For the first time since 1980, the Federal Trade Commission (FTC) has revised the guidance it gives to advertisers on how to keep their endorsement and testimonial ads compliant with the FTC Act. The revisions of the FTCs Guides Concerning the Use of Endorsements and Testimonials in Advertising addresses endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. They affect testimonial advertisements, bloggers, and celebrity endorsements.
At least one of the revisions may affect lawyer advertising, whether it be print, online, radio or television advertising. Disciplinary Rule 2 101 (DR 2 101 (C. E.)) of the New York Lawyer’s Code of Professional Responsibility requires attorney advertisements to state that the “Prior results do not guarantee a similar outcome, where the advertisement contains (1) statements that are reasonably likely to create an expectation about results the lawyer can achieve; (2) statements that compare the lawyers services with the services of other lawyers; (3) testimonials or endorsements of clients; or (4) statements describing or characterizing the quality of the lawyers or law firms services.
This requirement seems to cover just about all lawyer advertisements. The FTC revisions (16 CFR Part 255), which state that endorsements and testimonials are considered identical for purposes of the regulations, removed the safe harbor of the 1980 version of the Guides which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as results not typical. Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.
The revision provides: If the advertiser does not have substantiation that the endorsers experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.
Thus a question arises: Will attorney advertisements that contain testimonials or endorsementsregarding the best results the lawyer or firm has ever receivedbe in violation of the FTC requirements if they do not clearly disclose the results that clients can generally expect in a given type of case or with a certain degree of injury? If so, this will give lawyers a lot more work and headache. How much information need be stated? Will a statement of a range of monetary results be required depending upon the nature of the liability and injuries involved with the client giving the testimonial? Of further concern is the rule that advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers.
Endorsers also may be liable for statements made in the course of their endorsements – the advertiser must possess and rely upon adequate substantiation, including, when appropriate, competent and reliable scientific evidence, to support such claims made through endorsements in the same manner the advertiser would be required to do if it had made the representation directly.
The revised Guides also add new examples to illustrate the long standing principle that material connections (sometimes payments or free products) between advertisers and endorsers connections that consumers would not expect must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other word-of-mouth marketers. The revised Guides specify that decisions will be reached on a case-by-case basis. Some examples included in the revision are, however, quite clear. For example, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.
Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement like any other advertisement is deceptive if it makes false or misleading claims. Celebrity endorsers also are addressed in the revised Guides. The revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
The revised Guides limit an advertisers use of an endorsement of an expert or celebrity only so long as it has good reason to believe that the endorser continues to subscribe to the views presented, and is virtually required to secure the endorsers views at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors products, and the advertisers contract commitments. When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given and the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product.