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Persuade Without Getting Sued: The Psychology of Compliance in DTC
00:35:32
Marketers are masters of persuasion…but where’s the line between influence and illegality? In this episode, advertising lawyer Robert Freund joins us to unpack how psychological tactics like loss aversion, authority bias, and default choices can...
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- [00:00]
Robert Freud
Foreign.
- [00:05]
Sarah Levenger
Welcome to today's show. Welcome back to Brave Different Brands. I'm Sarah Levenger. I'm joined by a really special guest today, somebody that I've actually been following religiously, like silently, oddly stalking you for a minute on Twitter just because everything you post is so interesting and it's very different from what we typically see on D2C Twitter in general. So yeah. Today's guest, Robert Freud, you have quite the history with specifically law in particular when it comes to dd. So you spent your career, it sounds like helping DTC E commerce brands kind of navigate that risky overlap between some of the stuff that I teach, which is like the psychological persuasive kind of aside, and then advertising law. So it sounds like you did a lot of stuff with like nine figure brands, startups you were defending companies from FTC investigations. I mean, I looked into kind of like your about page just to see what you've been doing in the last couple years. You kind of seem like you're the go to guy for those kind of mapping between clever marketing ideas and like actual real world legal stances. So welcome to the show. I'm excited to chat today.
- [01:07]
Robert Freud
This will be interesting. Yeah, thanks for having me. I'm excited too.
- [01:10]
Sarah Levenger
Okay, so we can dive into your background a little bit because I think your background is fascinating. But I want to start with talking a little bit about compliance when it comes to D2C and marketing in particular because a lot of us marketers came into the business as like, what would you call it? We just learned it by doing it. Nobody really taught us how to do E commerce. We just kind of learned over the course of like 10 years taking courses from other people who were two to three years ahead of us. I've never seen anybody that took a course in advertising law though, and I don't think I've ever seen an advertising law course. So let's talk a little bit about D2C and compliance. Do you have like a good best practice, like three different things that you've seen that's like these are the big things you gotta know.
- [01:53]
Robert Freud
I mean it's hard to pick three specific things, but I think I can give sort of an overview. So yeah, most of my what I focus on is helping consumer brands and ad agencies ideally avoid finding themselves in the kinds of lawsuits that I used to litigate in the first half of my career. So for the first six and a half years I was practicing, I was at a big law firm called Greenberg Trarig and I was litigating And a lot of the cases that I was exposed to and that I ended up focusing my attention towards were defending businesses against consumer class actions. And in California, a lot of those consumer class actions have to do with false advertising. So as time went on, I realized that area of the law, advertising in particular, was the most interesting to me of the areas I was exposed to. So I, I tried to focus on it. And in 2019, I had realized that staying at a big firm and litigating at a firm like that is not what I wanted to do forever for a number of reasons. And I left to start my own practice and I wanted to move away from litigating so much and towards helping clients understand how to avoid those situations. So most of what I do you could think of is like consulting, compliance, consulting type work. And I also handle related transactional work. Like if you're hiring an agency and need a services agreement or the other way around, or if you're working with influencers or affiliates or any third party vendor that relates to your business. That's the sort of stuff that I'll, I'll work on too. Interesting. So to answer your question, like where do you, where do you start with best practices for advertising?
- [03:54]
Sarah Levenger
Yeah, I was hoping there was three things so I could apply it to my own business.
- [03:59]
Robert Freud
Yeah, I mean, I'm sure we'll talk, we'll touch on at least three things throughout this.
- [04:03]
Sarah Levenger
I would love to.
- [04:05]
Robert Freud
Yeah. So a lot of what I focus on is FTC compliance. And the Federal Trade Commission is the federal agency that comes up with basically do's and don'ts that they can enforce through federal law that have to do with what we generally think of as false advertising. And those rules apply across the countries. And so no matter where you are in the U.S. or if you're outside the U.S. selling into the U.S. the FTC act and the rules that the FTC comes up with will apply to you. Because I'm licensed and, and live in Los Angeles, I, I spent a lot of time thinking and, and working with clients about complying with California's laws too. And California has a lot of, many of their laws sort of mirror what the FTC does, but some of them go beyond what the federal law requires. And some things are unique to California. And generally speaking, there are a number of exceptions to this, but California makes it as hard to do business as any state does. It's probably the most. Yeah, and it's like there's more risk doing business in California from a legal perspective than anywhere else. So like very broadly speaking, if you comply with everything California has, then you can be reasonably sure, with a few exceptions, that you're, you're okay for the rest of the state laws.
