SAY GOOD BYE TO "RESULTS NOT TYPICAL": THE FTC PROPOSES REVOLUTIONARY CHANGES TO ITS GUIDES CONCERNING THE USE OF ENDORSEMENTS AND TESTIMONIALS IN ADVERTISING

The FTC recently proposed significant revisions to its endorsement and testimonial guides that if implemented, will greatly impact advertising utilizing testimonials. Under the proposed revisions, if the advertiser does not have substantiation demonstrating that the results depicted in a testimonial are typical, the advertiser is required affirmatively state the typical experience or otherwise have its own empirical data demonstrating that consumers understand the limitations of the testimonial. The FTC is seeking public comments on the proposed guidelines, published in the Federal Register and available here, by January 30, 2009.

The current FTC Endorsement and Testimonial Guides, last updated in 1980, provide standards for advertisers utilizing endorsements and testimonials to confirm advertising practices to the requirements Section 5 of the FTC Act. Among other things, the Guides define both endorsements and testimonials broadly to mean any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser. The existing Guides provide that an endorsement must reflect the honest opinions, findings, beliefs, or experience of the endorser, and that the endorsement may not contain any representations that would be deceptive, or could not be substantiated, if made directly by the advertiser.

Moreover, the FTC has long maintained that an advertisement utilizing a consumer testimonial on a central or key attribute of a product will be interpreted as representing that the endorser's experience is representative of what consumers will generally achieve and if the advertiser does not have adequate substantiation that the endorser's experience is representative, the advertisement should clearly and conspicuously disclose either what the generally expected performance would be in the depicted circumstances or the limited applicability of the endorser's experience to what consumers may generally expect to achieve. The latter disclaimer of typicality is usually depicted in an advertisement as "Results not typical. Individual results will vary" or something to that effect.

Key Proposed Revisions to the Guides

In January 2007, the FTC sought comments on proposed modifications and updates to the Guides. On November 21, 2008, the FTC announced its proposed revisions. Among the most important proposed changes, the FTC seeks to change the disclaimer of typicality based on the conclusion that testimonials reflecting consumer experience on a key attribute of a product are likely be interpreted as representing that the person's experience is representative of what consumers will generally achieve. In proposing to revise the Guides, the FTC seeks to require that non-typical testimonials on a key aspect of the advertised product must be accompanied by clear and conspicuousdisclosure of the generally expected results. An advertiser that continues to rely on a disclaimer of typicality must possess reliable empirical data demonstrating that the typical consumer net impression of the advertisement with such a disclaimer is non-deceptive.

The FTC has also proposed a provision that sets forth the specific position asserted by the government in law enforcement actions: 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; and that endorsers may also be subject to liability for their statements.

If the Guides are revised as proposed, marketers of health products, such as diet, cosmetics, and the like, whose advertising traditionally relies heavily on consumer testimonials, will be forced to make significant changes to their advertising to adapt to these new requirements. Indeed, the requirement to affirmatively undertake a copy test to determine the consumer impression imposes an extraordinary burden on an advertiser.

Copyright 2009 Andrew B. Lustigman principal of The Lustigman Firm, P.C., advertising, Internet, and promotional marketing law attorneys.