In its simplest form, the entire concept is this:

Advertising must tell the truth and not mislead consumers.
In addition, claims must be substantiated.

Readers should note that this does not reflect a change in the laws or regulation, but in the Guides to compliance as issued by the FTC.  The last time the FTC revised the Guides was 1980.  This latest revision goes into effect today, December 1, 2009.

The following News Release was issued by the Federal Trade Commission.  It is published here in its entirety.  The original can be found at http://ftc.gov/opa/2009/10/endortest.shtm

For Release: 10/05/2009

FTC Publishes Final Guides Governing Endorsements, Testimonials

Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements

The Federal Trade Commission today announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

The Commission vote approving issuance of the Federal Register notice detailing the changes was 4-0. The notice will be published in the Federal Register shortly, and is available now on the FTC’s Web site as a link to this press release. Copies also are available from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:

Betsy Lordan
Office of Public Affairs
202-326-3707

STAFF CONTACT:

Richard Cleland
Bureau of Consumer Protection
202-326-3088

(FTC File No. P034520)
(endorsement testimonial guide.wpd)

Smart companies still operate that way today, but there are those which have made it their practice to treat their customers like garbage.

Disposable clientele.

They believe that if that customer is not happy and decides to leave, they will just pick up another one or three to replace them.  And sadly, many times that is true.  With thousands of new people getting on line every day, it is not difficult to replace a customer or two.

But what these impersonal monoliths do not realize is that there are those of us out here who will not simply take their crap and move on.  We choose to warn others of our bad experiences.

We choose to stand up and fight.  We choose to spread our stories far and wide in the hopes that someone else can avoid repeating our mistakes.

For that purpose, I have established this website as a digital soap box.  I have a handful of customer service nightmares of my own to post here, and I will be partnering with other consumer advocacy sites to bring you more comprehensive information, but I want to hear your stories.

I am offering you a place to voice your complaint and strike a blow against unfair practices, bad customer service, and in some cases outright fraud. I will also be providing how to articles and links to resources where you can initiate effective consumer complaints, such as the Federal Trade Commission, your State Attorney General, various Better Business Bureaus and the like.

What can you or I do as one person?  Very little.

What can you AND I do, along with a few hundred thousand like minded individuals who are sick of being pushed around?  We can spread the word about these companies who choose to mistreat their customers and convince others to avoid putting themselves in the same situation.

Together, we can strike a blow against indifference and bring customer service back!

This site is in its infancy.  I am still working on a lot of the functionality, including the submission form, but you can submit your story for possible inclusion through our Contact Us page.  Make sure to include as much detail as possible, and be prepared to back up your claims.  I am not interested in undocumented bashing, because that does not do any good.  I want dates, names, and specific details.  Don’t worry if you are not a writer.  Submit your story and I will edit it for clarity.  I may need to contact you for more information before publishing. So, go ahead, click here to submit your story.

Make sure to bookmark the site and come back often to check up on the latest warnings.