The FTC recently settled with Teami, LLC (“Teami”), an indication that the Agency is still actively reviewing health claims and monitoring social media influencers for proper disclosures. Teami allegedly brought in over $15 million through its deceptive marketing tactics, but given the company’s financial condition, the FTC agreed to partially suspend its $15.2 million judgment once Teami pays $1 million.
Teami sells teas and tea-based products and markets these products with certain health-related claims, including claims that the teas can cause substantial weight loss, fight cancerous cells, decrease migraines, and prevent colds and flu. Not only did the FTC take issue with the deceptive nature of these claims, the FTC’s complaint also alleges that Teami’s endorsers failed to adequately disclose their connection to Teami in their Instagram posts. These endorsers include several household names with voluminous followings, including recording artists Jordin Sparks and Cardi B. Below are examples of such posts cited by the FTC:
For most Instagram users of a certain demographic, it was nearly impossible not to come across a promotional post about Teami. It is therefore no surprise that the FTC came across these posts. The Agency even sent Teami a letter back in April 2018 about the adequacy of disclosures made by influencers endorsing Teami’s products on Instagram.
Following the letter, Teami implemented its own social media policy that covered disclosure requirements, including the need to make disclosures above the “more” button. Despite Teami’s new social media policy, the FTC found that the endorsers still failed to clearly and conspicuously disclose their material connection. According to the FTC, most disclosures were too far down the endorser’s caption and required users to click the “more” button to see it.
The FTC even sent individual warning letters to ten of Teami’s endorsers, putting them on notice of their insufficient disclosures. In these warning letters, the FTC gave the individual endorsers a deadline of March 30, 2020 to respond to the FTC and describe the remedial action they have taken to clearly disclose their connection to the brand.
Takeaway: This latest action by the FTC reinforces the fact that simply including a contractual requirement that influencer properly disclose their material connection the brand is not enough. Brands must ensure – either directly or through their agencies – that influencers are, in fact, following these requirements.