Testimonials can kill your business! (FTC Ruling)

 The Federal Trade Commission’s new ruling on the use of testimonials came into effect on the 1st Dec 09.

If you use testimonials in your business, you need to read this.

On 1st dec 2009 the rules that set out how you use testimonials in your business as a selling and advertising tool changed.

Typically, most companies out there show their best testimonials to advertise and sell their products and services. It makes sense to do so, of course (why would you show complaints or anything less than your best feedback?)

However, The Federal Trade Commission has decided that this is (or can create) misleading advertising.

The problem is that  the testimonials don’t always reflect the average user experience. 

For example, if you searched the Internet (before today) for an online course in Marketing, you’d probably find dozens of websites with fantastic testimonials plastered everywhere showing how people who took the course became very wealthy as a result.

And here is where the misleading can arise: the truth is that those results are hardly ever typical results. It’s usually the case that 99% of the other buyers don’t become rich. In fact, most buyers don’t finish courses and some don’t even start them.

In short: most buyers don’t ever recoup their initial investment.

It used to be the case that you could get away with stating (usually in very small type) that ‘these results are not typical’. That would suffice as a disclaimer.

But this is no longer the case.

You’re now legally required to make it extremely clear what it is that you’re selling, and the testimonials you use must illustrate the average experience.

Failure to do so can result in a fine of around $11,000

The FTC also provided additional guidelines regarding contact information: the bottom line here is that you must display your contact information clearly and make it easy to find. Also, you should have a terms and conditions page and a privacy policy if you collect data (like e-mail addresses) that states very clearly what you’re planning to do with the data.

As a side note (and this is my own opinion) if your customers are very happy with your products or services and they all provide you with brilliant testimonials, then that represents the average user experience in your case so you should be fine.