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Pay attention to the FTC’s new rules

Internet Marketing, Online Issues

As of December 1st, the new FTC regulations came into effect and these regulations will directly affect you if you sell products online.  The FTC guidelines are online now and you will want to read and understand how these guides govern endorsements and testimonials affect bloggers and website claims.

Clearly, testimonials can help bolster your product and service advertisements.  But take care that when using testimonials that convey an experience with a product or service that the claim being made is provable — that is, simple disclaimers that state “results are not typical” will not be enough to satisfy the FTC Act.

Additionally, material connections between advertisers and endorsers must be disclosed.  That is, the post of a blogger who endorses a product and also receives cash or in-kind payment to review a product is considered an endorsement and the connection must be disclosed.  Likewise, if a company refers in an advertisement to findings from a research organization that was sponsored by the company, this relationship must be disclosed.

Even celebrity endorsements are affected by the new FTC Act.  Now both the advertiser and the endorser may be liable for false or unsubstantiated claims made in the endorsement or for not disclosing material connections between the advertiser and the endorser.

The FTC provides a 12-page FTC Guide that outlines the new regulations and give clear examples that will help you comply with the new FTC Act.  It would be a good idea to take the time to read this document as it may affect how the FTC views your online presence.

Bloggers and forum managers may have difficulty with this new Act if they allow comments to their postings or aren’t careful watching forum participants.  An example offered in the guide tells of a discussion about a particular MP3 music download technology that is the focus for several posters and one of the posters is an employee of a manufacturer of products under discussion.  The FTC Guide states, “Knowledge of this poster’s employment likely would affect the weight or credibility of his endorsement.  Therefore, the poster should clearly and conspicuously disclose her relationship to he manufacturer to member and readers of the message board.”

The problem is that a blogger or forum monitor may have difficulty identifying an anonymous poster’s background and connection to the product’s manufacturer.  The burden, then, in the example given seems to be on the poster to make the proper disclosures.  Will this happen?  I’m not convinced that it would — and if not, what are the consequences.

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