The Federal Trade Commission recently announced a series of guidelines to help verify that online endorsements are honest. The guidelines are aimed at preventing companies from trying to game the online ratings systems. Consumers often look at company sites and a wide array of social media sites to see what kind of reviews the products and services are getting.
Because consumers rely on online comments and ratings, many companies try to post favorable comments and try to increase the good/recommended scores. Sometimes the company being reviewed hires people to post anonymously. Sometimes, the company pressures employees to post “likes” and other favorable
The FTC regulates deceptive business practices. The federal agency works to make sure the phrase “Truth-in-Advertising” has real value for consumers. Endorsement should be honest. Part of the FTC’s truth duties are to regulate Internet reviews and rating systems. The new FTC endorsement guidelines were revised in September, 2017.
The key component of the new guidelines is that reviewers should disclose whether they have any interest (direct or indirect) in the products or services they are endorsing. Consumers shouldn’t have to guess whether the reviewer has a connection that would make their endorsement review not credible.
People who review doctors or medical products should disclose:
- If they are related to the doctors or products
- If they are friends with the physicians or medical products
- If they have a financial interest in the person, company, or product
The same disclosure policy applies to hotels, books, music albums, restaurants, and just about anything that is bought or sold.
The guidelines are very specific in many respects. For example, Tweets that begin with #ad are considered effective. Tweets that end with the word ad are not likely to be noticed by the consumer. Words such as #ambassador are too vague.
Advertising health products online? Check FTC endorsements guides on testimonials and endorsements, as FTC enforcement action can come with huge penalties.
An experienced and respected FTC healthcare lawyer will review the overall basics of the new guidelines and how they apply to your business.
- Honesty. The opinions, experience, and beliefs of the endorser should truly reflect their opinion. Endorsements should not set forth a representation (express or implied) that would be deceptive if the company/advertiser made it.
- Accuracy. The endorsement can’t be twisted though so that a reader gets a mistaken reading. Advertisers can use celebrity or expert endorsements – provided they were made by the celebrity/endorsers and that the endorser reasonably believes that the endorsement is still true. To protect themselves, advertisers should regularly obtain updated endorsements – especially if the product has been materially altered or there is new information/statistics about the product’s effectiveness.
- Usage. If the endorser says he/uses the product – the endorser should be a bona fide user – as of the time of the endorsement. Advertisers should not run the endorsement if they reasonably believe the endorser no longer uses the product.
The FTC website provides many examples of proper and improper endorsements. One example is:
A paint company gets an endorsement from a building contractor who uses the company’s paint. The builder likes it because it dries fast and is durable. If the company changes the paint formula so only one coat is needed to cover exterior surfaces, it needs to contact the builder and have him/her review the newly formulated paint.
Endorsements by consumers
- Scientific validity. Endorsements about how well a product performs implies that it was tested scientifically. If the advertisers said its products performed well, viewers and readers will naturally assume some sort of test had been done which analyzed the product’s functionality, durability, and other performance factors. Generally, consumer endorsements are not scientific. If an endorser says the product performs well, at a minimum a consumer would assume that the product performed well for the purpose displayed or depicted.
- Experience of the consumer with the product/service. When viewers/readers see an endorsement by a consumer that a key part of the product/service works well – they will normally think that consumers will normally have the same good experience. Advertisers should substantiate this type of endorsement representation before airing it to the public. Advertisers who don’t have this substantiation should clearly disclose what the “generally expected performance” is likely to be in the depicted setting – if the advertiser can adequately support that expectation.
- Actual consumer. If an advertiser implies or represents that an endorsement was by an “actual consumer,” then the consumer should be a true actual consumer. Otherwise, the advertiser should disclose the endorser isn’t an actual consumer.
Endorsements by experts.
In ads that imply or directly state the endorser is an expert, then the endorser should have the necessary expertise. The expert evaluation of the product’s characteristics should include an examination of the product or product testing comparable to what someone with the same expertise would have conducted. If the expert claims the product is superior to others, that finding must have merit.
For example, if an engineer endorses an automobile and implies that he/she has the skills to review the design of cars - then the engineer must have those skills. Chemical engineers aren’t qualified to evaluate automobiles for design.
If an organization endorses a service or product, the endorsement suggests that all the members (or a majority) agree with the endorsement – and not just one individual member. The new FTC online endorsement guidelines require that the process of obtaining an organizational endorsement must clearly indicate that the endorsement represents the collective judgment of its members. If the endorsement suggests the organization is an expert, then experts within the organization or hired by the organization must have tested and evaluated the product/service.
Example. A mattress company advertises that a chiropractic association endorses its mattresses. Since consumers would logically assume that the chiropractic association is an expert regarding the quality of mattresses, expert(s) recognized by the organization must have examined the mattress. The FTC guidelines also include other approval review criteria.
The Federal Trade Commission (FTC) settled a $2 million complain against "an operation that allegedly used fake news websites to deceptively market acai berry weight-loss products."
