PR Firm Settling FTC Charges of Misleading Endorsements

PR and marketing firm Reverb Communications will settle charges from the Federal Trade Commission stating that the firm posted reviews for a client on the iTunes store without disclosing that they were written by paid employees. In addition to citing Reverb, the FTC also singled out the firm’s owner Tracie Snitker. Reverb and Snitker are ordered to remove misleading endorsements and they’re barred from making further endorsements without proper disclosure.

“Companies, including public relations firms involved in online marketing need to abide by long-held principles of truth in advertising,” said Mary Engle, director of the FTC’s Division of Advertising Practices in the release detailing the settlement.

The FTC voted in favor of this settlement unanimously.

Tom Chernaik, founder of CMP.ly, which provides advertisers and bloggers with disclosure solutions, said the Reverb situation “reaffirms everything that the FTC has said to date” about the need for companies to be transparent.

“Fake reviews are obviously a large concern and the FTC has made it clear that paid reviews have to be disclosed,” he told PRNewser. “Both advertisers and their agencies are specifically responsible for proper disclosure. But in this case they didn’t even name the advertiser in the investigation.”

Create a social media strategy, launch your campaign, and track the results in our Social Media Marketing Boot Camp starting February 16. The online event and workshop will feature speakers including The Onion‘s Baratunde Thurston (left), Facebook’s Morin Oluwole, and bitly’s Tim Devane. Register now.