Introduction
The Federal Trade Commission (FTC) is a government agency tasked with protecting consumers from deceptive or misleading practices in commerce. As an influencer or content creator, it’s important to understand the regulations set forth by the FTC and how to avoid falling afoul of them. In this post, we’ll go over the common violations that the FTC may pursue and how to avoid them.
The FTC Act and Section 5
The Federal Trade Commission Act, specifically Section 5, prohibits “unfair or deceptive acts or practices in or affecting commerce.” This section of law allows the FTC to go after anyone who isn’t being transparent with their audience, such as failing to disclose a paid partnership or making false claims about a product. If your advertisement doesn’t clearly disclose that you are being compensated for promoting something, you could be at risk of being investigated by the FTC.
It’s a common misconception that the FTC only targets large companies and products. In reality, the FTC can go after any company or individual making false or misleading claims in their advertising, including small businesses and individuals just starting out. If you are running an ad on social media platforms like Facebook or Instagram and it contains false or misleading information about your product, even if you didn’t intend to deceive your audience, you could face consequences from the FTC.
Avoiding FTC Violations
To avoid getting into trouble with the FTC, it’s important to conduct thorough research into how they regulate advertising and what qualifies as “misleading.” You should also consider seeking legal advice from an attorney specializing in consumer law before creating any advertisements.
The FTC primarily enforces its laws through civil penalties, which means they can impose a fine without first going to court and giving you the opportunity to defend yourself. The amount of the fine depends on the severity of the violation and how many violations occurred. If you violate Section 5 of the FTC Act, you could be fined up to $40,000 per violation and up to $16,000 per day for each day that your deceptive act continues after receiving notice from the FTC that they have begun an investigation.
Disclosing Material Connections
As an influencer, it’s important to disclose any material connections you have with brands or advertisers to your followers. A material connection is any payment or gift of value that you receive in exchange for promoting a product or service. If you fail to disclose this connection, the FTC can fine you up to $16,000 per post.
It’s important to note that the FTC doesn’t just care about monetary compensation. They also care about free products, discounts on services, and trips taken by influencers to places where they have an opportunity to promote a brand in exchange for goods or services. This is known as a “material connection” and it must be disclosed to your followers. Failure to disclose a material connection could result in fines from the FTC, so it’s important to be transparent about your relationships with brands and advertisers.
The FTC requires that you disclose your relationship with a brand or advertiser in a clear and conspicuous manner. This means that you must use language that is easy to understand and that stands out from the rest of the content in your video or blog post. This can be done through the use of hashtags, such as #ad or #sponsored, or through the use of verbal disclosures, such as “I was paid to promote this product.”
It’s important to remember that the FTC requires that you disclose your relationship with a brand or advertiser at the beginning of your video or blog post, not just at the end. This ensures that your audience is aware of the relationship from the start and can make an informed decision about whether or not to continue watching or reading.
If you don’t disclose your relationship with a brand or advertiser, you could be in violation of the FTC’s regulations and may face penalties, including fines and legal action. To avoid this, be sure to follow the guidelines outlined by the FTC and disclose your relationships with brands and advertisers clearly and conspicuously.
If you’re unsure about how to disclose your relationship with a brand or advertiser, or if you have any questions about the FTC’s regulations, contact us at [email protected] We’re here to help you navigate the complexities of advertising and ensure that you stay on the right side of the law.
