Are Paid Testimonials Legal Are They Defamatory

Is it legal to pay for a fake testimonial? What about it you have a disclaimer revealing the phony nature of the testimonials; is that OK? Are fake and paid testimonials also considered defamatory? We’ll get to these questions – and more – below.

The FTC’s Marketing Guidelines For Online Testimonials

We hear the question often: Are fake testimonials, technically, legal? How about testimonials I’ve paid for? After all, I did “pay” for them, so they are mine.

The simple answer is, “No. Fake and Paid testimonials are almost always considered false advertising, which is a violation of the FTC Act. However, there are ways to use different types of testimonials if you have the proper disclosures. Each case varies, so it’s best to speak with a marketing law attorney about your particular situation to figure out what you can and cannot get away with.

The FTC In Five Seconds

In the United States, the Federal Trade Commission is the government “consumer watchdog.” The agency is responsible for sussing out and punishing people and businesses who engage in “unfair and deceptive acts or practices in commerce.”

The Dot Com Disclosures

For people doing business online, the FTC’s Dot Com Disclosures are the guidelines they need to know. It outlines the FTC’s rules for marketing on the Internet. Consider it the online marketing legal Bible.

A few general words of wisdom from the Dot Com Disclosures:

Endorsements must be truthful and not misleading.

If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances.

If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.

What Constitutes False Advertising in the United States?

U.S. law defines false advertising as:

“a means of advertisement other than labeling, which is misleading in a material respect; and in determining whether an advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual.”

Be sure to note that according to the definition above, false advertising in the United States doesn’t just take into account the words on the page or screen, but it also considers the overall effect of omitted information.

Impression Matters When It Comes To False Advertising

The overall imprint a marketing piece conveys is paramount in the eyes of federal regulators. While a single “stretched statement” may not summon the wrath of the FTC, the commission may deem the cumulative arrangement of images, statements, and claims to be deceptive. In other words, the FTC will throw you big ole’ “so” if you try to argue, “But I didn’t mean it that way!”

Take, for example, the lasting impression Acai berry marketers left with the public: Average Janes and Joes can easily shed pounds without a proper diet and exercise. They also often promised specific weight loss results in an unreasonable amount of time.

Fake & Paid Testimonials Are Also Defamatory

Not only are fake and paid testimonials against FTC regulations, but if you use fake and paid testimonials against a competitor, it’s also defamation. What happens if you decide to play dirty and launch a fake and paid “bad review” assault against a competitor – then get caught? The defamation damages could end up costing you millions. And if you don’t have millions, it could end up costing you your company, car or savings.

Bottom line: Launching A Bad Review Campaign Against A Competitor Will Mostly Likely End Up Costing You A Fortune & Your Marketing Company

Making sure that you’re online marketing efforts are compliant should be a top priority of anybody doing business online – -whether you’re an affiliate marketer, a brick-and-mortar business owner with a Web presence, a startup, or an Internet entrepreneur. Contact the online marketing lawyers at Kelly / Warner today to arrange a consultation. Not only can we help you to audit your marketing materials, but we can also assist with any defamation situations you may encounter.