FTC Addresses Deceptive Use of Endorsements in Advertising

The Federal Trade Commission (FTC) recently sent a reminder notice (available here) outlining acts or practices that the FTC considers to be deceptive or unfair under the FTC Act. The list comes from longstanding FTC case law, and does not change the status of existing law.  Among the items listed are:

1) a third-party endorsement of a product or its performance where the third party has not in fact endorsed it;

2) falsely claiming that an endorsement represents the experience, views, or opinions of users of the produce;

3) misrepresenting the endorser of the product as a user of the product;

4) using an endorsement without good reason to believe that the endorser still supports the views presented in the endorsement;

5) use of testimonials, even if they are genuine, if they are unsubstantiated or make deceptive performance claims about the product;

6) failure to disclose the connection between an endorser and the seller of the product that might affect the weight or credibility of the endorsement; and

7) misrepresenting the experience of the endorser as typical of the experience of ordinary users of the product.

In addition to the FTC Act and Regulation N- Mortgage Acts and Practices- Advertising, lenders should be paying attention to other advertising regulations, state regulations for the state (in which your advertisement will be published), and federal regulations, including UDAAP and Truth-in_Lending/Regulation Z.