Radio stations running testimonials and sponsored content through social media channels need to be aware of new FTC regulations aimed at curbing deceptive advertising practices. The new rules were created in response to unchecked influencer behavior and AI.
The updated regulations, designed to enhance transparency, have created an urgent need for brands to ensure that any advertising on digital platforms is clear about endorsements and influencer partnerships – an expansion of what is already monitored over the air.
The expansion partly deals with the creation or distribution of fake or false testimonials, including testimonials that imply experiences the reviewer never had with the business or product and reviews or endorsements attributed to non-existent individuals, often AI-generated, or using fake identities.
Other stipulations include prohibiting businesses from incentivizing positive or negative reviews and requiring insider connections to be disclosed in testimonials. Companies cannot mislead consumers by presenting their own review sites as independent, nor can they suppress negative reviews through intimidation.
Additionally, buying or selling fake social media indicators, like bot-generated followers, is banned if intended to misrepresent credibility or popularity. These guidelines target undisclosed partnerships and fake endorsements, carrying fines of up to $43,792 per violation.
Many brands remain unaware of the new rules, despite the FTC’s intention to enforce them rigorously.
This also brings digital competitors on a more even playing field with radio broadcasters, which have long been monitored for accuracy and honesty. In November 2022, the FTC, along with seven states, settled with Google and iHeartMedia over deceptive promotions for the Google Pixel 4 smartphone. Radio personalities endorsed the phone in approximately 29,000 spots without having used it. The settlement resulted in $9.4 million in penalties.
Even so, industry advisors suggest that advertisers review their marketing practices, focusing on clear disclosures. Ensuring authentic endorsements and avoiding misleading claims are essential to mitigate compliance risks.
