection” between the vendor and the advertiser. For example, if an affiliate runs a website offering an “independent review” of two products and gives a favorable review of one, they should disclose the fact that they are receiving a commission from the sale of that product. These rules also apply to third parties, such as bloggers, who receive a free product and are asked to do a review. Under the new FTC rules, not only should the blogger disclose he got the product for free but the vendor who gave him the product should make some effort to make sure that the blogger makes that disclosure.

So does that mean an end to “Super Hyped Testimonials” or Floggers (Fake Bloggers Endorsing Products), I guess so. Also what really surprises me is that I actually have to purchase a product before I can endorse me..Does That Make any sense?

Well, here is the latest FTC Notification from there official website website:

For Release: 10/05/2009

FTC Publishes Final Guides Governing Endorsements, Testimonials

Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC’s Web site as a link to this press release. Copies also are available from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Betsy Lordan
Office of Public Affairs
202-326-3707

STAFF CONTACT:

Richard Cleland
Bureau of Consumer Protection
202-326-3088

(FTC File No. P034520)

Taken from http://ftc.gov/opa/2009/10/endortest.shtm