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Posts Tagged ‘Elizabeth Lordan’

FTC: There Have Not Been Any Cases Brought For Failure To Disclose

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FTC officials were very clear with PRNewser when we spoke with them after the agency released its “Guides Concerning the Use of Endorsements and Testimonials in Advertising” this past October.

Despite rumors of $11,000 fines for failure to disclose a paid relationship between a blogger/spokesperson/etc. and a brand, the agency reiterated to us then, and again this week:

They are not rules or regulations, so there are no monetary penalties, or penalties of any kind, associated with them. The purpose of the Guides is to help advertisers and endorsers understand federal advertising law and avoid violating it.

So, has anyone not followed the guidelines and therefore violated federal law? Not yet, according to the FTC. “There have not been any cases,” FTC Public Affairs Specialist Elizabeth Lordan told PRNewser this week.

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FTC Clarifies Blogger Guidelines: ‘We’ve Never Brought a Case Against Somebody Simply for Failure to Disclose’

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Since the FTC announced its revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” this past Monday, there has been much debate and discussion by advertising, PR, media and marketing professionals as to their ramifications.

There have also been many misinterpretations of the guidelines, namely that bloggers who fail to disclose relationships with advertisers or sponsors will be fined up to $11,000. Many blogs – PRNewser included – reported the $11,000 number.

So where did the misinterpretation come from? “$11,000 is what people used to have to pay when they violated a federal court order that resulted from FTC charges of deceptive advertising,” FTC Public Affairs Specialist Elizabeth Lordan tells PRNewser. “The current figure is $16,000. So the $11,000 figure is old information that used to be a part of the boilerplate in our press releases when court order violations were announced.”

Meanwhile, FTC assistant director Richard Cleland tells PRNewser that even the $16,000 number doesn’t apply. “It doesn’t matter whether it’s $16,000 or $11,000. The root problem here is that reports that there is a monetary penalty for violating these guidelines is untrue. The FTC does not have the authority to impose a fine for a violation to the FTC act,” says Cleland who heads the FTC’s division of advertising practices. “There is a provision that allows for a proceeding in federal court that allows for imposing of a monetary penalty for violation of trade regulation laws. The guidelines are not trade regulation laws.”

Cleland also said the blogger or endorser would not be fined, but the advertiser would. “We have never brought a case against a consumer endorser and we’ve never brought a case against somebody simply for failure to disclose a material connection,” he said. “Where we have brought cases, there are other issues involved, not only failing to disclose a material connection but also making other misrepresentations about a product, a serious product like a health product or something like that. We have brought those cases but not against the consumer endorser, we have brought those cases against the advertiser that was behind it. If people think that the FTC is going to issue them a citation for $11,000 because they failed to disclose that they got a free box of Pampers, that’s not true. That’s not going to happen today, not ever.”