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June 3rd, 2011
FTC Brings First Enforcement Action Against a Consumer
The Federal Trade Commission ("FTC") recently announced that it reached a settlement with a consumer who provided an allegedly false testimonial in an infomercial for the "wealth-building" program "Winning in the Cash Flow Business" (the "Wealth Program"). The FTC, jointly with Colorado’s Attorney General, alleged that various parties involved in the marketing of the Wealth Program defrauded customers, in some cases out of thousands of dollars, with phony claims that they could make large amounts of money quickly and easily by finding, brokering, and earning commissions on seller-financed promissory notes.
The FTC alleged that the Wealth Program was marketed primarily through a 30-minute infomercial, which claimed that consumers could successfully earn substantial income brokering promissory notes in three easy steps. These claims were allegedly supported by testimonials from consumers who claimed to have made, "$1.2 million in 30 days," "$79,000 in a few hours," and "$262,216 part time," for example.
As part of its enforcement action, the FTC charged one consumer with making false claims about how much she earned by participating in the Wealth Program. The consumer has agreed to an order settling the FTC charges against her. The order is the FTC's first against a consumer charged with making misrepresentations in a testimonial.
If you have any questions about the FTC’s announcement, please contact Jeffrey A. Greenbaum at (212) 826 5525 or email@example.com, Terri Seligman at (212) 826 5580 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Advertising Group.
Other Advertising Law Alerts
FTC Updates Endorsement Guide FAQs and Settles First-Ever Action Against Individual “Influencers”
Recent developments demonstrate the FTC's continued interest in social media endorsements.
September 11 2017
FTC Announces Reforms to Its Investigative Process
Recently, the FTC announced a set of internal reforms intended to improve the process by which the Commission investigates unfair, deceptive and fraudulent business practices. The reforms relate to the Civil Investigative Demands ("CID") that the FTC's Bureau of Consumer Protection issues to request information from investigation targets.
September 7 2017
End of an Era at NAD?
Last week Frankfurt Kurnit's Advertising Group proudly hosted "A Twenty-Year NAD Retrospective: The Levine Legacy," an ABA program honoring Andrea Levine, on the occasion of her retirement as Director of NAD. With NAD transitioning to new (as yet unnamed) leadership, we thought it would be a good time to review some of the best practices that guide NAD practitioners every day.
July 10 2017