Can You Say That in an Ad? Limited-Time Lies, Testimonial Traps, and the Real FTC Rules | Marketing on Trial

Summary

Special Ops Podcast Episode Summary

Title: Can You Say That in an Ad? Limited-Time Lies, Testimonial Traps, and the Real FTC Rules | Marketing on Trial
Host: Emma Rainville
Release Date: June 27, 2025

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In this episode of Special Ops, host Emma Rainville delves deep into the intricate world of marketing compliance, focusing on deceptive advertising practices, limited-time offers, testimonial authenticity, and the evolving landscape of FTC regulations. Joined by experts Ryan and Mike, the discussion provides valuable insights for entrepreneurs aiming to grow their businesses ethically and effectively.

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1. Understanding Deceptive Advertising

The conversation kicks off with Ryan addressing the nuances of deceptive advertising. He emphasizes that an ad can be factually true yet still misleading to the consumer.

Ryan [01:04]: "The ad needs to be truthful, not misleading, and well substantiated."

Key Points:

• Literal Truth vs. Misleading Content: An advertisement stating someone made "$100k last year" might seem impressive, but if that individual also invested $150k, the net loss renders the statement misleading.
• Reasonable Consumer Expectation: Advertisers must consider the perspective of the average consumer, ensuring that claims align with typical experiences rather than outliers.

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2. The Pitfalls of Limited-Time Offers

Mike introduces the concept of limited-time offers, questioning their authenticity and potential to deceive.

Mike [00:11]: "What does limited even mean? Is that tomorrow or is that next month?"

Ryan shares his skepticism about the genuine scarcity often portrayed in marketing tactics.

Ryan [02:00]: "Creating a false sense of urgency is misleading and can lead to FTC violations."

Key Points:

• False Urgency: Many "limited-time" offers are perpetually available, undermining trust.
• Legitimate Scarcity: Authentic limited-time offers involve clear, honest communication about availability, ensuring consumers are not misled.

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3. Evolving FTC Regulations and Compliance

Ryan provides a comprehensive overview of how FTC regulations have transformed over the past decade, shifting from a largely enforcement-based approach to a more regulated framework.

Ryan [08:47]: "The FTC can now issue regulations defining what it would deem as an unfair and deceptive trade practice and as a result could get civil penalties."

Key Points:

• Increased Transparency: With the advent of the internet, information about FTC actions is more accessible, leading to greater awareness among marketers.
• Clear Guidelines: The FTC now provides explicit regulations and informal guidance, reducing ambiguity about what constitutes lawful advertising.

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4. Navigating Income, Health, and Testimonial Claims

The duo delves into the specifics of making income and health claims, as well as the proper use of testimonials in advertising.

Ryan [12:19]: "You need to have written proof somewhere that that person actually made a million dollars."

Mike [12:53]: "Here’s my top 10 totally [incorrect claims]."

Key Points:

• Substantiation: Claims about income or health benefits must be backed by verifiable evidence.
• Typical Results Disclosure: If showcasing testimonials, advertisers must clearly state what constitutes typical results, ensuring that consumers are not led to expect unrealistic outcomes.
• Affirmative Disclosures: When highlighting exceptional results, advertisers must disclose that such outcomes are not typical to avoid misleading consumers.

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5. The Impact of Regulatory Changes and Enforcement

Ryan and Mike discuss recent changes in regulatory bodies under different administrations and the implications for marketers.

Ryan [16:03]: "Nothing has changed. What was the law yesterday or before Trump assumed office is still the law today."

Mike [18:47]: "Four years from now... everybody pays the piper eventually."

Key Points:

• Consistency of Laws: Despite administrative changes, the foundational laws governing advertising remain unchanged.
• Regulatory Vigilance: Even with potential reductions in enforcement manpower, the expectation to comply with existing laws remains paramount.
• Future Accountability: Marketers may experience delayed repercussions for non-compliance, reinforcing the importance of ethical advertising practices regardless of current enforcement intensity.

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Notable Quotes

• Ryan [00:00]: “That person might have made a hundred grand, but they also had to buy 150 grand into the market, and so they're actually down 50 grand.”

• Mike [02:30]: “We live in a world now where things can be automated and data can be searched and researched much faster.”

• Ryan [14:05]: “You need to have written proof somewhere that that person actually made a million dollars.”

