The Federal Trade Commission (FTC) ordered Teami, a detox tea company, on Friday to repay its consumers a whopping $1 million for false advertisements. The FTC also sent warnings to several celebrities and social media influencers for failing to disclose that they received compensation from such a company.
Teami advertised its detox tea to offer health benefits with the absence of scientific evidence to back the benefits. The tea claimed that it could cure cancer, prevent flu and boost weight loss.
Its products have been advertised across social media platforms over the past few years. It used social media influencers, like Kim Kardashian and Kylie Jenner.
FTC Sent Warnings to Celebrities Promoting the Product on Instagram
Several celebrities, including Jordin Sparks and Cardi B, promoted Teami products using their Instagram accounts. But they did not provide clear disclosures that they received compensation for promoting the products.
The FTC stated that endorsing a product on social media is okay but endorsers should disclose their financial relationship with the brand. The disclosure must be clear and conspicuous. The disclosure should also stand out.
Although the celebrities who promoted the Teami products did reveal that it was a sponsored post, the disclaimer was not visible. Users can only see the disclaimer after clicking the “more” option.
You can find a lot of detox teas on social media. They all promise to promote weight loss.
However, the FTC stated that brands must back up health claims with scientific evidence. The social media influencers must also disclose it to their followers that they receive compensation in promoting a product.
Social Media Influencer Marketing
Influencer marketing has become a popular way to market brands and products. The reason for this is that this type of marketing is a form of word-of-mouth recommendation.
Most of us trust the people we admire. And these people are typically those rich and famous ones. They are also the people who possessed the qualities that we aspire.
That’s why brands are paying celebrities to endorse their products. It does not matter whether or not these celebrities are using them.
In the world of social media marketing, the endorsers don’t have to be mega-stars. They just have to amass a huge audience that can have a massive impact on the brand.
When you open the Instagram app, you will find dozens of posts about a new tea, restaurant, food, etc. Then, you will find the hashtag #ad in their caption.
Because of the growing sponsored posts on Instagram and other social media sites, the FTC created a guideline for social media influencers. The guide shows when and how they must disclose ads. The goal is to ensure transparency to their audience.
The rules will protect consumers from those ads that only deceive people. Consumers now are relying on influencer recommendations before they make a purchase. To protect them, FTC wants the influencers to state that the post is a paid ad.
Teami settled the complaint with the FTC. The settlement, however, prohibits the company from making unsupported weight-loss claims. Then, they should pay $15.2M to consumers. However, the settlement amount may be reduced because the defendant may not afford it.