In a world run by social media, it can seem as if everyone is an influencer. From Twitter to YouTube and Facebook, social media influencers are sharing their opinions and recommendations on everything under the sun – including products. But what may seem like an innocent personal review may actually be considered an endorsement. Now, more than ever before, it’s easy to accidentally become an endorser.
But if that product you love turns out to be defective, you may find yourself on the wrong end of a lawsuit.
Who is Considered an Endorser?
An endorser is anyone who demonstrates, speaks out, displays or expresses an opinion, statement or belief about a service or product in a way that could influence another person’s decision to use or purchase the product or service.
Endorsers can be corporations, institutions, partnerships, groups or persons. Contrary to what you may have heard, celebrities and famous persons aren’t the only ones who can be considered endorsers.
The FTC has guidelines to identify when endorser laws may apply to you.
Are Endorsers Liable for Defective Products?
The short answer is: it depends.
“The rules set by the FTC do not just apply to celebrities,” says Cogan & Power, P.C.. “They apply to everyone and regular people can be sued for making false claims about a product. For example, a housewife who receives a free product in exchange for providing a testimonial about that product on a company blog or public product review site. The individual must disclose that they received a free product in exchange for their review.”
So, if you receive a free product from a company and are asked to give an opinion, you must disclose that you received the product in exchange for a review.
But what if you’re just an everyday person sharing your opinions and personal experience. In this case, you may not be held liable for personal injuries caused by your statements. Liability only comes into play if it can be proven that you received compensation for goods in exchange for your review or otherwise had a vested interest in the product.
In this case, your actions could be considered deceptive trade practices that may unfairly influence the public’s opinion.
Protecting Against Liability
If you’re working as an influencer, which means you understand that you must properly disclose your endorsements, then you can protect yourself from potential liability in a number of ways.
It may be worth it to do business as an LLC or a corporation to provide an extra layer of protection. Should you be the focus of a lawsuit, the business and its assets – not you and your personal assets – would be held liable. Consult with a lawyer to determine which entity would be right for your business.
Proper use of contracts can also help influencers manage liability.
The key most important thing for endorsers, or influencers, to understand is that discloser is absolutely necessary. The public must be made aware that you have essentially been paid for your opinions – whether your own or not.