FTC Revised Online Endorsement Guidelines – Part Two

What Doctors and Medical Practices Can and Can’t Do According to the New FTC Endorsement Guidelines – Part Two

If you push the boundaries to get more online business, you may be looking at a complaint from the Federal Trade Commission. Health physicians, product retailers, and others who risk compliance without consulting with an FTC endorsement lawyer, can severely damage their business. This article and the complementary article (add in the link to the other article) review some of the common questions companies and marketers have raised to the FTC about online endorsements.

What are the FTC Rules on Soliciting Endorsements?

Medical providers, suppliers, and other medical companies can seek out testimonials and endorsements from their customers. They can use these endorsements in ads to promote medical products and services. There is no requirement to disclose payments if, in fact, the customer did not receive or expect any compensation, discount, value, or benefit – in return for the endorsement. Doctors, hospitals, and any medical provider or product seller can ask that people who use their services or products post a review.

If the customer does expect some sort of benefit such a reduced free, a free treatment, or a free sample – then that expectation must be disclosed. It should be relatively clear that customers will give a more favorable review if they expect something in return. A “benefit” can include just the fact that they are going to be “featured in your advertising.” Some people consider it an honor to be featured because it’s something they can brag about to friends and family. Health businesses, in this scenario, should say something like “Customers were told in advance they might be featured in an ad.”

Generally, it’s not considered good policy to entice people to give positive reviews on social media sites like Yelp or Etsy in return for a service or product discount. A discount is considered a benefit that either shouldn’t be offered or should be disclosed if it is offered. Anyone who gives a testimonial or review in return for a discount should be told that that you will be making an appropriate disclosure – so consumers can make honest opinions.

Healthcare companies should inform anyone who is getting a free product (through the company, the Internet, or some other means) that if they review the product online, they should disclose that the got a free product. The same idea applies to customers and users who get discounts. The health company should take active steps (in writing or oral) to tell the customer about the need for a disclosure statement.

What steps should a health company advertiser take regarding what other say about the health company in social media?

Many companies use bloggers and other people who can influence social media to support their services and products. According to the FTC guidelines, advertisers should have policies ready to monitor and train how their network uses social media. The supervision requirements may vary depending on the risk of physical harm or financial harm.

“For example, a network devoted to the sale of health products may require more supervision than a network promoting, say, a new fashion line.”

This requirement makes sense, as generally, consumers don’t suffer physically simply because they wear clothes that don’t look nice.

FTC recommends:

• Bloggers and others be told what things they can and cannot say regarding the product’s benefits. If the product or service directly impacts a person’s health (such as their ability to deal with pain), there should be clear instructions so the benefits aren’t oversold or over-promised.
• The network of company supporters should be informed when disclosures are required and how to make them.
• It’s good policy to independently and routinely check the blog and social media sites to see what’s being said about your services and products.
• If inappropriate behavior is found, steps should be taken to correct that behavior.

If a medical office, hospital, clinic, product manufacturer or seller, uses an advertising firm or public relations agency to help with medical websites and electronic marketing,  that firm/agency should be asked to provide periodic reports on what policies are in place and how those programs are working. It is the health company’s duty to monitor the advertiser just as the advertiser must monitor the individual bloggers and social media commentators.

How do the FTC guidelines affect Affiliate or Network Marketing?

Some marketers earn commission when people read their reviews and then click on the link for the product or service being reviewed. These affiliate marketers should disclose their connection to the retailer. The disclosure should be conspicuous. Readers should be able to make informed decisions about how much weight to give a review.

The nature of the disclosure can vary.  As FTC states:

“When the affiliate link is embedded in your product review – a single disclosure may be adequate. When the review has a clear and conspicuous disclosure of your relationship and the reader can see both the review containing that disclosure and the link at the same time, readers have the information they need.”

If the disclosure is separate from the review, then the disclosure should be made in such a manner as to make the connection clear.

Disclosures generally should be “clear and conspicuous.” Proximity to the review is best. Readers shouldn’t have to scroll for the review. The disclosure shouldn’t be reviewed in obscure parts like the About Us section that people often don’t read. It’s not enough just to say, “affiliate link.” Consumers generally don’t understand what the word affiliate means.

If a reviewer isn’t getting paid to direct readers to the health company site, then there shouldn’t’ be a need to make a disclosure. If the reader should easily understand that your review is a “paid endorsement,” then the disclosure normally isn’t needed. Reviewers should take the time to consider what is “clear” to them may not be “clear” to most readers.