• Mike [17:54]: “So, Ryan, we've gone from dirt spots, mail, infomercials, newspaper ads...”

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Insights and Conclusions

This episode serves as a crucial reminder for marketers and business owners about the importance of transparency and honesty in advertising. The discussions between Ryan and Mike underscore that while the allure of quick sales through deceptive tactics may be tempting, the long-term repercussions far outweigh the short-term gains. With FTC regulations becoming clearer and more accessible, businesses must prioritize ethical marketing strategies to build sustainable success and maintain consumer trust.

Actionable Takeaways:

• Ensure All Claims Are Substantiated: Whether it's income, health benefits, or testimonials, always back up claims with verifiable evidence.
• Be Transparent with Limited-Time Offers: Avoid creating false urgency; instead, communicate genuine scarcity.
• Stay Informed on Regulatory Changes: Regularly review FTC guidelines and updates to remain compliant.
• Disclose Typical Results: When using testimonials, clearly state what consumers can reasonably expect, preventing misleading perceptions.

For a more in-depth understanding and actionable strategies, listeners are encouraged to download the free playbook available at Special Ops Podcast.

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Transcript

[Ryan]

That person is saying, I made 100 grand last year, right? Well, that person might have made a hundred grand, but they also had to buy 150 grand into the market, and so they're actually down 50 grand.

[Mike]

So a limited time offer makes people need to buy it right away because I may not be able to get it tomorrow. What does limited even mean? Is that tomorrow or is that next month? What does that mean?

[Ryan]

Hey, these people are making a million dollars or hey, you know, there's all these Lambos and Ferraris and yachts and things like that. I mean, I hope that everybody's that successful, but very, very few are.

[Mike]

We live in a world now where things can be automated and data can be searched and researched much faster. All of it can be done through AI tools much faster and much more effective. Would you agree with at least that? So, Ryan, let's just define deceptive.

[Ryan]

Simple. Yeah, I think there's three components. Ad needs to be truthful, not misleading, and well substantiated. You can have an ad that is literally true, a statement that is literally true, but the FTC will say it's deceptive because it's otherwise misleading. And so think about this. You have a stock trading program where you are advertising. You have this methodology that will show you how to trade stocks better or whatever you're trading. And you tout an example of someone who's bought your course or your platform, whatever you're selling. And that person is saying, I made a hundred grand last year. Right? Well, that person might have made a hundred grand, but they also had to put 150 grand into the market. And so they're actually down 50 grand. So that whole statement is, while literally true, they made a hundred grand, but actually out 50,000, the reasonable consumer would say, hey, I made 100 grand last year. I mean, how to grant a profit?

[Mike]

So what is the definition of a reasonable consumer?

[Ryan]

So it's going to be audience specific. It is going to be, you know, the example I was just using about stock trading, your stock trading audience, you can assume that they have a certain level of knowledge about stock trading options, the core of the product that you're ultimately selling.

[Mike]

Right.

[Ryan]

If you are selling a dietary supplement that's geared towards elderly people, you know, you can assume that it would be more of like an 8th grade reading level, something that is easily understood. You're not using complex medical terms that would just go over anyone's head.

[Mike]

Use them.

[Ryan]

Yeah, exactly. You need to make it digestible, understandable, so that they can easily understand what you're trying to say.

[Mike]

So it really is an intent in claims and marketing perception of your reasonable customer.

[Ryan]

Correct.

[Mike]

That's super interesting. Love to give some examples or we'll do some examples of so risky marketing tactics. Play along.

[Ryan]

Sure.

[Mike]

Limited time only.

[Ryan]

I hate it because it's never really limited. It's, you know, limited. It's this false sense of urgency that we've kind of talked about. It's.

[Mike]

Can I argue for a minute?

[Ryan]

Sure.

[Mike]

I actually agree with you. This is. Everybody knows. I actually agree with him. But I went and played devil's advocate for a minute because I know what our clients, they make us really well paid janitors all the time. We joke about this, cleaning up people's messes because they just didn't want to vomit in the toilet. They wanted to go all over the place. So limited time only. Well, now we have 10,000 units of custom product. I haven't decided whether or not I'm going to do another manufacturing run. Technically it's limited time only.

[Ryan]

We've had this conversation.

[Mike]

So this is not my argument by the way. This is an appliance argument.

[Ryan]

So I'm going to say that that is more likely than not going to be misleading or it's not going to.

