FTC Sends Out Official Warnings to Over 700 Manufacturers Over the Use of Fake Evaluations

As e-commerce continues to grow, so too are fraudulent advertising practices, including fake reviews, undeclared paid referrals, and other practices that violate federal law.

And now the FTC is trying to step up its action on that front by sending communications to over the Commission this week 700 companies, including Facebook, Amazon and LinkedIn, about their use or enabling false reviews and advertisements to advertise products online.

As of the. explained FTC:

“The rise of social media has blurred the line between authentic content and advertising, leading to an explosion of misleading recommendations across the market. Fake online reviews and other fraudulent recommendations often advertise products throughout the online world. As a result, the FTC is now using its law enforcement agency to remind advertisers of the law and prevent them from breaking it. “

The FTC says that by mailing its notification of criminal violations to these organizations, it is effectively informing everyone of their need to address these issues or risking fines of up to $ 43,792 per violation.

“The Notification of Criminal Violations enables the agency to seek civil sanctions against a company that engages in conduct that it knows was found to be unlawful in a previous FTC administrative order as a consent order.”

After issuing these warnings, the FTC now has a legal basis to impose penalties in future cases if found.

The details in each case are unclear, but the FTC states that the violations highlighted in their notifications include:

• False assertion of approval by a third party
• Incorrect indication of whether an endorser is a current, current or new user
• Using an endorsement to make deceptive benefit claims
• Failure to disclose an unexpected material association with an endorser
• Misrepresenting that the endorser’s experience is the typical or common consumer experience.

These violations cover a wide range of practices, particularly those used in social media marketing, and as the use of influencers in promotions also increases, it pays to familiarize yourself with the latest regulations to ensure that you not even with the rules of the FTC.

The FTC also has an overview guide to their Approval Rules to give more assistance in this regard.

It will be interesting to see if this new FTC push actually leads to more concrete legal action on this front and what that means for the marketing industry. And again, you can imagine that given the rise in the use of influencer marketing, many of the specific criteria will not meet, adding to further concerns.

Therefore, it is worthwhile to find out about the latest rules.

The FTC has published a full list of the 700 companies to which it has sent notices here.