The Federal Trade Commission (FTC) is an important agency that defends consumers. It stops dishonest and false advertising. Influencers of any following size should be aware of the FTC and its authority before it is too late. The FTC has the authority to hand out fines and penalties to anyone they believe are engaging misleading tactics.
It was created in 1914 to protect consumers from harmful and deceptive business practices. In the past businesses had an unfair advantage by promoting dishonest claims about their products or services. The FTC was created to bust this up and make sure that the consumer was protected by knowing the truth about goods and services.
What can the FTC do to an Influencer?
The FTC has the ability to fine not only companies but also people for breaking the rules. The penalties can be severe and expensive per violation. If you are in the crosshairs of the FTC, they will want to know what type of relationship you have with the brand you are promoting, whether it be by payment in cash or by product. If you are not honest, you could face more fines and other legal problems.
Crossing the FTC can also harm your reputation. The last thing you want to be is known for being a liar to your followers. Influencers depend upon their reputation and connections with their followers in order to sell products and services. The FTC could tell you to stop the dishonest campaign and also make an official statement to your followers that you were deceptive and lied. This could significantly harm any future work with brands because your reputation will be damaged.
What are the FTC rules?
Influencers must follow the FTC’s rules. Remember, these rules were made to protect the consumer from false and deceptive advertising. Here are some basic rules to remember:
Disclosure of material connections: Always declare any relationship you have with a brand. Examples of relationships are: if you get paid in cash or free product, if they give you a discount code, or a commission. You must also disclose if you are related to the owner of the business you are promoting.
Always, be honest and be transparent. Never make false or misleading claims about the products. For example: don’t say that you use the product and you lost 50 pounds if you have never used it.
Use #sponsored or #ad hashtags. These must be seen on the main page or captions without having to scroll down to see it. It cannot be placed in the comments. It must be clear that this is sponsored content.
Never make any health or medical benefits if there is no scientific data to back it up.
How much can I be fined?
As of this publication, the FTC can fine a person PER VIOLATION $46, 517. So if you have placed the content on several social media platforms, you could easily be facing over $100,000 that will be owed to the FTC.
Conclusion
It is important that influencers are aware of the potential consequences of not abiding by the rules of FTC. Remember the negative impact could be a hefty fine and an irreparable harm to your reputation that could ultimately end your influencing career. For more information, you can visit the website of FTC at https://www.ftc.gov/ for further information on their rules for social media.