- [05:30]
Sarah Levenger
Interesting.
- [05:30]
Robert Freud
This is probably a good time to note, like, I have to say the thing where I'm a lawyer but I'm not your lawyer, and, and this is not legal advice, it's information and all that. So broadly, like when the FTC is, is trying to convey how businesses should think about advertising law, there's really like three basic requirements for any type of claim that you're making in an advertisement.
- [06:01]
Sarah Levenger
Okay.
- [06:02]
Robert Freud
And it's like general truth in advertising principles. And it sounds really common sense, but there's, there's a lot that can get more specific than this. But basically, if you're making a claim about something that you're selling a product or service, then that claim needs to be true, like literally true. It needs to be not misleading, even if it is literally true. And it needs to be substantiated. Meaning if you're going to make some claim, you need to have evidence at the time you make the claim to support it. And the amount of evidence kind of depends on what kind of claim you're making. But that's like the most zoomed out thing. Like, are we saying things that are true? Are we making sure that even if we're saying things that are technically true, are we not misleading people? And can we back up what we say? If you have that covered, then that's a really good starting point when you're talking about claims you're making in your ads. Another big category of like, separate from the, the truth in advertising stuff, brands get in trouble with IP issues a lot. Whether it's trademark infringement issues or using content that they didn't create in house. Yeah. Whether they're working. Yeah. Whether it's something they got from an agency or they're working with creators or now generating AI stuff to put in ads, I sort of think about the issues that I advise clients about in those sort of two buckets. There's like the truth in advertising stuff. And, and I'm sort of putting all the federal and state consumer protection laws under that bucket. And then there's the IP stuff like rights clearance and, and trademark infringe, trademark and copyright issues and publicity rights issues under that other bucket.
- [07:54]
Sarah Levenger
Interesting. You have so many different like, experiences with this because just because I follow your content enough to know big brands and small brands all have gotten like dinged or they've gotten like at least flagged for these type of issues, thinking that, like, what we're doing is not that big of a deal, like, it's kind of true, or we kind of told people that we could do this. And it's interesting because one of the biggest ones I saw recently was Adobe got in really big trouble because they sort of told people, but it was like really hidden. And then what they didn't tell people was the biggest issue. And that's the reason why they got flagged for it. Now, Adobe's huge, so they clearly have people watching them constantly. But even the smaller brands, I think can benefit from this because again, as a market, I've been doing this for 17 years and there's still stuff I'm learning that's like, I didn't know we couldn't say that because to marketers it's just persuasive language. But to the law, like to the federal government, this is like, you can't say that in that way because it doesn't, it doesn't tell people exactly what's going on. And that's, I think the key point here is like, what is exactly going on inside your business and how you actually produce what you do. So like I said, the beginning. Sarah's terrified of getting in trouble. So sometime I'm going to have to come have you audit, like, my stuff just to make sure I'm compliant because I don't want to, I don't want to mislead people. Even though I'm very talented, I feel like I could do a lot of good work. I've been doing this a long time, but. Yeah, well, I don't know where to go to get information. So maybe that's my next question. How do DTC brands stay up to date on this kind of stuff? Because if I feel like it changes a lot or at least it's too fast for me to keep up with.
- [09:28]
Robert Freud
Yeah, that's a good question. And that's, that's a challenge. I mean, there's not. There's there. So the way I stay on top of new developments is number one, I do check the FTC's website every day to see what their, what press releases they have and, and look at what they're paying attention to. They, you know, to their credit, they have a pretty good database of, or I guess library of guidance documents and they'll take some of their, you know, some of the statutes are hard to read and they're just boring, even if you are an attorney. And they'll put together like, you know, Guide for businesses about reviews or pricing, guide for businesses or like what you can and can't do in native ads. And it's digestible but you have to sit down and read it and like know where to get it. But, and that, you know, even that only really gives you like the agency's perspective about what they think you can and can't do. And it doesn't really show you all the other ways that businesses are getting in trouble. So I'll look, I'll, I'll review their site. There's a number of big law firms that have advertising law blogs that I'll check every day also just to make sure I'm not missing anything in my own research. I've got Google keyword alerts set up and I have keyword alerts on a couple legal research platforms which obviously unless you have in house counsel, doesn't really help a brand very much. But the reason I went through all that is there's not really one place you can go and really feel confident that you understand everything that you need to be aware of in as you do business. So it's challenging, but those are places where you can like kind of piece together if you have the time and energy to go through it. What's, like, what's trending in terms of the ways that businesses are getting in trouble and, and maybe it'll flag an issue for you that if you haven't thought of before, at least maybe someone on your team in legal should take a look at, make sure you're not exposing yourself without knowing it.