Proper disclosure of a material connection
If a connection between the product/service seller and the endorser exists – that could affect the credibility of the endorsement, that connection should be disclosed. For example, if the endorser is someone known to the public or someone the public might think is an expert – then any payments or promises of payments to the endorser (prior to the endorsement) should be disclosed. The FTC provides numerous examples to help clarify when disclosures must be made and how they should be made.
There are many other guidelines an experienced FTC online endorsement lawyer can explain so that your company can address these new marketing and advertising issues.
Additional endorsement issues to review with an FTC endorsement attorney
Your FTC marketing endorsement lawyer will review many issues with you to help you comply with the new guidelines. Some of these issues are:
- Who is covered by the new guidelines? The FTC rules apply to all business, organizations, and individuals that use or make endorsements on social media platforms. The guidelines cover most, if not all, types of Internet social media sites including Facebook, Instagram, Snapchat, and Twitter. Endorsements include images (showing use of the product/service), text (reviews, comments, and testimonials), and Facebook likes and shares. Just posting a picture of yourself with a product may be considered an endorsement
- What weight do the guidelines have? The new FTC guidelines are not regulations – meaning there is no civil penalty nor any fines for non-compliance. The guidelines are essentially instructions for what the FTC will consider fair advertising. Failure to follow the guidelines can result in an FTC investigation or a compliant of unfair or deceptive practices. Warning letters and formal complaints, based on the new guidelines, are already being sent by the FTC.
- Common red flags. The guidelines account for many common red flags. For example, if representations are made in the part of the post that viewers normally read, then the disclosure should be in that same part. Disclosures should not be placed in text or graphic areas that readers usually skip over. Examples of misleading endorsements including:
- Saying you used a product when you never did
- Claiming something that simply doesn’t makes sense – this pill will raise your IQ 20 points
- Not backing up claims with scientific proof when the endorsement implies that scientific tests were done
- How should the disclosure be made? Disclosures should include that the endorser got a free copy/sample, was paid, is related to a company owner, works for a company, or owns the company. Saying something such as – The medical spa gave me a free sample of their skin care product and I loved it communicates the connection to the spa – could qualify as a proper disclosure if placed correctly.
Disclosures are required to be conspicuous. In general, this means the disclosure should be near the endorsement. It should be easy to read. It should stand out. It should be easy to understand and notice if it is part of an audio ad, a video ad, or an online ad.
FAQs about the guidelines
The FTC provides Qs and As about the new endorsement guidelines. Some of the summaries of these questions and answers follows:
- Is social media covered? The endorsement guides apply to social media including social media and blogs.
- What are the rules for blogging? While consumers should take blog comments with a grain of salt – do additional homework to determine if products or services have quality – readers still have the right to know which bloggers are giving their real opinion and which ones are being paid for their opinions. Bloggers are held to the same standard as reviewers on TV, radio, the written press, and other media. The bottom line is that the reader should be clear whether an opinion is credible. Bloggers, generally (with some exceptions), don’t have to disclose whether they are paid or not for reviewing products on their own site. They do, have to disclose a connection if the blog is on a sponsor’s site.
- Do small incentives constitute a material connection? Even a dollar-off coupon or a sweepstakes entry can require a disclosure if the benefit affects the credibility of the endorsement/review/comment/like. If the sponsor agrees to make a donation to charity for a review, that donation may require a disclosure if, again, the donation affects the credibility of the endorsement. The same concept applies to endorsements from reviewers who:
- Get to use a product for a period of time.
- Get a free meal
- Other examples set forth in the new FTC online endorsement guidelines
Medical practices, like most businesses, are very competitive. Doctors, hospitals, and medical providers are in a constant struggle to get new patients. Many healthcare providers now have their own websites. Medical spas, plastic surgery practices, orthopedists, cardiologists, chiropractors, general practitioners, and others seek testimonials from their patients.
Social media sites like Yelp constantly review the experience the patient has at the doctor’s office. New patients are continually looking for answers to these questions. Did the doctor listen? How long did you have to wait? Was the staff courteous? How well did the doctor treat your problems?
Physicians and other health providers need to understand which endorsements are legitimate and which ones can jeopardize their practice. They need to understand that giving a patient a free sample or a discount in return for a Botox injection or other medical services is not likely to be considered a legitimate endorsement by the FTC – unless there’s a proper disclosure.
A trusted FTC healthcare marketing and advertising lawyer will guide you through the complexities of the new guidelines.
- The new FTC guidelines affect online marketing and advertising
- Endorsements should be credible. This means any material connection between the endorser and the advertiser should be disclosed
- Disclosures should be conspicuous and easily understood
- Failure to comply with the guidelines can result in FTC warning letters and investigations
Speak with a veteran FTC unfair and deceptive advertising lawyer today.
Patients and other health providers do read and value online opinions and comments about your business. It’s right to want new customers and people who might refer you business to know the quality work you do. There are lines that can’t be crossed. Your marketing and advertising must be honest. The FTC wants the public to make credible decisions based on the merit of your products and services – not on endorsements that aren’t credible.
To learn more about how the new FTC online endorsement guidelines affect your marketing, Contact Michael H. Cohen Law Group. Our FDA and FTC lawyers have a strong record of helping medical practices function legally in the digital age.