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June 17, 2010

Breaking Down the New FTC Endorsement and Testimonial Rules in Layman’s Terms

Over the last several months, I’ve had numerous individuals e-mail me complaining they didn’t fully understand the new FTC Endorsement and Testimonial Rules, and how it applied to them.

That’s not surprising, since government rules and regulations at both the state and federal level are notorious for not being written in layman’s term.

With that in mind, I decided to write an article about the new FTC rules in language I’m sure everyone can understand. Let’s get started:

On December 1, 2009, new FTC regulations that govern the use of endorsements and testimonials to promote products went into effect.

FTC  regulations now require all endorsements to disclose any “material connection” between the vendor and the advertiser.

For example, suppose you are an affiliate marketer who owns a website that provides reviews of products that you promote. If your reviews about those products are favorable, by law, you must disclose the fact that you are receiving a commission from the sale of those products.

These new rules apply even if you receive a free or complimentary product and are asked to review it. Under the new FTC rules, you not only have to disclose the fact you got the product for free, the onus is on the vendor who provided the product to make a sincere effort to insure you make that disclosure.

In addition, under the new rules, advertisements featuring consumers that give the impression that his or her experience with a particular product or service is “typical” when that is not the case will be required to clearly disclose the “real” results that consumers can generally expect.

In other words, if you don’t have clinical data to prove or substantiate the type of results you claim consumers will generally achieve with your product, the FTC now offers you two alternatives — either furnish such data or stop using “success story” testimonials altogether.

To be fair, the FTC clearly states, the new rules are administrative interpretations of the law, intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves.

That means 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.In closing, while the burden of proof may indeed rest with the FTC, you also don’t want to give the Commission a reason to come after you either. I can assure you, a fight with the federal government and all its vast resources is a fight you can do without.

David Jackson is a marketing consultant, and the owner of – Powerful, free marketing tips to help grow your business.