On April 20, 2020, the Federal Trade Commission (FTC) announced a consent order that imposed $9.3 million in consumer refunds to settle allegations that Fashion Nova, Inc. violated the agency’s Mail, Internet, or Telephone Order Merchandise Rule (the “Mail Order Rule”), which applies to merchandise sold to consumers, online, by mail, or by phone. 16
Will the FTC Crack Down on Online Influencers?
On November 5, 2019, the Federal Trade Commission released a, first-of-its kind, guidance targeting online influencers. The new guide titled “Disclosures 101 for Social Media Influencers” informs influencers when and how they must disclose sponsorships with brands to their followers. This is part of the FTC’s increasing focus on making product endorsements more transparent.
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Holding Agencies Accountable: Ad Agency Agrees to Pay Largest Penalty Ever for False Advertising
In the largest-ever penalty issued against an ad agency, the Federal Trade Commission announced that Marketing Architects, Inc. (MAI) agreed to pay $2 million dollars to settle a false advertising complaint filed with the FTC and the State of Maine Attorney General’s Office.
The ad agency came to the FTC’s attention after the Commission settled with Direct Alternatives (DA) and Sensa Products, LLC for more than $16 million and more than $26 million respectively to resolve claims that the companies engaged in the false and deceptive advertising, marketing and sale of weight loss products. According to the Complaint, MAI created direct response radio ads for Sensa and DA as well as MI6 Holdings, LLC (MI6) and other unidentified clients with toll free numbers inviting consumers to call and purchase weight loss. In addition, for some clients, including DA, MAI created and implemented scripts for its Interactive Voice Response (IVR) system, providing testing, analysis and strategic advice regarding the performance of its IVR scripts and ads as well as collecting payment information.