New NAD Decision Addresses Product Reviews
The NAD recently announced a decision that touches upon various issues related to consumer reviews, including how paid endorsements should be disclosed, a company’s responsibilities regarding the content of endorsements, and the presentation of aggregate reviews.
The FitTea website includes a “Results and Reviews” page. At the top of the page are a series of Instagram posts that the company itself re-posted on its site. Some of these posts come from paid endorsers, while others are independent. Below the Instagram posts is a section entitled “Customer Reviews,” followed by a list of reviews with star ratings. Some of these reviews were collected by a survey company who contacts purchasers to solicit their opinions, while others were submitted directly be consumers themselves.
As we’ve discussed in various posts, if a company provides people with an incentive to review its products, the reviewers must disclose their connection to the company. That didn’t happen here, and the NAD was concerned that website visitors wouldn’t be able to differentiate between the paid Instagram posts and the independent ones. To address this concern, the company agreed to establish a policy requiring paid endorsers disclose their connection to FitTea and to monitor compliance with that policy. Moreover, the company agreed to tag existing posts from endorsers on its site with the hashtag #ad.
The FTC has advised that paid endorsements can’t include claims that would be deceptive if made directly by the advertiser. However, the FitTea website featured posts with claims that the company couldn’t support itself, such as claims that drinking FitTea would boost metabolism, boost immunity, or burn fat. As a result, the NAD recommended that the company not re-post Instagram endorsements that include claims the company can’t substantiate on its own. Notably, the NAD did not address reviews posted directly by consumers that may have included problematic claims.
The NAD appeared to have some initial concerns about whether the reviews posted on the site might be skewed, but the company advised that they posted all collected reviews, that the reviews were un-edited, and that none of the reviewers had received an incentive. Accordingly, the NAD was comfortable that the company’s “process for collecting reviews ensures that the reviews are authentic and representative of reviews of the product from all purchasers from the FitTea website.”
The NAD noted that as more consumers come to rely on product reviews to make purchasing decisions, the NAD views its mission as helping to ensure that ad campaigns featuring these reviews are truthful and that they don’t mislead people about the products or the nature of the reviews themselves. As we’ve noted in previous posts, the FTC, state regulators, and consumer groups have also joined that mission.