Federal Trade Commission Announces New Guides Concerning the Use of Endorsements and Testimonials In Advertising

by Jeffrey Segal, M.D. J.D. and Michael J. Sacopulos J.D.

The Federal Trade Commission on October 5, 2009 released “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” This is the first update the FTC has made on this topic in approximately thirty years. Much of the new Guides address social media. The Federal Trade Commission works to prevent fraudulent, deceptive, and unfair business practices. The Commission does this in large part by bringing legal actions under the FTC Act.

Although the most recent Guides concerning the use of endorsements and testimonials are not specifically directed towards the healthcare industry, they are certainly applicable to healthcare advertisers. In the recent past, the Commission has taken an interest in such healthcare fields as weight loss. With an increased number of healthcare practices and hospitals embracing an Internet presence, the FTC Guides Concerning the Use of Endorsement and Testimonials in Advertising may have broader ramifications in the healthcare industry than might be suspected.

Medical Justice’s General Counsel, Michael Sacopulos, recently sat down to speak with FTC Assistant Director of Bureau of Consumer Protection, Rich Cleland, to discuss the impact of the new Guides on the medical community. Below follows a portion of the conversation between Michael Sacopulos (Medical Justice-MJ) and Rich Cleland (Federal Trade Commission-FTC).

MJ: The FTC recently published final Guides governing the use of endorsements and testimonials in advertisements. How, if at all, do you foresee these changes will impact medical providers?

FTC: Medical providers in terms of their promotions are subject to the FTC Act. Therefore, all of the Guidelines could theoretically apply to promotions advanced by medical providers.

MJ: The Guides used to allow for a disclaimer of “results not typical.” The revised Guides no longer contain this safe harbor. How should health care providers that perform aesthetic procedures, for example, and advertise via testimonials and photographic results adjust to the revised Guides?

FTC: One of the things that is going to be different has to do with the impression left from the ad regarding the typical experience or results. Not only is it advisable to indicate that results may vary, I would go beyond that and try to identify factors that may account for the variability of results. Ultimately, it all depends on the wording and layout of the advertisement.

MJ: Just to be clear, does the Commission consider a photograph an endorsement?

FTC: Depending on its use, a photograph could be well be considered an endorsement, even if it is not accompanied by text.

MJ: There are a variety of Internet sites that “rate” physicians. Some provide critiques of many industries such as Angie’s List and Yelp.com, where as others are industry specific to the medical field such as DrScore.com and RateMDs.com. Because of the anonymity of bloggers on this site, there is a general fear in the medical community that the sites are being manipulated either positively or negatively. Is this generally a concern for the Federal Trade Commission? If so, can you generally describe the Federal Trade Commission’s approach to this situation?

FTC: There are two issues here. If a physician goes onto a rating site and posts a glowing review of his or her services and does not disclose his or her identity, that would be a violation of the FTC Act.Secondly, negative comments about an individual would not be considered an “endorsement.” However, should the negative comments be posted by an ex-spouse or former employee posing a patient, this would be considered deceptive. Deceptive comments in this forum would also be considered a violation of the FTC Act even though this is not specifically addressed in the recent Guides.

MJ: Does the Federal Trade Commission have legal authority to determine the identity of anonymous bloggers?

FTC: If the anonymous blogger in question is relevant to an ongoing investigation of the FTC, the FTC has the legal authority to determine the identity of the blogger.

MJ: The revised Guides provide additional information on what the Commission considers a “material connection.” More specifically, a “material connection” is a relationship between an advertiser and endorser which a third party consumer would not expect. If a physician reduces his or her standard fee for a procedure for a specific patient, would that fee reduction be considered a “material connection” between the physician that patient?

FTC: The answer is yes. However, it may be helpful for me to give you a factual situation where I don’t think a disclosure would be required. Let’s say I went into a doctor’s office and I don’t have insurance, the physician goes ahead and treats me and decides that since I don’t have insurance, the physician will cut the [fee in] half. I’m so elated that I go on Craig’s List and post a comment on how wonderful the doctor is. This is not the kind of endorsement that would be covered under the Guides.

If, on the other hand, the physician tells me that he will take $500.00 off of the charges if I will appear in an advertisement for his practice, this is clearly an endorsement that would be covered under the Guides. I am getting something in exchange for the price reduction.

MJ: Are there any other areas of concern for the Federal Trade Commission when dealing with individual medical practitioners? If so, could you please share those?

FTC: I don’t think that there are any specific areas of concern for the FTC at the moment. However, the issue of before and after pictures on cosmetic surgery may become of interest. The idea of manipulating things or doing something at the core, would be prohibited by Section 5 of the Guides. For example, digital alteration of before and after photographs would be a violation of the FTC Act.

Given the recent revisions in endorsements and testimonials concerning advertisements, medical providers would be well advised to review their websites to verify compliance. Any endorsements by individuals who have received compensation now require a disclosure. Further, before and after photographs should be accompanied with a disclaimer noting that results vary from patient to patient and should list several factors accounting for variability of results. Finally, if a medical provider believes that he or she is a victim of malicious and false blogging, the FTC may provide assistance. Should you have additional ques-tions and concerns about the new FTC Guides, you should contact counsel.

Jeff Segal, MD, JD, FACS is founder and CEO of Medical Justice, a membership based organization that offers patented services to protect physicians from frivolus lawsuits, demands for refunds and internet defamation.

Michael J. Sacopulos, JD is General Counsel for
Medical Justice

For more information, go to www.medicaljustice.com