- [11:36]
Sarah Levenger
Yeah, or, or hire an expert is probably the next person.
- [11:39]
Robert Freud
I mean, yeah, I didn't want to.
- [11:42]
Sarah Levenger
Say, yeah, you should hire me. I like I said religiously follow you just because I'm like, look at all these interesting things and I can point out in some of the posts that you've been doing on even the smaller brands, some of the things that I'm like, I've seen people do this specifically on the tactical side. So one of the things that was interesting, I don't know, this was like a month ago or somebody posted this on countdown timers and the fact that there's a lot of people getting trouble for having countdown timers on their website that basically just reset every day. And I find that fascinating. Now countdown timers are not as prevalent in D2C that I've seen, but we also use some of these like scarcity tactics, what we would call scarcity tactics to help people like make a decision quicker. We're trying to prompt behavior. And I, I try really carefully, especially when I'm talking about scarcity. I'm like, if you're going to say the sale ends in seven days, it has to end in seven days. Like, you have to off legally. You can't just keep it going, people. So this is why I always tell people, if you're going to use scarcity, great way to do it is to wrap it around holidays and cut it off. If it's a Father's Day sale, it has to end when Father's Day ends. Like, move on, just move on.
- [12:49]
Robert Freud
Right.
- [12:49]
Sarah Levenger
So I think we could probably talk a lot about this. I might. I'm going to switch these segments because we're going to talk about influencers, but we might talk about that last. All right, so I have kind of a rapid fire of, like a bunch of questions that I've just had for you for forever. I want to see what your take is on these. Not necessarily like, can I get sued for doing this? But I want to know, is this, like, compliant or is it not? Is it something that we should be more careful about or is it something that's like, nah, that's fine, you could probably do that. So we talked about countdown timers. Second one, can I say, like, best on the market without proof? Because a lot of brands say this, we're out. Best in the industry. Best in the business.
- [13:26]
Robert Freud
Yeah. So a lot of these answers, I think are going to start with it depends. And the other thing about, like, evaluating an ad for compliance, like, there's some things that are just like, in any context, you can't, you can't say certain things. Yeah, but a lot of it, the. Whether an ad is deceptive is based on, like, the net impression of the ad in context. So sometimes it's hard to zoom in and say, like, you know, language that might be okay in one ad, might not be okay in another one. Depending on what's shown, what else is shown on the screen or what else is said or what industry you're in, or. Okay, what have you. So an example, like, of how context might matter. Like, if you. Very quickly. When you're talking about a claim like best, I think it's helpful to understand what categories of claim there are under the law. So broadly, there's like two types of advertising claims. There's an express claim, which is something that can be literally proven true or false. Like this tea contains caffeine. Like, it either does or it doesn't. That's an express claim. An implied claim is one that might be literally true, but is open to multiple reasonable interpretations. And if you have that situation, you have to make sure that those three things that I mentioned at the beginning, like the claim is truthful, not misleading and substantiated. You have to make sure that's true for every reasonable implied claim, even if you didn't mean to make one of them. If a significant number of your audience members might take a message away from your ad, even if you didn't intend it, you need to substantiate it. So in the context of, like using the tea example, again, if you had an ad that said, you know, this is the best tea on the market. Yeah. That might mean. You might mean, like for relaxation. If it's like an herbal thing or something. And maybe you. Maybe you have enough support to make that claim. But if the ad, you know, says, let's say you, you showed a picture of like a before picture where someone is like, you know, £400 and then an after, and they're holding up the pants to show how much slimmer they are, an implied claim there might be, this is the best tea for weight loss. And even if you're like, no, no, we meant relaxation, you'd have a problem with that ad. Because best could be interpreted to mean something else.
- [15:59]
Sarah Levenger
So do you stress out, like, when you look at ads, are you just.
- [16:03]
Robert Freud
Like, I'm a lawyer, I'm stressing all the time? No, I mean, I feel this in.
