The disclosure rules everyone is breaking

$53,088

Per violation · zero penalty judgments so far

$53,088. That is the maximum civil penalty per violation available to the US Federal Trade Commission under Sections 5(l), 5(m)(1)(A) and 5(m)(1)(B) of the FTC Act — raised from $51,744 and effective from 17 January 2025, applying to penalties assessed after that date even for earlier conduct.

Per violation. In a business where a campaign can involve fifty posts or twenty-nine thousand radio spots, the multiplier is the whole story.

One flag before going further, because this beat rewards precision. The eCFR still shows $53,088 as the current figure. There is a July 2026 Federal Register notice cancelling a 2026 inflation adjustment, but that notice is the Securities and Exchange Commission’s, not the FTC’s, and it cites a funding-lapse gap in Bureau of Labor Statistics data. We could not confirm a separate FTC figure for 2026. Treat $53,088 as the number of record with its January 2025 date, and treat the current-year position as unresolved.

What the rules actually say

The Endorsement Guides were last revised in 2023, adding new and revised principles, examples and definitions. The core obligation is short. Anyone who “has been paid or given something of value” to promote a product must disclose that fact “clearly and conspicuously”.

Three things about that sentence get missed constantly.

“Something of value” is broader than cash. Free product counts. Sponsored trips count. Affiliate commissions count. There is no threshold below which a gift becomes invisible.

The disclosure must name the brand. Saying you were “sent some things” does not satisfy the requirement. The audience has to know who paid.

There is no safe harbour. The Guides do not bless any particular form of words, hashtag or placement. Nothing you can copy from another creator’s caption immunises you.

The three tests for “clear and conspicuous”

The phrase carries a specific structure, and it is worth learning because it is the part enforcement turns on.

Placement

The disclosure has to sit where users “aren’t likely to miss it”. The Commission explicitly rejects disclosures buried in video descriptions, dropped into comments, or hidden behind a “more” link.

Readability

It must use “a simple-to-read font with a contrasting background”. Grey-on-grey micro-text at the end of a caption is not a disclosure; it is a defence that has already failed.

Clarity

It must be “unambiguous, and understandable to the ordinary reader”. The test is the ordinary reader, not the sophisticated one, and not the platform-literate one.

The enforcement record, in dollars

$53,088 — maximum civil penalty per violation, effective 17 January 2025 (2026 position unresolved)
$15.2 million, suspended to $1 million — Teami LLC, 6 March 2020, on inability to pay
$9.4 million — Google LLC and iHeartMedia, announced 28 November 2022, final orders 9 February 2023, covering roughly 29,000 deceptive radio endorsements
$40 million — Skechers, 16 May 2012, over unsupported toning-shoe claims in a celebrity-fronted campaign
700+ — companies sent Notices of Penalty Offenses concerning endorsements, October 2021
5–0 — the Commission vote adopting the fake-reviews rule, 14 August 2024
0 — penalty judgments issued under that rule to date

The 2024 rule, and why it exists

On 14 August 2024 the FTC announced the Rule on the Use of Consumer Reviews and Testimonials, adopted on a unanimous 5–0 vote and effective 60 days after Federal Register publication.

It bans a specific list of practices: fake or false reviews and testimonials, expressly including AI-generated ones; buying positive or negative reviews conditioned on their sentiment; undisclosed insider reviews written by officers, managers or employees; misrepresenting a company-controlled site as an independent review source; suppressing negative reviews through threats or false accusations; and selling or buying fake social media influence indicators such as followers and views.

Then-Chair Lina Khan framed it in competition terms rather than consumer-protection terms alone: “Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business from honest competitors.”

The legal reason for the rule is more interesting than the list. After the Supreme Court’s decision in AMG Capital Management, the Commission largely lost its ability to obtain monetary relief in conduct-only cases brought under bare Section 5. Rule violations are different: they carry civil penalties. Writing conduct into a rule is how the agency gets its money back. That is the single most important structural fact about the 2024 rule, and it explains why an agency that already considered fake reviews unlawful bothered to spend years making a rule saying so.

Notices of Penalty Offences: the trap that has already been set

In October 2021 the FTC sent Notices of Penalty Offenses concerning endorsements to more than 700 companies.

