Blog

By Purple Fox Legal

March 16, 2022

The Federal Trade Commission, or FTC, is a federal agency tasked with protecting and improving the experience of the consumer. While the role of this organization is often overlooked and misunderstood, the FTC is mostly responsible for keeping the consumer market balanced by preventing “fraudulent, deceptive, and unfair business practices.” Basically, it serves as a federal watchdog for both consumers and businesses to ensure the market remains balanced, fair, and honest. 

In recent years, social media influencers have found themselves having to navigate the, sometimes confusing, regulations set by the FTC. This is because a growing number of these entrepreneurs have contracted with brands and businesses to help endorse their products. In this article, we’re discussing everything social media influencers need to know about FTC guidelines and ways that you can ensure you’re staying on the right side of the law. 

What Influencers Should Know about FTC Disclosures

Influencers who receive financial compensation for promoting a product, endorsing a brand, or advertising for a business should familiarize themselves with FTC guidelines. That’s because certain disclosures and notices may be required to stay within the bounds of the law. Put simply, when it comes to influencer marketing, social media influencers are required to reveal their relationships with brands and businesses to their followers. This keeps the message honest and transparent, while still acknowledging the professional and financially beneficial relationship that exists.  

In many cases, FTC disclosures are mandatory and non-negotiable. Understanding them and using them appropriately and in the right situations is also the influencer’s responsibility. Let’s talk about all you need to know about these disclosures to ensure you’re using them correctly. 

When Should Influencers Include FTC Disclosures?

The most important aspect of FTC disclosures, and the reason for their existence at all, is to ensure consumers know that an influencer has been compensated for a product endorsement. And, compensation isn’t only limited to money. Any relationship, including a financial, employment, personal, or family relationship with a brand must be disclosed by the influencer. If anything of value was received by the influencer, the relationship must be disclosed to their followers. And, regardless of the number of times a social media influencer has worked with a brand, they should never assume their followers know about that relationship. This means that FTC disclosures are required for each and every endorsement, whether it’s your first or 50th. 

The most important aspect of FTC disclosure for influencers is that consumers should be made aware of influencer relationships with brands and the compensation they might receive by endorsing them. This allows followers to weigh all aspects of that endorsement before making their final purchasing decision.

How to Ensure Your Disclosure is Simple and Clear Enough

It’s not enough for a social media influencer to simply reveal an existing brand relationship to their followers. They must also do so in a way that’s clear, simple, and hard to miss. The FTC says the most important aspect of the disclosure is that consumers see and understand what it means. Some of the best ways to ensure that this is the case are for influencers to:

• Include the disclosure in the same post as the endorsement (not only in a generic ‘About Me’ or profile page where it might be missed)
• Never mix the disclosure in with a group of hashtags or links
• Ensure followers have enough time to notice and read the disclosure
• Include the disclosure in with video content, not just in the description of it
• Repeat the disclosure often during live streams
• Avoid vague or confusing terminology like “sp.” “spon” or “collab” as standalone disclosures

Understanding the Consequences of Noncompliance

As mentioned above, adhering to FTC guidelines is an influencer’s responsibility. And, failure to disclose endorsements that support an existing relationship or financial gain can result in some serious consequences. In a recent publication written by the FTC, it was stated that endorsements that are “fake” or fail to disclose an existing connection/relationship with a brand are at risk for civil penalties of up to $43,792 per violation. Influencers also risk any future opportunities to work with brands by not adhering to FTC guidelines. 

As a social media influencer, it’s extremely important to stay educated and up-to-date on FTC guidelines and recommendations. However, navigating the legalities of online advertising can be difficult. To learn more, and ensure you’re staying within the bounds of the law, consider reaching out to an experienced attorney.