It can be demoralizing to have compliance constantly reaching out to correct claims that a seller assumed were just fine. Yes, monitoring is essential as you do not want your field to be easy target for regulators to put your company at risk. So how do you monitor, keep the field happy and prevent future infractions at the same time?
The answer is education through compliance training.
The FTC has issued warning letters to a pair of trade associations and at least a dozen influencers regarding improper social media posts. Notably, each letter also included the FTC’s notice of penalty offenses concerning misleading endorsements and indicated that the recipient could face civil penalties of up to $50,120 per violation.
Unauthorized sellers battle with companies for consumer dollars, and customers look for the quickest, cheapest way to get the product on their doorstep. This severely impacts a direct seller's bottom line and, most importantly, hurts the field, as they often cannot compete with the cut-rate prices found online.
One day after releasing updated Advertising Guides to combat deceptive reviews and endorsements, the FTC has announced a proposed rule to ban fake reviews and testimonials. This marks yet another action taken by the Commission to prevent deceptive advertising practices and protect consumers.
Following a public comment period (beginning in May of 2022) for proposed changes to its current Endorsement Guides, the FTC has announced updated Advertising Guides to combat deceptive reviews and endorsements in order to protect consumers.
The FTC has sent new penalty offense notices to 670 companies regarding product claims substantiation as of April 13. These notices warned companies, including some direct sellers, that a failure to substantiate product claims could result in civil penalties in excess of $50,000. Check out this article from Kelley Drye to learn more.
Two notable news stories came out of the FTC this week. The first was the resignation of FTC Commissioner Christine Wilson, and the second was the commission's filing of its first-ever charges against a company for review hijacking. Read these two articles to learn more about these developments.