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FTC: Tea Company, Influencers Cannot Make Unsubstantiated Claims of Product Benefits, Must Disclose Endorsement Agreements

  • The FTC reached a settlement with tea marketing company Teami, LLC and its owners (collectively “Teami”) to resolve allegations that Teami used deceptive health claims and paid social media influencers to promote its products without adequately informing the public that they were paid for their endorsements, in violation of the FTC Act.
  • In its complaint, the FTC alleged that Teami promoted its products with unsubstantiated claims that these products help consumers lose weight, fight cancer, decrease migraines, and treat and prevent flus, among other things, and paid online influencers to promote its products through social media posts that did not prominently display a disclosure about the influencers’ compensation for the endorsement.
  • Under the terms of the proposed stipulated order, Teami is prohibited from making unsupported weight-loss and health claims about its products and must display clear and conspicuous disclosures about material connections with any influencers featured in its advertising. The order also imposes a partially suspended $15.2 million judgment, of which defendants must pay $1 million.
  • The FTC also sent warning letters to ten influencers cautioning them about the inadequacy of the disclosures in their promoted posts.