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FTC cracks down on disclaimers

Mitchell Clute

December 8, 2008

2 Min Read
FTC cracks down on disclaimers

by Mitchell Clute

In the future, when consumers see a weight-loss advertisement showing photos of dramatic changes, the disclaimer will have to say more than simply "actual results may vary." That's one of the issues addressed in the Federal Trade Commission's proposed revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising, a document that spells out what information advertisers must include in ads relying on endorsements and testimonials.

According the FTC, "The proposed revisions state that testimonials that do not describe typical consumer experiences should be accompanied by clear and conspicuous disclosure of the results consumers can generally expect to achieve."

"In these situations, such as with before-and-after pictures of dramatic weight loss, the disclaimer 'results may vary' or 'results not typical' is not going to fly anymore," said, Marc Ullman of Ullman, Shapiro & Ullman, a New York firm specializing in food and drug law. "You'll need to go beyond that, with a disclosure more along the lines of '90 percent of product users lose between five and 10 pounds in four months,' which is dramatically different."

Though the primary offenders in the past have been companies selling weight loss, hair regrowth, and similar products, any performance claim backed by specific testimonials would be subject to the new, more restrictive endorsement guidelines.

The proposed changes also address the issue of endorser liability and material relationships between endorsers and product companies, and Ullman said these changes are generally positive for the industry. "What FTC is doing is clarifying principles that have developed in the past decade in case law, and putting that information in the guides so that advertisers don't have to track down specific results in FTC litigation," Ullman said. "Beginning with the Steve Garvey case, there has been a trend to impose liability on endorsers when the commission believed endorsers had to know their claims were false."

Former baseball player Garvey appeared in infomercials for the products Fat Trapper and Exercise in a Bottle. Though the products were pulled and the company paid FTC $10 million settlement, a district court ultimately found that Garvey did not violate federal trade regulations.

The new Guides also clarify when a company must disclose a material relationship with the endorser. "If the person providing the testimonial is the company's office manager or the owner's brother-in-law, it must be disclosed," Ullman said. FTC will be accepting public comments on the revisions through Jan. 30, 2009.

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