Testify! Keys for the Legal Use of Testimonials and Advertisements

by Justin J. Prochnow

Whether it is a consumer trumpeting the remarkable results achieved by consuming a product or an expert giving his approval of a product, the use of testimonials and endorsements is a compelling method for promoting products. By using such statements, companies hope to convince potential consumers a particular product is truly effective. While the use of testimonials and endorsements is by no means a new concept, the means of conveying them to the public have multiplied in recent years. Through the use of the Internet and social media, as well as the traditional media of television, radio and print, companies have more avenues to reach consumers. In order to keep up with the growing use of endorsements and testimonials, federal regulators have stepped up enforcement efforts and tightened their regulation over the use of such statements. Companies must ensure testimonials and endorsements used in advertising and labeling of food, beverage and dietary supplement products are made within the confines of the applicable laws and regulations.

The primary responsibility for monitoring and enforcing the legality and validity of claims made regarding conventional food, beverages and dietary supplements rests with FDA and FTC. FDA has primary responsibility for claims made on product labeling, which includes the label on the container of the product, packaging, inserts and other promotional materials distributed with the product. Meanwhile, FTC has primary responsibility for advertising claims, including print and broadcast ads, infomercials, catalogs, radio spots and similar direct marketing materials. Many forms of media fall into both categories and, therefore, claims may be subject to scrutiny from both FDA and FTC. Additionally, the National Advertising Division (NAD) of the Better Business Bureau (BBB) has taken on an increased role in recent years to review claims based on complaints made by industry competitors or through NADs own investigation of potential improper claims. Companies should be aware of several key principles behind the regulatory paradigm.

Adopting Testimonials and Endorsements

One of the fundamental principles, of which companies should remain keenly aware, is that each statement made in the form of a consumer testimonial or an expert endorsement about a product that is used in labeling or advertising is deemed by FDA and FTC to be a claim attributable to the company promoting the product. In short, a company using an endorsement or testimonial to tout a product is adopting the statements made in the endorsement or testimonial as its own. Accordingly, claims cannot legally be made through a consumer testimonial or an endorsement that a company would not be allowed to make itself; such claims must be permissible for the type of product about which the claim is made. Essentially, for food, beverage and dietary supplement companies, this means a testimonial or endorsement may not expressly or implicitly claim that a product will help diagnose, treat, cure or prevent a disease.

FDA has issued numerous warning letters regarding the improper use of testimonials and endorsement to make disease claims. In October 2010, FDA sent letters to three different supplement companies for, among other violations, disease claims made in the form of personal testimonials and expert endorsements. Testimonials regarding the treatment of heart disease, diabetes and a multitude of other diseases were cited as clear evidence by FDA of intent to sell the particular products as drug products. And in February 2011, the agency issued a letter to the operator of a website marketing products as dietary supplements, in which FDA cited personal testimonials posted online claiming relief of arthritis symptoms, lowering of high blood pressure and cholesterol, and elimination of heart attacks symptoms as examples of disease claims and intent to sell the products as drugs.

Truthful, Not Misleading and Supported

While FDAs primary focus is on determining whether testimonials and endorsements make legally permissible claims for the products they promote, FTCs regulation centers around the fundamental principles of advertising enforced by FTCeach material claim made in advertising must be truthful, not misleading and backed by sufficient support. The requirement that claims must be truthful and not misleading is fundamental to all advertising; for this reason, acts of intentional deception usually carry the biggest risk of action, including criminal action, from FTC.

In recent years, FTC has brought a number of enforcement actions against companies, both in and outside the food, beverage and supplement industry, that have included allegations of false or misleading testimonials and endorsements. In December 2010, FTC filed a complaint against numerous defendants for a wide-ranging Internet scam to lure consumers into trial memberships for spurious government grant and money-making schemes. As part of the scam, the defendants created fictitious consumer testimonials and posted bogus positive reviews.

The other fundamental principle of FTC regulation that has received much attention recently is the requirement for adequate substantiation for any material claim. This holds true for personal testimonials and endorsements in the same way that it is true for non-testimonial claims. It is not enough that a personal experience testimonial represents the honest opinion of a consumer or expert; such statements must be supported by competent and reliable scientific evidence. An action against an online marketer of dietary supplements was brought by FTC in October 2010 for what FTC deemed to be baseless claims that the supplements would treat and prevent diabetes. Setting aside the issue that such claims are not legally permissible for dietary supplement products, the agency alleged this marketers claims about treating, reducing or eliminating diabetes were either false or simply not supported by scientific evidence.

