“Results Not Typical” Disclaimer Bites the Dust

by Tim Anderson

Recently the Federal Trade Commission (FTC) released its final version of the updated Guides Concerning the Use of Endorsements and Testimonials in Advertising. The updated Guides become effective on December 1, 2009.

The Guides set forth the general principles that the FTC uses to evaluate endorsements and testimonials. In any action to enforce the requirements of the law as explained by the Guides, the FTC has the burden of proving that a particular use of an endorsement or testimonial is deceptive. The Guides are designed to assist business comply with the law.

The Guides consist of definitions, statements of the FTC’s understanding of the standards applicable under Section 5 of the FTC Act, and examples that help illustrate these standards.

According to the FTC, even factually correct statements can be determined to be deceptive and misleading. If a company can’t make a statement, then neither can an endorser. There is no protection afforded by having someone other than the business make a statement. The FTC indicates that if you can’t back up a statement, then you should not make it. A consumer endorser claiming that your product cured them of some affliction is not sufficient substantiation to make such a claim. According to the FTC, if you market a weight-loss product then you must possess and rely upon adequate substantiation, including competent and reliable scientific evidence that proves the product is effective for the purpose of weight-loss.

If you showcase someone that has had extraordinary success with your product a simple “Result Not Typical” will no longer be sufficient according to the FTC. The FTC indicates that if a company has given money or free products or any other incentive to a blogger with the expectation that the blogger will or possibly will review the product, then that must be disclosed by the blogger in the review by a statement, such as, “ABC Company gave me this product to try.” In many cases, both the endorser and the company may be liable for violations of the law in this area.

It would be wise for companies to make clear to their distributors what is and what is not allowed when it comes to claims about their products, services or the opportunity. Companies should also consider the impact of blogging and other “new media.” If a distributor is going to write about your products, services, or opportunity on a blog or other “new media,” such as Facebook or Twitter, then it is likely that the FTC would consider their connection to the company material and require a discloser of that connection.

Results Not Typical

Under the old Guides companies could use testimonials that were not generally representative of what consumers could expect from the advertised product so long as the marketers clearly and conspicuously disclosed either what the generally expected performance would be in the depicted circumstances (as an example the average result is 2 pounds lost per week as compared to the atypical 10 pounds per week), or the limited applicability of the depicted results to what consumers can generally expect to receive (results not typical or similar).

Companies used the “results not typical” language to inform consumers about how rare the featured results were. The new Guides reflect the FTC belief that “disclaimers of typicality” are not sufficient in most circumstances. Therefore any depiction of extraordinary results must be accompanied with a notice of what the consumer can general expect to obtain.

Conclusion

If your company is or has been using the “results not typical” language or relying on a similar format, you should review these activities in light of the revised Guides and make any adjustment before the December 1, 2009 effective date. You should seek competent legal counsel to ensure you are compliant. If you desire assistance from Jones Waldo, please contact us and we will be glad to determine if we can advise you on the matter. We wish you the best in your business pursuits.

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