FTC Guidelines on Endorsements and Testimonials - Analysis

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This article addresses issues relating to the Federal Trade Commission's recent issuance of new FTC administrative Guidelines pertaining to endorsements and testimonials, relied upon by consumers, in the course of marketing various products or services. On October 5, 2009, the Federal Trade Commission published a notice that it is adopting revised Guides Concerning the Use of Endorsements and Testimonials in Advertising. The revised Guide basically updates the earlier Guide with particular attention to the use of endorsements, and testimonials on blogs, in word-of-mouth advertising campaigns and on new media platforms, and becomes effective December 1, 2009.

The new "Guide" will impact direct selling, network marketing, MLM and party plan companies, but there is overlap from previous FTC enforcement. The Guide does not change the duties of the company in ads that make earnings claims or product claims. If earnings claims are made, the FTC has long ago contended that such claims were deceptive unless accompanied by average earnings disclosures. If product performance claims were made, the FTC demanded that the company be able to substantiate the claims and to disclose expected typical results of consumers of the product or service.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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