Material Connections Must Be Disclosed

In furtherance of the basic fundamental principle that endorsement and testimonial statements must not be misleading, material connections between an endorser and the company must be disclosed. A material connection is one that might affect the weight given to or the credibility of a testimonial or endorsement. This means personal, financial or similar connections that are not evident or which consumers would not reasonably expect should be disclosed to allow consumers to make an informed decision.

An example of such a connection would be the fact that a doctor or other endorser is being paid for their endorsement. A simple statement such as Dr. X is a paid endorser of Company Y would likely satisfy the need for a proper disclosure. Another example would be an endorsement or testimonial made by a principal of the company selling the product; the identity of the endorser and the relationship to the company must be disclosed. This obligation to disclose material connections also extends to online endorsements, such as bloggers who write reviews of products. If the blogger is compensated, given free products or presented with other incentives that might influence the bloggers opinion, a disclosure should be made.

Defining the Endorsers Experience

One aspect of testimonials and endorsements that has received some of the heaviest FTC scrutiny has been the topic of representative results. The agency revised its FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising (the FTC Guides) in December 2009. While the FTC Guides are not law, they provide guidance as to how FTC is likely to view endorsements and testimonials in various circumstances. The revised FTC Guides address, in detail, consumer testimonials that tout specific benefits achieved by the endorser and which the typical consumer is likely to infer will be achieved upon using the product or services. Usually the products that receive the most attention for using these types of testimonials are weight-loss products.

Advertisements containing an endorsement related to the personal experience of a consumer must either have adequate substantiation to show the endorsers experience is representative of what the average consumer can expect to achieve with the product, or the advertisement must include a disclosure indicating what the generally expected results may be for the average consumer. FTC has determined statements such as I lost 50 pounds and kept it off are likely to convey to the typical consumer that all consumers can expect such results. If a testimonial reflects results that could be considered typical for a consumer, a disclosure must be made which identifies what the actual expected results are for the typical consumer.

The revised FTC Guides also reflect a substantial change in the agencys treatment of the use of the phrase results may vary. The revisions effectively eliminated the safe harbor FTC previously extended to non-typical testimonials that provided a disclaimer such as results not typical or individual results may vary. The FTC Guides now provide that most disclaimers are ineffective when used in conjunction with testimonials that convey a likelihood that consumers will achieve similar results, and FTC will not consider general disclaimers like results not typical or individual results may vary to be legally sufficient. This may lead advertisers who do not have the information available to disclose the generally expected performance of their product to either exercise greater care not to convey a typicality claim or to rely instead on statements of general endorsement of the product (Ive tried many products and this was the best). Of course, if a testimonial is such that a consumer is not likely to believe she will achieve similar results, a disclosure about expected results is not necessary.

Monitoring Responsibilities

Finally, companies have a duty to be aware of statements made about their products by endorsers or other promoters of their products. Both FDA and FTC have taken the position that entities have a duty to (i) monitor the activities and statements of their independent distributors and spokespersons and to (ii) take action to stop the use of all illegal claims by those persons. If a company becomes aware of untruthful, misleading or impermissible claims made by anyone endorsing or representing the company or product, the company should take action to stop the statements from being made. Because of the companys potential liability with respect to governmental enforcement actions, government investigations, and product liability claims, it is wise for companies to do their best to ensure all of their representatives adhere to the applicable law.

While the preceding principles are not an exhaustive summary of all the considerations that may factor in the use of testimonials and endorsements to promote products, companies that are familiar with these key principles should have a good foundation for compliance with FDA and FTC in this area. With both agencies stepping up the regulation and enforcement of such statements in recent years, it is important for companies to properly use these powerful advertising claims within the confines of the law or face unwanted regulatory action down the road.

Justin J. Prochnow is an attorney and shareholder in the Denver office of the international law firm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food and beverage, dietary supplement and cosmetic industries. He can be reached at (303) 572-6562 or [email protected] .