[Mike]

Be why you send Snap friendly.

[Ryan]

No, I think that it will be because we all know that it's like, well, it's only a 10,000 bottle run. And so yes, sure, if you were marketing this as truly a 10,000 bottle run, we've only got so much product left and then it's gone forever. Fine. But more often than not we're trying to create this false sense.

[Mike]

If we can do another manufacturing run.

[Ryan]

If we can do a more, we.

[Mike]

Can get all the Ross and we're.

[Ryan]

Actually going to be doing it, which more often than not, we're already kind of headed down that road anyway. But no, taking your hypothetical, not, you know, bucking it, there's only 10,000 bottles. We have no intention of going forward presently. You know, I say this almost tongue in cheek because it's like, you know, the second we make this decision, we're going to change that. But if there is no intention of going forward, it's a one off run, then I think that is, that's, it's a limited time offer. This is, that's fine. But as we all know, that changes because that decision that you're making at the limited time, that's not what you're going to get in trouble for. It's when you're on batch 10 and then all of a sudden you get hit with like a consumer class action or something saying that all of this is deceptive because you created this false market that doesn't otherwise exist.

[Mike]

So that's the problem solution. So a limited time for makes people need to buy it right away. Because what does limited even mean is that tomorrow, is that next month? What does that mean? So what are some ways, let's walk through some ways that we can create that same scarcity. And so we've talked about this in the podcast. If I may, how about your first month membership program is free or free T shirt. The T shirts can be limited time only. It's really easy to change the way, really easy change what the T shirt is and come up with a different design. Every 4000 t shirts come up with a different design. Weight loss programs think are the best for the T shirt model because you can have tons of like. So it's so hard because I can't actually see any weight loss. I'm just going to do insanity because they actually did this. So insanity. When you ordered insanity, you got an insane work jade or something. And then when you hit your goal weight, you got one like something like that. But they kept changing the design. And by changing the design, it was limited time only and it was on the bonus, not that whole product. So there are ways to do that. I need to buy right now.

[Ryan]

Creating a legitimate sale, right? I mean for a limited time only, we are going to slash this by X percent, provided that it's actually a sale. And we've talked on other podcasts about whether or not it's a sale or not. You know, so long as it's, as.

[Mike]

Long as you bounce back and forth and you, you can bring the sales back here and there, but you gotta bounce back and forth. I more like doing the bonuses that change for a limited time. When you buy X, you're gonna get this, this, this and this for free. And then all of these things, they don't even have to massively cheat. I don't know how you're going to feel about this, but I've done it where it's the same ebook inside contents, different covers and names. We didn't make any claims about the ebook because here's a recipe guy spring here for summer performance. Recipes can go for everything, right? But anyway, so.

[Ryan]

Well, think Mike Lindell, Mypillow Perpetual. Like he's got a, you know, he's, you see him in the press and he's gotten, you know, he has a.

[Mike]

Very big brain Too.

[Ryan]

Well, I mean, if anybody.

[Mike]

Big pillow for his big brain.

[Ryan]

I mean, if you asked anybody how much is a my pillow? I mean, I actually don't even know what it is.

[Mike]

I have no idea.

[Ryan]

But it's. But it's always never buying one. But it's always 99.95 on sale for like the same. It's always the same sale over and over and over again. And that's why he's got in trouble.

[Mike]

So, Ryan, we've gone from dirt spots, mail, infomercials, newspaper ads, not exactly going in order here, BSLs, webinars, all sorts of progression has happened. Tell me over the last 10 years, what's happened with regulations compliance. When I started in this industry, there's certainly compliance, there are certainly rules, and don't think that they were as well known or as well enforced as they are now. I think a lot of things have been a lot more dialed in by government agencies, but I still think a lot of people have a lot of misconceptions. And so as we do, I'd like to run through that with you. So tell me, where, where have we gone in the last 10 years?

[Ryan]

So we've seen a fundamental shift in the FTC for pretty much since its creation, it's always been a law enforcement agency. So it regulated the economy for unfair and deceptive trade practices by really bringing litigation enforcement actions. And then business was on notice because, you know, these cases would work their way through the adjudicative system and businesses would have to learn from that. The FTC went before the Supreme Court, lost a lot of its remedial authority. And fast forward, it quickly became a regulatory agency. So it could issue regulations defining what it would deem as an unfair and deceptive trade practice and as a result could get civil penalties. So no longer are we reading tea leaves and trying to guess what the agency is thinking right now. Just like other regulatory agencies, we have very clear lines of what the FTC thinks is lawful and unlawful. And so that's really been the shift that we've seen over the last five to ten years.