Expert endorsers should disclose they are making a paid endorsement. If an advertiser uses expert endorsers who promote products/services “on programming that consumers won’t recognize as paid advertising,” then the nature of the relationship should be disclosed.

What are the FTC online guidelines for employee endorsements?

Employees are naturally inclined to want to promote the services and medical devices of the people they work for. In part, because they are getting paid by their employer. In part, because they hopefully like where they work. Many employees are inclined to promote their employ through social media. The endorsements should include a clear and conspicuous disclosure.

An experienced FTC endorsement lawyer will normally explain that health consumers do need to know that an employee is the one promoting the product. Most people, aside from a small network of family and friends, don’t know the employee works for an employer unless they specifically state that work relationship.

Whether employees need disclosures if they “like” a company post on Facebook on some other social media depends. If the post is a paid advertisement, then there should be a disclosure of the employee relationship. “With a share, that’s fairly easy to do, “Check out my company’s great new product ….” Endorsers shouldn’t “like” a product if they haven’t used it. If a disclosure is possible, the disclosure should accompany  the “like.”

Companies with hundreds or thousands of employees can’t monitor each employee’s social media posts – even if the employees agree not to post good reviews without disclosing the employee relationship. The FTC doesn’t expect health companies and hospitals to directly monitor each employee’s postings and reviews. Large companies should, though, routinely remind employees of their posting and disclosure policies. If an employer does gain knowledge that an employee is not complying with company online endorsement policies, the employee should be reminded of the company rules. The employee should also be asked to either delete the review or fully disclose the employee relationship.

Ad agencies need to be careful about what they ask their employees to do on behalf of their clients. All reviews, posts, and comments should be accurate and true. Nobody should support a product or service if they haven’t tried the product or service. The nature of the work relationship should be disclosed when the endorsement is made. For example, an ad agency should suggest that an employee endorsement include the following “My employer is paid to promote [name of product],” or simply “Advertisement,” or when space is an issue, “Ad” or “#ad.”

Just using the expression “#employee” is generally not enough. It’s confusing to most consumers especially if the consumers don’t identify your company with the product or service that is being endorsed.

Testimonials Should Reflect the “Typical Consumer Experience”

Consumers rely on statements by users who claim specific positive results. Consumers can be expected to think that this type of testimonial means they can expect the same results on usage of the product or service. The FTC doesn’t consider that qualifying statements such as “Results not typical” or “Individual results may vary” will alter that impression. Generally, FTC endorsement lawyers suggest that this type of testimonial be supported with proof that the results are indeed typical. Alternatively, the health care company should “clearly and conspicuously disclose the generally expected performance in the circumstances shown in the ad.”

An example set forth in the FTC online endorsement guidelines is:

“an ad in which a woman says, “I lost 50 pounds in 6 months with WeightAway.” If consumers can’t generally expect to get those results, the ad should say how much weight consumers can expect to lose in similar circumstances – for example, “Most women who use WeightAway for six months lose at least 15 pounds.”

How should older testimonials be handled?

If a health company website has old testimonials from happy customers but the company doesn’t know if the testimonial met the “generally expected results” at the time they were made, the company should consider the following (before removing the testimonial altogether:

1. The company should know if the endorser is still using the product – if the testimonial says they are. In general, it’s a good idea to update testimonials periodically so they’re current.
2. Otherwise:

“If your product is the same as it was when the endorsements were given and the claims are still accurate, you probably can use the old endorsements if the disclosures are consistent with what the generally expected results are now.”

Additional FTC endorsement guideline information

The best course of action is to make an appointment with an experienced FTC online endorsement lawyer. This lawyer will help you meet the legal challenges of the new FTC guidelines.

Key Takeaways

• Health care providers and hospitals who use deceptive online marketing practices may be subject to investigations, fines, and penalties. Company marketing practices may be subject to suspension or termination.
• Health professionals and companies need to develop policies and programs to monitor their marketing companies, employees, blogger network, social media network, and affiliate marketers
• Disclosures are required if there is any connection between the endorser and the health company. Disclosures should be clear and prominent.

Learn Your Rights and Duties by Speaking with an Experienced FTC Endorsement Today

Today, much marketing is doing online. Social media and blogs do drive a lot of consumers to company websites. Online endorsements encourage consumers to try products and use services. Consumers have a right to rely on the truth of these advertisements.

To understand if you’re complying with the new guidelines, you should contact a trusted FTC endorsement lawyer. Cohen Healthcare Law Group has the experience and resources to help your company understand the dos and don’ts of online endorsement marketing.