FTC Rules for Paid Endorsements and Sponsorships

Hey, it’s Brian. This article is for informational purposes and is NOT legal advice, cool? Onto the article…

Hey there, content creators! Let’s talk about something that might make your eyes glaze over but is super important: FTC disclosure rules.

Trust me, as both a lawyer and content creator, I know these rules inside and out, and I’m going to break them down in a way that actually makes sense.

First, let’s look at what happens when things go wrong:

Real-world examples:

  • In October 2022, Kim Kardashian got slapped with a $1 million fine for not disclosing that her Instagram post about EthereumMax was a paid endorsement.
  • In March 2020, Teami (a detox tea company) had to return $1 million to consumers for misleading claims and because their influencers didn’t properly disclose their paid relationships.
  • In 2023, the FTC started cracking down on smaller influencers too, sending hundreds of warning letters about inadequate disclosures.

Legal Landmine: Don’t think you’re too small to get noticed. The FTC is actively monitoring creators of all sizes, not just the Kardashians of the world.

Who Needs to Follow FTC Rules?

Short answer: Pretty much everyone creating content that reaches U.S. consumers.

Yes, that includes you if:

  • You’re outside the U.S. but have U.S. followers
  • You have a small following (size doesn’t matter here)
  • You’re just getting started with brand deals

What Needs to Be Disclosed?

Here’s where it gets interesting. You need to disclose any “material connection” with a brand.

This includes:

  • Paid sponsorships (obviously)
  • Free products
  • Discounted products
  • Special access (like that theme park press event you got invited to)
  • Family relationships with the brand
  • Employment relationships
  • Even affiliate links!

Creator Corner: Yes, even that free mascara you got needs to be disclosed if you’re showing it in your content!

How to Properly Disclose

The FTC loves clear and conspicuous disclosures. Here’s what that means:

Do:

  • Put disclosures at the beginning of your content
  • Use clear language like “ad,” “sponsored,” “paid partnership”
  • Make sure your disclosure is easily noticeable
  • Use platform-specific tools (like Instagram’s “Paid Partnership” tag)

Don’t:

  • Bury #ad in a sea of hashtags
  • Put disclosures at the end of your post
  • Hide disclosures in your bio or profile
  • Use vague terms like “sp,” “collab,” or “spon”

Platform-Specific Guidelines:

Instagram:

  • Use the “Paid Partnership” tag
  • Put #ad or #sponsored at the beginning of your caption
  • Don’t hide disclosure in the middle of hashtags

YouTube:

  • Verbal disclosure in the first 30 seconds
  • Written disclosure in the description box
  • Both verbal and written for best practice

TikTok:

  • Use #ad in the caption
  • Verbal disclosure in the video
  • Consider pinned text disclosure

Legal Landmine: Using platform disclosure tools alone might not be enough. The FTC wants explicit disclosures in your content too.

Content Types Requiring Disclosure:

  • Regular posts
  • Stories/Reels/TikToks
  • Live streams
  • Pins and shares
  • Even likes and comments if they’re part of a paid campaign
  • Video descriptions
  • Blog posts
  • Podcast episodes

Beyond Basic Disclosure: Other Legal Requirements

Here’s what else you need to know:

  1. Truth in Advertising:
  • Can’t endorse products you haven’t tried
  • Can’t say you love something you hate
  • Can’t make up claims without proof
  1. Documentation:
  • Keep records of your brand deals
  • Save copies of your posts with disclosures
  • Document any claims or results you share
  1. Platform Compliance:
  • Follow each platform’s branded content policies
  • Use platform-specific disclosure tools when available
  • Stay updated on platform policy changes

Real-world example: A fitness influencer got in hot water for claiming a supplement helped them lose 30 pounds when they had never used the product. Don’t do that!

Creator Corner: Create a disclosure template for each platform you use. This helps ensure consistency and compliance.

What Happens If You Don’t Comply?

The FTC has several enforcement tools:

  • Monetary fines (think Kardashian-level fines)
  • Forced refunds to consumers
  • Mandatory compliance reports
  • Public announcements of violations (not great for your brand!)

Action Steps for Creators:

  1. Audit your existing content for proper disclosures
  2. Create disclosure templates for each platform
  3. Set up a system for tracking brand relationships
  4. Document your compliance efforts
  5. Stay informed about FTC updates

The Bottom Line on FTC Rules

Being transparent about brand relationships isn’t just about following the law – it’s about maintaining trust with your audience.

Your followers appreciate honesty, and many studies show that clear disclosures don’t hurt engagement.

Legal Landmine: When in doubt, disclose. It’s better to over-disclose than risk FTC penalties.

Remember, you can absolutely make money from brand deals and sponsorships – just be upfront about it! Your audience will respect you more, and you’ll sleep better knowing you’re on the right side of the law.

Now go forth and secure those brand deals – just remember to tell everyone about them!

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