Excerpt
Lord & Taylor was charged for misleading consumers with undisclosed paid promotions and influencer endorsements.
Our analysis
Lord & Taylor misled consumers by paying for native advertisements, including a seemingly objective article in the online publication Nylon and a Nylon Instagram post, without disclosing that these posts were actually paid promotions for their 2015 Design Lab clothing collection.
-Additionally, Lord & Taylor paid 50 online fashion "influencers" to post pictures of themselves wearing a particular dress from the new collection on Instagram, but failed to disclose both the free dresses and the substantial compensation they provided to these influencers in exchange for their endorsements.
- These actions violated the Federal Trade Commission Act, 15 U.S.C. § 45, and can be categorized as a deceptive practice involving fake social proof, where consumers were misled into believing that endorsements and promotions were unbiased when they were, in fact, paid for by the company.
Outcome
In the case outcome, Lord & Taylor is bound by a proposed consent order that forbids them from misrepresenting paid commercial advertising as originating from an independent or objective source. The order also prevents the company from falsely portraying endorsers as independent or ordinary consumers and mandates the disclosure of any undisclosed material connections between the company and influencers or endorsers. Additionally, it implements a monitoring and review program for the company's endorsement campaigns.
Parties
Federal Trade Commission and Lord & Taylor, LLC
Case number
Docket No. C-4576
Decision
Related deceptive patterns
The fake social proof deceptive pattern creates an illusion of popularity and credibility by presenting users with falsified or exaggerated endorsements, such as reviews, testimonials, or activity messages. This manipulation preys on the social proof cognitive bias, in which which individuals are likely to conform to the behaviour of others. It is a shortcut that allows people to avoid the hard work of carrying out a critical evaluation of their own. By using the fake social proof deceptive pattern, providers can trick users into making a purchase or engaging with their offerings.
Related laws
Prohibits deceptive acts or practices that misrepresent or omit material facts.