Spokeo, the online directory, came under FTC investigation after the company told its employees to post favorable reviews on various news sites. By design, the reviews appeared to be posted by unrelated customers. As with the case of Nutrisystem’s deceptive Pinterest posts, the FTC determined that Spokeo’s reviews should have been accompanied by appropriate disclosures. The fact that they weren’t made the fake reviews deceptive.
As a result of the fake reviews and other violations, Spokeo agreed to pay an $800,000 settlement to the FTC.
The Spokeo and Nutrisystem cases should serve as a warning to advertisers. Social media and other online outlets are no different from any other media in terms of disclosure requirements. And guerrilla marketing, when it crosses the line into deception–as it often does, by design–may be met with an FTC investigation and sanctions.
The FTC has said that in the online context, disclosures should be “unavoidable” and presented in an ordinary place using clear language and text. As always, advertisers should be cautious when attempting to generate and place product claims, including user testimonials and reviews.