A General Manager e-mailed in a great question for our “Ask The Attorney” blog this week concerning live reads and product endorsements. What are my station’s legal obligations since the FTC passed new rules requiring those endorsing products to identify they are being compensated by the sponsor? Do my jocks have to implicitly explicitly say on air in that commercial that they are being paid for their testimonials? Attorney John Garziglia tackled that question for us and here is his answer.
Radio personalities giving testimonials for a product or service raise regulatory compliance issues under both Federal Trade Commission and Federal Communications Commission rules and policies. Both the FTC and FCC have long required that compensation received, including free products, for an on-air testimonial, be revealed. The more recent FTC guidelines now envelope new media and social media, including bloggers and web commentary, into existing FTC testimonial guidelines.
Simply put, an on-air testimonial endorsement of a product or service, whether in an advertisement, in program content, or in a talk show, requires that consideration received in connection with it be disclosed. Additionally, the testimonial must not be false, deceptive or misleading.
Let’s see how this translates into practice for hard-working radio personalities. A radio personality visits a ski resort and gets free lift tickets because the ski resort thinks the personality may talk on the air about the great skiing. Indeed, the radio personality returns to the air the next day and does several bits about skiing, naming the ski resort. Both the FTC guidelines and the FCC’s sponsorship ID rules require that the receipt of the free ski lift tickets be revealed to the radio listeners.
If the ski resort has made a buy on the radio station and the radio personality is being asked to voice a spot with a testimonial, this is where FTC guidelines kick in. In giving his or her testimonial of the great skiing, the radio personality must keep in mind that he or she must have personally experienced the great skiing, and the radio personality must give an honest assessment (i.e. saying it was great powder if in fact the ground was mostly bare is a no-no).
With endorsements and testimonials, of the two agencies the FCC is the greater enforcement worry for pursuit of sponsorship ID violations. Any on-air endorsement or mention of an advertiser’s product or service in exchange for consideration either to the air personality or to the radio station must have a sponsorship identification. Any live read that does not appear to a normal listener to be an advertisement, but actually is an advertisement, should be tagged with an explicit sponsorship ID.
If an air personality receives free product or payment for broadcast content, and it is not revealed on the air, that is the classic definition of payola or plugola, depending upon whether what is being plugged is music or another product. It is a significant violation of Section 73.1212, the FCC’s sponsorship identification rule.
If a radio station is contemplating an advertising campaign in which its air personalities deliver testimonials about products or services, particularly about investments, gold, or medical devices or services, it is prudent to search on the FTC’s website for its rules and guidelines regarding endorsements and testimonials, and to engage legal counsel familiar with the FTC’s rules. While the FTC puts most of the burden on advertisers for compliance with its rules, no radio station wants to be caught up in an FTC investigation of false or misleading testimonial claims.
In summary, a radio station’s legal obligation is that an air personality’s on-air testimonial must reveal if there was a payment of money, product or services, must be based upon the air personality’s actual knowledge or experience, and must be truthful.