Several new FTC guidelines go into effect as of December 1, 2009 that marketers need to be aware of. These guidelines cover how testimonials, endorsements and, in particular, paid blogging must be handled.
Firstly, this should not be construed as legal advice in any way. I would encourage you to become familiar with both the guideline summary and the revised guidelines themselves:
http://www.ftc.gov/opa/2009/10/endortest.shtm
My understanding is the intent of these revised guidelines is to ensure endorsements are fully-disclosed; e.g., a paid blogger must disclose that she is blogging on behalf of a client who has paid for the endorsement or review.
The other change is in how testimonials must be represented. In the past, one could take the most positive testimonials and display them as prime examples of the results or outcome that could be expected from using a given product. If the results represented by the testimonial aren’t typical, one was required to indicate “Results not typical” or some similar indication that the results being touted aren’t typical, and that was that.
The FTC found that consumers largely ignored this disclaimer (and advertisers may have put it small fonts so it wasn’t noticed easily). This is now considered a deceptive or misleading practice. My understanding is that if one displays one or more testimonials showing certain results were achieved by certain customers, under the new rules the advertiser must now indicate the “average” or typical results, as well.
So for example, in these Get Rich Quick schemes shown on TV, with glowing testimonials from the housewife who’s making six-figures part-time from home, now the advertiser must also tell the rest of this story… for example, “while these people did well with our program, the average buyer never puts the program to use or actually loses their investment.”
Clearly the FTC is aiming to clean up the out of control paid-blogging and non-representative testimonials being used to convince consumers to buy a given product.
Now, this is not advice or a recommendation, but what I see others are doing. Many Internet Marketers are removing all customer testimonials and case studies that make an income claim from their website. I find it interesting that these folks aren’t just posting the truth – what the average results are from their programs. One can only assume the truth would not set them free 
On the other hand, if you are selling a legitimate product that does deliver what you promise (let’s hope so), then what’s there to be afraid of? For example, for one of my products where testimonials are presented, I have polled my customers and asked them to rate their results. I plan to publish these findings, to provide a fair, factual and balanced perspective to prospects.
For example, for one of my online business I ran this survey:
In my case, I believe this is responsive to the requirement “the Commission notes that an advertiser possessing reliable empirical testing demonstrating that the net impression of its advertisement with such a disclaimer is non-deceptive will avoid the risk of the initiation of such an action in the first instance.”
My interpretation is that if you want to use testimonials depicting results or certain outcomes from your customers, you must also provide reliable information that accurately and conspicuously paint the whole picture for the consumer, as well – so there is no way that a consumer can be deceived.
Finally, like many, I have paid a few bloggers to review my products. I didn’t pay them to say nice things about our products, just to review and publish an independent review.
Nevertheless, this would likely be considered an “endorsement” under the new rules, so the paid review relationship must be disclosed when publishing such reviews or quotes/excerpts from said reviews. I have added the text “based upon a paid, independent review” in the same size font right below the reviewer’s name, so it is clear this review was performed independently, and it was a paid review).
So to everyone who is pulling the testimonials off of their websites, all I can say is, if you can’t provide customer testimonials, along with the true average results your customers are getting from using your product, they obviously should be gone – and perhaps you should stop selling that product, too!
There is no substitute for truth in advertising; a.k.a., “integrity“. If more companies operated with integrity, we wouldn’t have a world in such financial turmoil right now, would we?
I personally applaud the FTC for their new guidelines. It levels the playing field for those of us who are truthfully advertising our products, using actual customer testimonials (instead of exaggerated or even paid or falsified testimonials), and it protects consumers better than ever from online fraud.
And hopefully it will make bloggers more trustworthy in the eyes of our readers once again.
So, if you haven’t reviewed your own websites lately, now would be a good time to do so (the clock is ticking!)
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