FTC Releases Revised Guides for Endorsements, Testimonials in Advertising

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Can an advertiser be held liable for a blogger’s misleading statements about the advertiser’s products? What about the blogger?

Maybe, says the Federal Trade Commission, in releasing today its final Guides Concerning the Use of Endorsements and Testimonials in Advertising.

The revised guides will take effect on December 1, 2009. The proposed revisions were announced last November. (See Trade Regulation Talk story of November 21, 2008.)

Most of the revisions were adopted as announced at that time, with minor modifications.

The existing guides (16 C.F.R. Part 255) were published in 1980. The guides are advisory in nature and are designed to help advertisers avoid using deceptive testimonials or endorsements in marketing their products.

The revised guidelines address the role of blogs and other new consumer-generated media to market products and make other changes to bring the guidelines up to date.

Blog Endorsements

In discussing the role of blog endorsements in advertising, the FTC provides an example of a situation in which an advertiser would incur liability for a blogger’s misleading statements. Liability arises when an endorser-sponsor relationship is established.

According to the guides, an advertiser is subject to liability under Sec. 5 of the FTC Act for a blogger’s endorsement where:

 The advertiser initiates the process that leads to the endorsement (by utilizing a blog advertising service to locate a blogger who will promote the advertiser’s products on a personal blog or by providing products to a well-known blogger, for example);

 The advertiser requests that the blogger try a product and write a review of the product on the blog; and

 The blogger recommends the product using misleading or unsubstantiated claims (and not just the blogger’s opinion about subjective product characteristics).

The blogger would also be liable under the FTC Act if the blogger failed to adequately disclose any payment for services.

Non-typical Consumer Testimonials

The FTC has also decided to go forward with its proposed elimination of a safe harbor for non-typical consumer testimonials accompanied by disclaimers of typicality. The guides dating from 1980 allow advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical.” Starting December 1, advertisers will be expected to disclose “the generally expected performance in the depicted circumstances” under the revised guides.

The FTC’s proposal faced much resistance from the weight-loss products industry. Many advertisers in that industry had argued that they would not be able to determine what the generally expected performance would be in the depicted circumstances, and thus would not be able to use aspirational testimonials. (See Trade Regulation Talk story of July 22, 2009.)

According to the FTC, the effect of the revision is to treat ads that use testimonials the same as all other ads. Sect. 5 of the FTC Act requires advertisers to have substantiation for the messages that consumers reasonably take from their ads. The agency believes that an advertiser should not be exempt from those basic obligations simply because it used a consumer testimonial to communicate its claims.

The FTC’s notice of the adoption of the revised guides appears here on the FTC website.

The Guides Concerning the Use of Endorsements and Testimonials in Advertising, effective through November 30, 2009, appear at CCH Trade Regulation Reporter ¶39,038.

Advertisers' Use of Consumer Testimonials Debated Before Senate Subcommittee

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

A Senate subcommittee heard testimony today on a proposal by the Federal Trade Commission (FTC) to remove a safe harbor that has allowed advertisers to use consumer testimonials to tout weight loss and other products, even when the experience of the consumer is not typical. FTC Bureau of Consumer Protection Director David Vladeck delivered the Commission’s testimony before the Senate Commerce, Science, and Transportation Committee’s Subcommittee on Consumer Protection, Product Safety, and Insurance.

Last November, the Commission proposed revising its guides for endorsement and testimonial advertising practices to remove the “safe harbor” for disclaimers of typicality. It published the notice of proposed changes and request for comments on November 28.

Targeted by the revisions are testimonials, often used to promote weight-loss products, which usually include a disclaimer, such as: “Your results may vary.”

Vladeck said that these disclaimers do “not adequately inform consumers that the reported weight losses were, at best, outliers or extreme cases.”

As revised, the guides would call on advertisers using non-typical testimonials to make clear and conspicuous disclosures of generally expected results. The disclosures would level the playing field, according to Vladeck. Advertisers could not use testimonials with a disclaimer to avoid substantiation of their claims.

Industry Reaction

Industry representatives spoke out against the proposed changes to the guides, which have been in effect since 1980.

Jon Congdon--the president and co-founder of Product Partners LLC, a leading provider of health and wellness solutions sold under the brand name Beachbody—expressed “fear that the Commission’s proposal will have significant unintended and negative consequences for marketers and consumers.”

Congdon suggested that the Commission follow the “so-called 'net impression' rule in which they look at any advertisement, determine what it means to reasonable consumers, and then require substantiation of the claims that arise naturally from a commonplace interpretation of the advertisement.” This would allow the Commission to go after a marketer that uses a testimonial, even with a disclaimer, that gives a misleading impression of what the product or service is capable of doing, according to Congdon.

Greg Renker, a co-founder of Guthy-Renker--one of the world’s largest direct response television companies—supports clear disclosures under the existing guides. According to Renker it may be “difficult or impossible to say what the 'average' experience of a consumer” might be to satisfy the proposed guide.

Consumer Organization Support

Sally Greenberg, Executive Director of the National Consumers League (NCL), said that her consumer organization “fully supports the FTC’s review of and proposed changes to the Guides.” The NCL also supports the FTC’s efforts to require bloggers to disclose their relationship with companies that pay them to endorse a product or service.


The Guides Concerning the Use of Endorsements and Testimonials in Advertising appear at CCH Trade Regulation Reporter ¶39,038.