- [16:08]
Sarah Levenger
My soul, though, because I'm like, we do this, like in marketing, we do this. And again, it's not on purpose. A lot of these people are very kind, wonderful souls that are just trying to make good businesses.
- [16:17]
Robert Freud
Yeah.
- [16:17]
Sarah Levenger
But I'm like, you're doing it on accident. Like, you got to be so careful. Yeah.
- [16:21]
Robert Freud
The other thing is with like, best might be a comparative ad, like you might be saying. Yeah. Not just like you're comparing yourself to someone else in the space. And again, depending on it depends on what you mean by best. Like if.
- [16:36]
Sarah Levenger
Okay. Yeah.
- [16:37]
Robert Freud
Sometimes a claim might not be either express or implied. And it might be something the law calls puffery, where it's like you sort of. It's sort of just such, obviously just boasting. And it's not really something that's falsifiable. Like you might say, like, the best burgers in la. Like, that's probably just puffery. And you're not going to need to substantiate a claim like that. Like most delicious food. Like, you can't really. I mean, you could do a survey or something. But that's generally like broadly speaking, fair. But if you're saying like, you know, best antivirus for X purpose, like, you're going to need to not only substantiate the fact that like your product can do what it says, but also in a head to head comparison comparing like products way better than everyone else in the market.
- [17:24]
Sarah Levenger
Does it actually do that?
- [17:25]
Robert Freud
Yeah.
- [17:26]
Sarah Levenger
Oh my gosh, this stresses me out a lot. Okay. Okay. So what I'm taking away from this is if you're making a general claim about like how awesome you are, you can say we're the best burgers in town, but you can't say we are the best burgers compared to everybody else because that, you have to be able to.
- [17:42]
Robert Freud
Well, I mean, back that up.
- [17:43]
Sarah Levenger
Basically.
- [17:44]
Robert Freud
It's. It, it depends on if, if you're getting, if somebody could interpret what you're saying as being more specific than just like where the greatest. So you know, is it like, I don't know, best aluminum goes into this product or something? I'm just sort of like spitballing. But like the more, I guess, I guess without trying to like give a million examples, the more specific you get with a claim, the more attention you need to pay to how it might be interpreted by a reasonable person or you know, more realistically like a plaintiff's lawyer who's trying to argue that something is reasonable.
- [18:24]
Sarah Levenger
This is terrifying. Okay.
- [18:27]
Robert Freud
Yeah.
- [18:27]
Sarah Levenger
I mean, okay, so specificity, be very careful with. In general though, you can say I'm the greatest in the world.
- [18:34]
Robert Freud
Yeah.
- [18:35]
Sarah Levenger
Because that's just a subjective claim that I'm making about myself. But I can't say I'm the best like psychology based marketer in the world because there might be other people who will come in and say, okay, prove it type of a thing. So be careful with specificity, I think is what we're.
- [18:47]
Robert Freud
Yeah. Or if you said like rated number one, that's like very obvious. Like well, you know, in what context, who rated you, things like that.
- [18:55]
Sarah Levenger
Okay. All right. Oh, all right. So best in the market. Just be careful with how specific you go with what kind of best you are. Second question that I have on here. I know we're trying to do rapid fire, but then I get really curious and I have to go like deep into these. So this is one I see used a lot. Can I use a quote from a customer that says that something specific happened to them because they use the product? For instance, this product cured my anxiety. Right. This is used constantly. Yeah. And I don't know Is this. And of course it depends. But yeah.
- [19:27]
Robert Freud
So any, the starting point is understanding that if you're going to use a testimonial or a review in your advertising, like if it's on your website or in an organic post or something that you reshare or whatever, the law will treat that as though it's the brand's advertising directly.
- [19:48]
Sarah Levenger
So you know it comes from a customer.
- [19:50]
Robert Freud
Yes. It's attributable to the brand as though you put it on like a product label, like to the same degree.
- [19:56]
Sarah Levenger
Wow.
- [19:57]
Robert Freud
And so again, the truthful and not misleading and substantiated things need to apply to whatever that testimonial is. And so if you have like, let's say we're using the tea again and somebody says like, I lost 30 pounds in a week after drinking this. Even if that is true, and even if they, they could substantiate it, like they took a photo every day on the scale, whatever. Even if all of that is correct, if you have a performance claim like that, then the experience that you're advertising through that testimonial, it has to reflect the typical expected result for a customer who's using your product in the way most people do. So if, if you know that the typical customer loses half a pound in a week and not ten pounds, then if you're going to use a testimonial that says I lost ten pounds in a week, you have to clearly and conspicuously disclose that that is not only that that's not a typical result, but also what the typical result is and be able to substantiate that typical expected result. So this is brilliant. Trouble with that a lot.
