FTC New Rule: Bloggers Must Disclose Compensation
If there’s compensation for reviews or testimonials (including money or free products), such payment must be disclosed under new Federal Trade Commission (FTC) guidelines. Equally important,
“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.”
Note that the FTC can hold both the endorser and the advertiser liable for false claims, unsubstantiated claims, or failing to disclose the compensation.
This is long overdue from a consumer protection standpoint. Those who use flogs, phony review websites, and cooked up testimonials are on notice that the FTC will not tolerate this nonsense in the future. It will also set the bar higher for affiliate status disclosures.
Unfortunately, it will take some expensive lawsuits and a few info product marketers going to jail before the new reality sets in. The federal government is taming the Internet Wild West. Cyber-Deadwood is becoming civilized whether it wants to or not.
Recommended Reading: FTC Publishes Final Guides Governing Endorsements, Testimonials
About the Author
With an advanced international law degree from Georgetown University and more than 15 years of real world legal experience, Attorney Mike Young is President of the Internet Ethics Council and creator of Website Legal Forms Generator software. He helps entrepreneurs protect and grow their businesses online.
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Re: “Those who use cooked up testimonials are on notice that the FTC will not tolerate this nonsense in the future.”
It sounds like they are coming down on real testimonials too.
If I really have customers who used my products and principles and earn a million dollars, what wording would you suggest I put near that testimonial to explicitely state that these results are not typical.
Would you just suggest not using effective testimonials at all anymore? (Effective = testimonials with specific results.)
Hey Mike,
Where do you think is the best place to put the “i make money for telling you about this” disclaimer as well as the
“the results shown on this page are extreme. most people won’t make any money with this” disclaimer.
Are you planning on updating your tos package you sell to comply with new FTC regulations if I decide I want to buy it from you?
Thanks,
Jason
Will be providing comprehensive analysis of this issue with recommendations early next week. Stay tuned.
Best wishes,
-Mike