[Mike]

Yeah, we didn't hear about as many people getting in trouble 15 years ago, 20 years ago, as we do certainly been here. If people house arrest, actual jail time, kind of walk me through that, like, how did we go from the Wild west to quite regulated? And everybody knows that people do get in trouble.

[Ryan]

I mean, I think the Internet definitely made information get a lot faster. But even before that, I mean, people learned about things through newspapers. And so you would hear Massive headlines. But the run of the mill enforcement actions, the small offenders, I mean, there wasn't really a great place for the public to go and get that information. I mean, pre the Internet, you know, after.

[Mike]

Right. Where did you go? You were selling things, infomercials, to know if the FDC said you couldn't, couldn't do. I didn't even think of that.

[Ryan]

I mean, well, that's the thing. I mean, you were kind of either going to Title 16 of the CFR or calling a lawyer. I mean it really, the access to information literally wasn't ready, readily available. And so we are in the information age. Yeah. And so now there's a press release for everything. The FTC is very. Flashy is not the right word, but they're very proud of, you know, their consumer protection efforts and they issue a press release. And so those press releases say, you know, they have collected X amount of money from people and this is what they were doing and everybody should be on notice that this is what's prohibited. But even more so now we have, you know, hardcore regulations that say, you know, this is unlawful or this is what the FTC would expect. And there's a bunch of informal guidance as well. But really before the Internet age, it was a little bit more of the wild west. And the only thing that most marketers would have seen is the oh wow, this was a major headline in the Washington Post or, or something like that. So everything is much more condensed and centralized so marketers have access to this information. Now there, I think is a higher expectation that people are going to comply.

[Mike]

Makes sense. I want to run through some things and some of what we've talked about episodes went back to that. But I'm going to run through some things because what is changing in 2025? Right. What does the FTC want to see? So let's start with income, health and testimonial claims. What are my requirements? We have another podcast where we talk about some of the things regarding testimonials, but I want to dive a little bit deep here. What am I requiring?

[Ryan]

Sure. So let's start with income claims. If you are advertising, that's someone. If you buy my product. Right. So you need to have.

[Mike]

I don't make that much money, but I can teach you how. It's most of them, by the way.

[Ryan]

Exactly. So you need to have written proof somewhere that that person actually made a million dollars. And not only that, if you're going to tout that testimonial or that endorsement of your product, you need to show that that's typical. And so what does that mean? Like, if you teach a business coaching.

[Mike]

Course or may not.

[Ryan]

Not anymore. Not anymore.

[Mike]

A lot of people put it. And let me just finish, I want people to hear it. This may not be typical results. No, that's not an okay thing to do anymore. And a lot of people don't know this.

[Ryan]

There's an affirmative obligation to actually say what is typical. And you will be in FTC enforcement actions where you need to come up and say, okay, you were saying that this person made, you know, a thousand dollars or whatever the number is, made $10,000 this month. I want to see what your students had made over, you know, a certain period of time, whether it's stock trading or business coaching or whatever you're selling. If you're saying that people will make buy my product, I'm going to teach you or show you how to make more money. You need to be able to substantiate that. You need to show what is typical, not just like, hey, these people are making a million dollars, or hey, that, you know, there's all these Lambos and Ferraris and yachts and things like that. I mean, I hope that everybody's that successful, but very, very few are.

[Mike]

Look, just, just because I want to be like, really clear. What would typical results? What would the FTC say is typical? 50% of your. It's 75%, 90%. Like, so you feel confident it's gonna.

[Ryan]

Be the average consumer experience. So I'd say about like 50, everybody.

[Mike]

And average it out.

[Ryan]

I would average. Well, if you're gonna take one person, it needs to actually be that person's experience using the product. But you know, if, if you look.

[Mike]

In like, say, I'm very lucky.