- [21:14]
Sarah Levenger
Yeah, that's crazy. Especially because I, for any brand on the planet, most people are trying to use these large scale like giant claims to say, look at how amazing our product is. Which I get it. They're trying to market, they're trying to gather a lot of people who are interested in losing a lot of weight. But I think the call out here is conspicuous because I've seen some people try and do like italicized, very teeny tiny font that just says not typical results. But they don't usually make it very obvious and secondary. They never tell me what the actual typical result is. I haven't ever seen that. That's interesting.
- [21:45]
Robert Freud
Yeah.
- [21:47]
Sarah Levenger
My gosh. Okay, marketers take note. Like if you're doing stuff like this, you just be careful. Like just, you gotta touches on the.
- [21:57]
Robert Freud
It touches on the IP rights thing too. Like you need permission from whoever the person is who's. Whose quote you're using. If you're putting their full name or if you're, you know, like taking an Instagram post that they made or something and then putting it on your website. If they're, I. If they're identifiable, like through. If it's a video of a person saying that, that's a pretty clear, like, we need to have a rights release from this person, not only from the copyright perspective because they made the video, but also for the publicity rights side of it because we're using this person's, you know, face and image in our advertising. So in addition to making sure that the testimonial is true and, and all the things in the first part, you, you, you don't want to run into the IP issues either.
- [22:44]
Sarah Levenger
Okay, so digging down deep into this, because this will go into the influencer conversation. If we have a generalized name, say it's just like Sarah L. And we have no picture of her, it's just her random reference name. Nobody would be able to identify her ever. Is that a little bit more on the PC side of this, like compliance.
- [23:01]
Robert Freud
Focus for the publicity rights piece? Yeah, if it's still like audio, visual content, like they took a photo or a snippet of a video, then there's still a potential copyright issue if you didn't get a release from them to do that.
- [23:16]
Sarah Levenger
Dang, this is good to know. Yeah, good to know all this stuff because again, some of this stuff I didn't know. Like, I figured if they sent a review and as a brand we take it and use it as something in advertising or wherever, just to social, Social proof. We're not trying to do anything weird or mean to them. It makes sense that we would need to ask whether their faces on our website or whether their testimonials anywhere close to our brand. It's harder, I think, for these brands that are constantly using them as a way to just generate good traction because the more social proof you have, the easier it is to get people in the door. So good takeaway from this. If you, if you're going to use any sort of social proof quote, you got to make sure you ask permission, especially if you're going to use their face or their video. And then, yeah, you're going to have to get some sort of a release form basically to say that they can use it. Especially for the long term.
- [24:06]
Robert Freud
There are, I mean, if, if it's just like a very short review and there's no audio, visual content, then you're probably okay in terms of getting releases to use testimonials and reviews, you don't necessarily have to send out, you know, every single person, a release form. There might be an opportunity, depending on how you're gathering those reviews, to have people agree to something when they submit a review that includes that kind of rights release. So that, like, you, you know, like, for sure, just the fact that the review exists means that the person who wrote it has given you permission to use it and their name or whatever it is.
- [24:44]
Sarah Levenger
I wonder if this would. You would do better to actually create a community then and have some of the community rules just be. If you guys submit any sort of text in here, we have permission to use it in our advertising or anywhere else. And if they click, yeah, that's cool. Then you can move forward. Like that kind of a thing.
- [24:59]
Robert Freud
Yeah, that would be one way to do it. Yeah.
- [25:01]
Sarah Levenger
Okay, compliance, guys. We're talking about compliance today. Now, Sarah's going through a checklist in my head of like, okay, go get, like, everybody on some sort of something. Because it's important to make sure. I don't want to break any rules, for one thing, but I also want to make sure that, yeah, the people that are being used in any capacity on any brand have submitted to promoting that brand. Because, yeah, sometimes I think we just pull quotes thinking, oh, well, they said it about us, so we are legally able to use it, which is not always true. So. Oh, okay, Last topic that I hear, because I know we're already at 25 minutes. What is this? How does this apply to influencers? Because influencers seem to be writing up their own contracts these days and brands are struggling with it. How do we know what can be used and what can't?
