The Federal Trade Commission has sent letters to hundreds of companies putting them on notice about the steep penalties they could face if they use endorsements, including fake online reviews, to deceive consumers. The FTC noted that the rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements.

The FTC said the more than 700 companies that received the notice include top advertisers, advertising agencies, retailers, and consumer product companies. None of the companies are accused of wrongdoing; however, they are now on notice of potential violations.

The notice outlines practices the FTC has determined are unfair or deceptive. These include:

  • Falsely claiming an endorsement by a third party.
  • Misrepresenting whether an endorser is an actual, current, or recent user.
  • Using an endorsement to make deceptive performance claims.
  • Failing to disclose an unexpected material connection with an endorser.
  • Misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.

The FTC warned that it can assess civil penalties of nearly $44,000 per violation.

The FTC has created multiple resources for businesses to help make sure that they are following the law when they use endorsement to advertise products and services. The FTC’s Endorsement Guides can be found here.