The device is procedural and widely misunderstood. A Notice is not an accusation and not a finding. It informs the recipient that the Commission has already determined, in litigated decisions, that certain conduct is unlawful. Having been told, a recipient that later engages in that conduct is exposed to civil penalties it could not otherwise have faced.

In other words, several hundred companies are already past the point at which ignorance is available as a position.

What has actually been enforced

The record is smaller than the rhetoric, and specific.

Teami LLC, 6 March 2020 — the marquee influencer-disclosure case. The FTC alleged unsupported health claims, including that its teas caused weight loss and could treat cancer, clogged arteries, migraines, flu and colds, alongside inadequate influencer disclosures: the disclosures required a reader to click “more” to see them. The judgment was $15.2 million, suspended to a $1 million payment on inability to pay. Bureau Director Andrew Smith: “Companies need to back up health claims with credible science and ensure influencers prominently disclose that they’re getting paid to promote a product.”

The FTC also sent warning letters to the influencers involved, including Cardi B, Jordin Sparks, Adrienne Bailon, Katya Elise Henry, Brittany Renner, Alexa PenaVega, Leyla Milani-Khoshbin, Princess Mae, Jenicka Lopez and Darnell Nicole. Note precisely what that means: warning letters. The agency did not sue any of them individually.

Google LLC and iHeartMedia, announced 28 November 2022, final orders 9 February 2023 — $9.4 million over roughly 29,000 deceptive radio endorsements aired in 2019 and 2020, in which radio personalities described personal experience with a Google Pixel 4 they had never used. Seven state attorneys general joined the action. It is the best available illustration of what per-violation exposure looks like when the conduct is industrialised.

Lord & Taylor, 2016 — settled charges over a paid native article plus 50 paid Instagram posts by “fashion influencers”, none disclosed.

Warner Bros., 2016 — settled over undisclosed payments to influencers posting Shadow of Mordor gameplay videos.

Machinima, 2016 — a final order barring the misrepresentation of paid endorsers as independent reviewers, arising from an Xbox One campaign.

Two patterns run through all of it. The Commission goes after advertisers and intermediaries, not individual creators. And most matters settle, which means the case law creators keep waiting for largely does not exist.

The gap between the rule and the record

Here is the part that most coverage gets wrong, so we will state it flatly.

As of this compilation, no completed FTC enforcement action has produced a penalty judgment under the Consumer Reviews and Testimonials Rule. Not one.

The furthest the agency has gone publicly came on 22 December 2025, when it sent warning letters to 10 companies flagging possible violations: fake reviews, compensation conditioned on sentiment, undisclosed insider reviews, misuse of social media influence indicators, review suppression, and deceptive company-controlled review sites. Bureau Director Christopher Mufarrige: “Fake or false consumer reviews are detrimental to consumers’ ability to make accurate and informed choices about products they are buying.”

The companies were not named. The FTC expressly stated the letters are not determinations that any violation occurred.

So the accurate description of the position is: a unanimously adopted rule with real penalty authority behind it, an inflation-adjusted ceiling of $53,088 per violation, more than 700 companies already noticed, and — so far — a set of unnamed warning letters. Anyone who tells you the FTC has fined someone under the fake-reviews rule is describing a thing that has not happened yet.

The practical version

Strip out the case names and the operative rules are unglamorous.

If you received anything of value — money, product, a trip, an affiliate cut — disclose it.
Name the brand. “Gifted” without a brand name is not a disclosure.
Put it where nobody has to tap, scroll or expand to find it.
Make it legible: readable font, contrasting background, and visible for the duration in video.
Assume the ordinary reader is the test, not the platform-fluent one.
Do not buy reviews, do not condition payment on sentiment, and do not buy followers or views — the last of those is now specifically prohibited by rule, not merely frowned upon.

The enforcement gap is real, and it is temporary by design. Rules exist to be used, and the reason this one was written was to restore the ability to collect money. The interval between a rule taking effect and the first penalty judgment is not evidence that the rule is toothless. It is just the interval.

Sources

#disclosure #fake reviews #ftc #regulation

The disclosure rules everyone is breaking

What the rules actually say