- [25:46]
Robert Freud
Yeah, I mean, it really just depends on what's in that contract. I mean, ideally, your brand has a template that you can adapt depending on the type of campaign you're running that is clear about how you want it to work. Like, do you want to own the content outright? I see on Twitter a lot of brands and marketers complaining about influencers who want usage rights that either aren't perpetual or they retain ownership. Make sure that your agreement reflects what you're willing to accept and what you want. And, you know, it doesn't really make sense unless we're talking about an extremely famous influencer or something where you're willing to go away from your template. But, like, I think that at this point, a lot of creators expect, okay, the brand's going to send me the contract and maybe there's a couple points in negotiation in terms of cost or maybe the usage, but I'm not going to send them mine. And it's just a much better practice to have a consistent document for your brand so that you can keep track of them easier and that you understand. Like, all right, we always use this. And so I know that if we ever get a complaint about image rights or something, it's probably not something to worry about. Versus a lot of people are using ChatGPT to write their own agreements and stuff now and it becomes a mess if you have to constantly be looking back over 10 different versions of a document that's supposed to do the same thing. So really just like when working with influencers and, and the disputes that come up, it all comes down to, almost all comes down to what's in the agreement.
- [27:22]
Sarah Levenger
And yeah, yeah, well that's, I, I can't imagine that chat is very easy for you guys on like the, like the law side because it just, it generalizes a lot, but it also tailors the language based upon the person that's interacting with it. So you guys have now all these weird contracts that are like, chat just wrote it. How do we know that this is actually legal? Yeah, I mean, bonkers. That would stress me out. Like as a lawyer, I think I would quit. I'd be like, okay, I mean guys, too ridiculous. Ah, is it weird over there when you get those types of things?
- [27:56]
Robert Freud
It's just annoying now because I can, I can almost always immediately tell like, all right, this is not written by a lawyer. It's written by a piece of software that kind of looks like it can write like a lawyer. But like, you know, a lot of times you'll, you'll have a long document that just doesn't make sense for the deal at all because GPT doesn't understand really like what you need. It just, it basically makes things that look like, oh, this looks like a contract. You know, it's much more annoying, it's much more annoying when people use them to send demand letters. Like I've dealt with three of those this week where a brand gets like a five page customer demand letter that's obviously written by GPT because it's like citing all of this case law things that, you know, most lay people would never do and all the cases either don't exist or they, they're just wrong. That is, it's just more work to deal with. Like, oh my gosh.
- [28:50]
Sarah Levenger
Well, I can imagine that the, the government's eventually going to put something in place that says you cannot submit anything that GPTs have written.
- [28:58]
Robert Freud
Yeah.
- [28:58]
Sarah Levenger
Or even if you don't, they should.
- [28:59]
Robert Freud
Like, courts right now are saying, like, there are a number of courts across the country that say, like, if you have used GPT to help you write something, you submit with this court, you have to tell us. And lawyers and non lawyers alike are still like, a lot of my tweets recently have been about people getting in trouble for ignoring that and, like, submitting fake cases and all of this.
- [29:21]
Sarah Levenger
So that is the craziest thing. I'm just like, I, I. Why would you try and like, defraud a Kate? I'm like, what? Like what? I'm okay.
- [29:31]
Robert Freud
It's unbelievable.
- [29:32]
Sarah Levenger
I mean, it's truly compliant out here. I don't want to take this into a courtroom and be like, hey, I'm just gonna randomly. That is crazy. Okay. All right, so, ah, this has been invaluable. I always appreciate people coming on the podcast because I'm like, this is just part for me. So that not only can I tell my clients, like, hey, you guys should audit your systems, audit your ecosystem, make sure that everything you're claiming is actually true, that you have proof to back it up. And anything you're saying that might be like a gray area, fix it. So it's not a gray area, do that. But also for my own benefit, like, my own business. I've been an entrepreneur for years and years. Like, I've been. This is like 17 years that I've been in marketing. But again, I started at 20. I didn't know anything about business. Like, I was a graphic designer, like, and people just hired me and I just kept getting clients on. And that's how most e commerce brands, I think, came to be. But this is the type of stuff that I'm like, I wish there was more education around what's legal and what's not. I just don't know where to go to get it. So this is invaluable. Thank you. Last question I have for you. Feel free to turn this down just because it's a weird question. What's the weirdest case you've seen?
