Ad Watchdog Asks FTC to Take Action Against Influencers

Truth in Advertising sent a complaint after investigating the same 21 influencers the Federal Trade Commission had already warned about “deceptive” posts.

Brecken Branstrator brecken.branstrator@nationaljeweler.com

Madison, Conn.—Ad watchdog Truth in Advertising has filed a complaint with the Federal Trade Commission against a group of social media influencers it says have posted deceptive ads despite previous warnings.

Nearly two years ago, the FTC sent letters to more than 90 influencers and brands, reminding them about disclosure and promotions on social media.

The agency followed up with a second batch of letters in September 2017 to 21 of those influencers—a mix of actresses, singers, reality TV stars and individuals who made their names strictly as influencers—reminding them of their legal obligations and requesting information about their connections to certain companies.

Truth in Advertising (TINA) is now saying there has been no public action from the FTC on this front, leading it to launch its own investigation into the influencers’ Instagram accounts.

The list of influencers, who have a combined following of more than 220 million, includes actresses Vanessa Hudgens, Shay Mitchell and Sofia Vergara, singer Ciara, and socialite and TV personality Scott Disick, who was on “Keeping Up with the Kardashians” for years because of his on-again, off-again relationship with Kourtney Kardashian.

According to TINA.org, 20 of the 21 influencers “continue to violate federal endorsement guidelines” by not clearly and conspicuously disclosing their material connections—ranging from receiving free products to actual endorsement deals—to the brands in their Instagram posts. (The only one not included was Lindsay Lohan, though TINA.org noted that could be because the “Lindsay Lohan’s Beach Club” star wiped her Instagram account clean in October 2018.)

It compiled more than 1,400 “deceptive” social media posts promoting more than 500 brands published between May 2017 and December 2018. The violations in the posts, TINA said, range from “a complete lack of disclosure to burying #ad in the middle of a caption, making it easy to miss.”

Fashion and lifestyle blogger Rach Parcell topped TINA’s list, with 265 allegedly deceptive posts during the time period, followed by Hudgens (175) and Mitchell (140).

Based on its findings, the organization filed a complaint with the FTC on Monday, asking it to take “strict enforcement action against these repeat offenders.”

A TINA spokesperson told National Jeweler it would like the FTC to expand its investigation into the marketing tactics used by these social media influencers and “put an end to this ongoing and pervasive consumer deception,” and that it is “confident” the FTC will take action against these 21 individuals.

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The complaint and list of all 21 influencers can be found on TruthInAdvertising.org.

“It’s clear that these social media influencers do not take the FTC’s regulatory guidance seriously and continue to deceptively market goods and services to their fans,” TINA.org Executive Director Bonnie Patten said. “It is time that the FTC takes strict enforcement action against these repeat offenders.”

Earlier this week, FTC Chairman Joe Simons made a statement at the National Association of Attorneys General winter meeting indicating its commitment to enforcing truth in advertising laws about social media influencer marketing.

He said: “Truthful advertising will always be one of the FTC’s core missions, because it lets consumers make informed decisions. As online marketplaces and infomercials continue to flourish, we will continue to prioritize enforcement involving the inappropriate use of influencers, native advertising and consumer reviews.”

When asked by National Jeweler about the FTC Endorsement Guides members of the jewelry trade should keep in mind, Jewelers Vigilance Committee Senior Counsel Sara Yood said if a relationship exists between a brand/company and an endorser and marketer of its product, that relationship must be disclosed, especially if the relationship isn’t obvious. And it must be disclosed in such a way that is conspicuous to the consumer.

As TINA noted, these material connections can include a business or family relationship, monetary payment or the gifting of free product.

Yood also emphasized that the Endorsement Guides apply to both the brands and companies involved as well as the social media influencers and celebrities.

On Instagram, she said, disclosure should be done in the first few lines of the caption so users don’t have to click to expand the caption to see if it is sponsored.

The FTC also says that when multiple tags, hashtags or links are used, readers might skip over them, especially when they are located at the end of a long post, meaning that a disclosure placed in such a location is not likely to be conspicuous.

Truth in Advertising has an article outlining social media disclosure guidelines on its website.

Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.