Advertising Rules That Keep Influencers Out of Trouble With the FTC

Fashion Mingle invited Eldonie Mason, an entertainment, business and fashion attorney and owner of Mason Firm LLC, to be our legal expert during our Influencers Unscripted Panel & Networking Party held at LIM College during our NYFW Networking Week held in September. Mason shares valuable advice for Influencers who are working with fashion, beauty, and lifestyle brands to promote products.

FTC Guidelines for Influencers

Fashion influencers and influencer marketing have become a big business. The Federal Trade Commission (“FTC”) has noticed and is starting to take steps toward providing guidance on endorsements. The guiding principle of the FTC Endorsement Guides is truth in advertising. It doesn’t matter if it’s in traditional media such as television and a magazine or social media, the tenement is still the same.

Section 5 of the FTC Act prohibits deceptive advertising. There are no fines for violating the Act. However, if law enforcement actions are bought by the FTC, it can result in an order requiring the influencer to give up the money they receive from violations and abide by various requirements in the future. As such, you must always disclose a material connection even though it might be apparent to industry insiders or people who you are associated with. If an influencer receives payment and doesn’t disclose it would be deceptive.

The FTC is not necessarily monitoring individual influencers but if something comes to their attention, they will investigate it on a case-by-case basis. If needed, they can send a warning letter or bring an action against the brand or the Ad Agency. However, influencers are not off the hook. If it comes to the FTC’s attention that there are influencers who have a material connection to the brand and consistently failed to disclose this connection then the FTC can bring a claim against that individual influencer. In order to provide you with some guidance on what you can and cannot do when posting, here are some questions and answers to give you more clarity:

Common FTC Compliance Questions

1.      Do you have to mention that you received the item for free every time you post? No, not if a store is giving out free samples. However, if you were specifically contacted by the brand or the ad agency and given the item for free with the expectation that you will promote and discuss, you have to disclose.

2.      When does an influencer have to disclose the relationship with the brand? Every time there is a material connection, it must be disclosed. A material connection is a connection which might affect the weight or credibility that consumers give an endorsement. Material connections consist of a business or family relationship, monetary payment or the provision of free products to the influencer.

3.      Is there special wording to make the disclosure? Yes, your followers need to know if you have been compensated or receive the item for free. If you received payment you can include language such as “#Ad”, “Sponsored” or “Paid ad”. When you receive the item for free you can say “Sponsored”, “#Ad” or “Thanks ABC company for the free product”. If you are a brand ambassador, you can say “#ABC_Ambassador”.

4.      Where should the disclosure be located? It should be at the start of the post, especially if your post is long and collapses in the feed and you have to click to see the rest of it. Do not burry the disclosure among hashtags or hyperlinks.

5.      Is posting a disclosure on your home page enough? No, it’s not because people might not look at your home page. You must make sure the disclosure is near the post.

Five Best Practices for Disclosures

Here are five best practice tips for fashion influencers when making disclosures – as listed by the FTC. All disclosures should be:

1. Close to the claims to which they relate 
2. In a font that is easy to read
3. In a shade that stands out against the background 
4. For video ads, the disclosure should appear on the screen long enough to be noticeable, read and understood
5. For audio disclosures, read at a cadence that is easy for consumers to follow and in words consumers will understand

(Source: FTC)

Tips for hiring fashion influencers

1. If they’re making claims about a product you have to make sure to tell them that the claims must be substantiated; be sure to have guidelines on what they can and cannot say.
2. Tell your fashion influencers that it’s their responsibility to disclose their connection to you.
3. Periodically search for what your influencers are saying to ensure they’re in compliance with the FTC guidelines.
4. Check in with your influencers to ensure your guidelines are being followed and they are in compliance with the FTC; you’re looking for questionable practices.
5. Have a morals clause in your agreement so you can have an out in the event the influencer goes off the rails.

Key Takeaways for Fashion Influencers

Blow are four key takeaways from the FTC’s updated guidance for fashion influencers. Remember: disclose, disclose, disclose, disclose!

1. Clearly disclose when you have a financial or family relationship with the brand.
2. Don’t assume using the platform’s tool to disclose is sufficient.
3. Avoid using ambiguous disclosures such as #thanks #collab #sp #spon #ambassador, even if you see other fashion influencers doing so.
4. Don’t rely on a disclosure placed in an easy to miss location such as after the “click for more” link.

(Source: FTC)

Be sure to review this article often and abide by the FTC guidelines. Doing so will keep you off the FTC’s radar. Happy influencing!