FTC endorsement guide revisions to reflect new marketing

By Lorraine Heller

- Last updated on GMT

FTC endorsement guide revisions to reflect new marketing
The US Federal Trade Commission (FTC) is preparing final recommendations on a review of the use of endorsements in product advertising, which it hopes will address the continuing problem of deception in a significantly changed marketing environment.

FTC adopted its guidelines on the use of endorsements in 1980. However, the Senate heard this week that commission staff is analyzing comments to proposed revisions that would update the guide.

“Although the basic principles of the Guides still hold true, dramatic changes have occurred during the last three decades in how products are marketed – most notably, program-length infomercials, internet advertising, word-of-mouth or viral marketing, and consumer blogs have all become commonplace,”​ heard the Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance.

Endorsements and testimonials, which are widely used in the marketing of dietary supplements and some functional food products, are advertising messages that consumers are likely to believe reflect the honest opinions or experience of a third party.

Disclaimers

“The Commission’s enforcement history with false or deceptive advertising using consumer endorsements, as well as its own research, have made it increasingly clear that in one key aspect – disclaimers of typicality – the Guides are not working as intended to prevent consumer deception.”​ David Vladeck, director of the FTC’s Bureau of Consumer Protection told the Senate committee.

Based on consumer research conducted by FTC on the messages conveyed by product endorsements, the agency found that many consumers believed that at least half of product users would achieve results similar to those stated in the ads.

However, when actual expected results were disclosed, consumer expectations were “significantly altered” ​on whether the endorser’s experience of a product was representative.

Weighty deception

Weight loss is an area ripe with endorsement deception, said Vladeck.

A 2002 FTC report entitled Weight-Loss Advertising: An Analysis of Current Trends,​ which reviewed 300 weight loss ads, found that two-thirds used consumer testimonials and those “rarely”​ described realistic achievement. Instead, said Vladeck, they proclaimed “extraordinary”​ weight loss.

Of the ads featuring testimonials, 30 percent reported weight losses exceeding 70 pounds, while 20 percent reported losses of more than 100 pounds.

“In many instances, the testimonials reported results that, in all likelihood, are not achievable – e.g.​, weight loss of nearly one pound daily for two or more weeks. With few exceptions, advertisers did not disclose the actual weight loss consumers could expect to achieve with the product.”

He added that commonly-used disclaimers (e.g.“results may not be typical”​ or “your results may vary”​) did not adequately inform consumers that the reported weight losses “were, at best, outliers or extreme cases.”

Changes expected

One of the most controversial revisions proposed to FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising is the removal of this ‘safe harbor’ statement for disclosure of atypicality.

Such statements were designed to be used together with atypical result testimonials in order to clarify the generally expected results.

However, Vladeck said that “if the advertiser cannot substantiate [a] claim, a fine print or fleeting superscript disclosure of atypicality is unlikely to cure the deception”.

Despite FTC’s proposal to remove the ‘safe harbor’ statement, it does not bar the use of these disclaimers. Instead, it “makes the advertiser responsible for ensuring that consumers are not misled by the ad in its entirety.”

Another controversial proposed revision is the inclusion of consumer-generated media in the remit of FTC’s guides.

“Admittedly, the issues are difficult and complex, and the Commission will give careful consideration to all of the comments received before it issues revised Endorsement Guides sometime later this year,”​ said Vladeck.

To read the NutraIngredients-USA.com article on FTC’s enforcement priorities, click here​.

Related topics: Regulation

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