- [30:40]
Robert Freud
One of the funnier ones to me that, that I still think about is, well, I'll give you two real quick. One was a false advertising case where somebody tried to sue either Kellogg or Post or whoever makes Captain Crunch. I can't remember. They. There's. I don't know if they still make this cereal, but, like, they used to have Crunch Berries and Captain Crunch.
- [31:02]
Sarah Levenger
Yes.
- [31:03]
Robert Freud
And the claim Was that that was false advertising because the, the consumers believed that there was real fruit in the cereal. And the judge issued an order. Well, that's what they said. There's a ruling from the judge saying, like, the court is not aware of any fruit on planet earth called a crunch Berry. And so that's not reasonable.
- [31:27]
Sarah Levenger
I'm glad somebody was like, no.
- [31:30]
Robert Freud
Yeah. The judge is like, no, we're not doing that. We're.
- [31:32]
Sarah Levenger
That's amazing.
- [31:33]
Robert Freud
Another one from more recently was there was a class action against PF Changs because the California roll on the menu said it includes crab mix. And like crab is spelled with a K. And like, I know, and I think a lot of people know, like when you see on a sushi menu, crab spelled with a K, that means it's like imitation crab, imitation crab and not real crab meat. But the lawsuit was, well, we thought this was crab. And so because it's not actual real crab meat. And the court allowed that one to continue. And it went up to the court of appeal in the 9th Circuit. And the 9th Circuit said, yeah, I mean, plausibly stated a claim that this could be a misleading thing on the menu. And they settled for it was some millions amount. What? Yeah. So there you go. I think that first of all, who.
- [32:27]
Sarah Levenger
Has this kind of time, who's like sitting at a restaurant having a nice dinner, just being like, that's okay, instead of a C, we should sue. Like, what? Sarah doesn't have this kind of time.
- [32:37]
Robert Freud
The last thing is like that you touched that. That brings up the point that, like a lot of times I'll get the question, like, who is the customer out there that's upset about, you know, a five dollar purchase and they want to make a federal case about it? That's often not how it works. It's. Lawyers who have had success on a certain type of claim before will go out and try to find other businesses that are, that look like they're doing the same kind of violation. And once they've done their investigation, they'll run ads on Instagram. Like you might get them from time to time. Like, have you visited this website? You might get up to $2,000. That's because a lawyer has looked at that business, decided that's a case they'd love to bring. And then they just need to find one consumer who's willing to say, I'll put my name on that. And so that's how it gets started. So the person studying the menu is probably a lawyer.
- [33:25]
Sarah Levenger
Is a lawyer, probably like crowdsourcing Lawsuits. That's insane. Insanity. That's the craziest thing I've ever heard. I mean, I. Yeah. All right. This is the country we live in. Like, this is available. You know, this happens because the law allows it. This is the. I think this has been invaluable for the DDC brands in particular, because if PF Changs is running into it like they're, you know, there's an opportunity that it'll happen for any of these, even if you're small, even if, like, you're any size. Brands need to be much more educated on this type of stuff because it is happening. And a lot of it comes down to, I know you didn't know that this was the thing, but you have to know that some of this is the thing. So if you have some of these practices that you're currently using, even if you're doing it on accident, go back, audit your systems, take a look at it, and make sure that what you're saying is true, that you can back it up, and that you have a reasonable sense of how you would be able to prove it. Just in case somebody comes in and says, that's a K, not a C, we're gonna. That's bucket. Okay. Where can people find you if they want to follow you? Because I follow you everywhere. It's amazing. Where can people.
- [34:26]
Robert Freud
Yeah, for better or worse, I'm most active on Twitter right now. I'm. You can also find me on Instagram. They're both at Robert Freund Law and my website's robert freundlaw.com and I think that's got my email address and contact info on there. And. Yeah, that's it. That's how you can find me.
- [34:45]
Sarah Levenger
Yes. Follow him, guys. Follow, follow. And then again, if you need anybody that's an expert in specifically E commerce, DDC law, please, please, please go connect because you're amazing. I. This was great. Thank you so much for coming. Follow me at Sarah Levenger Everywhere you can see content, including on Twitter, because this is where we met was on Twitter. Yeah. Thanks for coming. Like and subscribe.
- [35:09]
Robert Freud
Brain Driven Brands is part of the Learn and Laugh series on the Quickfire Podcast network and is presented by Tether Insights. For more information, go to tetherinsights IO.