On October 19, 2017, the Federal Trade Commission announced that it had entered into a consent order with Victory Media, Inc., d/b/a “G.I. Jobs” and “Military Friendly,” concerning allegations that Victory Media deceptively promoted post-secondary schools to military consumers by claiming that certain schools were “military friendly” and failing to disclose its material connections to the schools.
Victory Media is the publisher of the magazines G.I. Jobs, the Guide to Military Friendly Schools and Military Spouse. The magazines are widely circulated on military bases and include articles aimed at assisting servicemembers transition to civilian life, often focusing on educational opportunities. Victory Media also disseminates similar content to military consumers through related websites and on various social media platforms. Victory Media’s gijobs.com website includes a tool called School Matchmaker through which consumers can search for post-secondary schools based on name, location, or subject area of study. The schools listed in the search results were all represented as “military friendly.” The “military friendly” designation had been created by Victory Media based on publicly available data and a voluntary survey it sends to schools with questions related to the educational needs and interests of military students.
The FTC alleged that, beginning in mid-2015, Victory Media only included schools in the School Matchmaker search results if the school had paid Victory Media to be included, regardless of whether the school met the “military friendly” criteria. The FTC pointed to documents uncovered during its investigation allegedly demonstrating that schools appearing in the search results did not score high enough on Victory Media’s system to merit the “military friendly” designation.
The FTC also took issue with Victory Media’s endorsements of certain schools in articles and social media posts. Victory Media recommended those schools as having beneficial programs for individuals leaving military service without disclosing that the schools had paid Victory Media for the endorsement. The FTC has long taken the position that the failure of an endorser or an advertiser to disclose a material connection between the endorser and advertiser is a deceptive practice in violation of Section 5 of the FTC Act. Payment is, of course, the most basic material connection.
The FTC also alleged that promotional emails sent by Victory Media did not adequately disclose that the schools being promoted in the emails had paid Victory Media. The emails contained a disclaimer in small dense print which could only be seen if the consumer scrolled down to the bottom of the email. Even if read by the consumer, the disclaimer did not identify the message as a paid advertisement for the school and only vaguely implied that it might be.
Without admitting any wrongdoing, Victory Media agreed to discontinue the practice of misrepresenting schools as “military friendly” and to properly and adequately disclose material connections to any advertiser it endorsed through clear and conspicuous language in close proximity to the triggering endorsement. The Victory Media settlement comes shortly after the FTC issued updated FAQs in connection with its Guides Concerning Use of Endorsements and Testimonials in Advertising this September. The updated FAQs are an effort by the FTC to keep its guidance current with evolving technology and advertising formats, particularly on the often tricky and counterintuitive question of how to disclose a material connection.
Troutman Sanders’ Government Regulation of Advertising and Consumer Products team regularly advises clients on compliance with the FTC’s Endorsement Guides.