[Ryan]

Well, income. So like, if, you know, Ryan, I bought your course and you're touting. Ryan is, hey, I bought your course. Ryan made a million dollars last year. You would want to show that, you know, I would say at least half of the, or at least maybe the median student population is making a million dollars. You know, that would be the typical results. If, if the vast majority of your students are only making like a thousand bucks, the FTC is going to argue, well, it's deceptive to go out there and say, well, this is. This person's making a million dollars. You know, a reasonable consumer would buy this course and expect to make a million dollars. Now you need to. There's nothing wrong with touting results and you should be able to. I mean, attorneys do it all the time. It's like, you know, of course there's always carve outs for attorneys, but like, and we'll say, you know, past, past success is not, you know, indicative of, you know, future cases and things like that. But, you know, you should be able to go out there and you can, like, look at our highest performing students. You need to just put people on notice that these are going to be atypical and affirmatively disclose that they're not typical. Like, sure, you, you shouldn't expect this.

[Mike]

Here'S, but here's my top 10 totally.

[Ryan]

You also need to be able to back up what the average consumer would be.

[Mike]

Ryan. It's not going to be the fastest one we've ever done, but I think it's super important because we both saw this article. I think I sent it to you and I was like, what the heck? And so we've watched people that we know on social media for weeks now talk about this regime change and what it's going to mean and how they're going to be able to do what they want and say what they want, how they want, when they want. So let's talk about that, the RFK news that made supplement founders sheer and people like ops who are going to have to clean up the mass panic. So just walk me through what they're saying and what you're thinking about. My own thoughts.

[Ryan]

Yeah, no, I mean, so rfk, I mean the whole Trump administration has been very anti establishment, very anti regulatory agency.

[Mike]

So they are the establishment album.

[Ryan]

Well, now they're gutting it. And so we've seen a large amount of FDA staff be laid off in key parts of the fda, which are really fundamental to patient safety and just the safety of all of us. But everyone has been cheering because RFK has a very, I would say, unique point of view on quite a few issues in the supplement space and many niches, truly. And so with the downsize in the federal government, everyone is thinking that, well, I mean, if there's not enough regulators, then I can basically say what I want. I want to emphatically say that is absolutely wrong. Nothing has changed. What was the law yesterday or before Trump assumed office is still the law today. And if everyone, and just for a little bit of context, when Trump was first in office, we had just as many, if not more FTC and FDA investigations going on as in the Obama administration. So this isn't going to be a fundamental shift. The law is going to stay the same. Perhaps some of the enforcement mechanisms will change.

[Mike]

Let's talk about that because there are a bunch of FDC and FDA attorneys, I believe that were hired. Hired to.

[Ryan]

Correct.

[Mike]

And they are gutting some of the agencies.

[Ryan]

It's everyone, really it is lawyers, I.

[Mike]

Mean, but let's unpack that for a second. So a bunch of lawyers fire and they're stripping down.

[Ryan]

And it's not just the lawyers, but it's also like.

[Mike]

Follow me for a minute. Okay, so the lawyers are going away, they're stripping down administrative people who answer emails, people who do research. They're all getting stripped. Right. Just follow me, bro.

[Ryan]

Got it.

[Mike]

Okay, that's true. They're not changing the laws of yes, no, no. So four years from now when the next person gets elected and they beef it all back up because multiple people have died from not taking insulin and tons of people are suffering from all kinds of ailment because they were taking weight. Label BS in a bottle of products and there are tons of complaints to the attorney general as we've seen in previous, I wouldn't say administration time period when they weren't so forceful in enforcing the compliance. You follow me so far. Now someone gets in that has a hard on for marketers again, which will happen eventually. How far back can they go?

[Ryan]

They can go pretty far back.

[Mike]

So I sell for the next four years I'll just take everything down. Who cares?

[Ryan]

Not going to happen.

[Mike]

So I think the point that I want to drive across, and I do like your points for sure, but the big point I want to drive across is yes, perhaps for the next four years people can really not worry so much about the regulations around labeling, around claims, around deceptive advertising. But everybody pays the piper eventually.

[Ryan]

Well, and there's. It's not just the fda, it's the ftc, it's state attorneys generals, it's consumer protection attorneys. So you know, yes, there might be less enforcement from the FDA because there's less man. Well, there's less manpower. And so what might have ultimately culminated in a full blown investigation or criminal enforcement action might be more of a warning letter or you know, some other slip on the. Sure.

[Mike]

Because you're going to tell me why they won't do it. We live in a world now where things can be automated and data can be searched and researched much faster, including marketing websites, labels on images from sales pages guarantees scarcity. All of it can be done through AI tools much faster and much more effective. Would you agree with at least that I would.