The Federal Trade Commission (FTC) recently issued notices to more than 700 companies regarding their use of deceptive endorsements, and in a statement posted online, said it would “be ready to hold them responsible with every tool at its disposal.”
In these Notice of Penalty Offenses, the FTC highlighted the use of social media, which they believe has “blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace.” The civil penalties associated with these violations could incur fines up to $43,792.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement by the FTC. “Advertisers will pay a price if they engage in these deceptive practices.”
Direct selling powerhouse Amway Corporation was included in the lengthy list of companies who received these notices, but legal analysts have expressed doubt about the significance of these warning letters, given that such a wide range of companies—including Bath & Body Works, Netflix and Chick-fil-A—were included in this mailout.
While the FTC also clearly stated that a recipient’s presence on the list “does not in any way suggest that it has engaged in deceptive or unfair conduct,” there is concern that these notices are the beginning of an effort by the FTC to obtain monetary damages following a tumultuous battle over the validity of Section 13(b) of the FTC Act to do so.