When the guidelines relating to the use of endorsements and testimonials took effect in late 2009, many online marketers and advertisers were left to wonder what the practical effects would be. Would the guidelines be enforced by the FTC? Would a slap on the wrist be the worst case scenario for online marketers not in the brick-and-mortar arena? Could online marketers claim ignorance or ask for forgiveness to avoid monetary penalties?
A recent Federal Trade Commission (FTC) announcement revealed that an online marketer has agreed to pay $250,000 for its deceptive representation that the endorsements, which were made by affiliates, were "independent" reviews of ordinary customers. The FTC's investigation found that the endorsements were in fact made by affiliates earning commissions with each click and subsequent purchase of the online marketers' goods.
Online marketers should take notice of this and ensure that the FTC Part 255 guidelines are followed, proper monitoring is performed, and clear and conspicuous disclosures are made where necessary. Traverse Legal's internet law attorneys can provide the advice necessary.