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The Federal Trade Commission took action against Teami, alleging it used deceptive health claims and influencer endorsements that weren’t adequately disclosed.
Washington, D.C.—The Federal Trade Commission has taken action against another company it believes has misled consumers with its social media advertising.
The FTC filed a complaint against Teami, a marketer of teas and skincare products, alleging the brand and its owners claimed “without reliable scientific evidence” that its products would help consumers boost their metabolism, fight cancer, clear clogged arteries, decrease migraines, and treat cold and flus.
The complaint also alleges the celebrities and social media influencers—rapper Cardi B and singer Jordin Sparks among them—who did promotional Instagram posts for the brand didn’t properly disclose that they were getting compensated to do so.
They didn’t indicate it was a sponsored ad to followers until they clicked the “more” option on the caption, the FTC said.
RELATED CONTENT: FTC Seeking Public Comment on Ad Endorsement GuidelinesThe FTC said it sent warning letters to the 10 influencers named in the complaint who allegedly made “inadequate disclosures.”
In a statement that could be applied to many industries, Andrew Smith, director of the FTC’s Bureau of Consumer Protection said: “Companies need to back up health claims with credible science and ensure influencers prominently disclose that they’re getting paid to promote a product.”
View this post on InstagramA post shared by Adrienne Eliza Houghton (@adriennebailon) on Oct 2, 2018 at 8:15pm PDT
The FTC said the activities mentioned in its complaint continued despite having already sent a warning letter to Teami in April 2018, reminding the company that any material connections to endorsers must be clearly and conspicuously disclosed in their endorsements.
The court order settling the FTC’s complaints prohibits Teami from making the same kind of unsupported claims, requires clear and conspicuous disclosures its connection with the influencers, and imposes endorser monitoring requirements.
The order also imposed a $15.2 million judgment—representing the total sales of the products challenged by the complaint—that would be suspended after Teami paid $1 million.
Teami agreed to pay the fine.
The FTC has been consistently vigilant about proper disclosure of ads on social media as the use of influencers has increased.
In April 2017, the commission sent letters to more than 90 social media stars to “educate” them about proper disclosure and this past November, the commission released a “Disclosures 101” guide.
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