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FTC Fires Warning Shot to Marketers Who Use ChatGPT for
Digital Advertising or Sell AI-Enabled Products and Services

If we haven't made it obvious yet, FTC staff is focused intensely on how companies may choose to use AI technology, including new generated AI tools, in ways that can have actual and substantial impact on consumers. 

FTC Blog Post, May 1, 2023

Consumer Rights Regarding AI

FTC: These Rights are “Fundamental”

1. The right to know they're being advertised to: "It should always be clear that an ad is an ad."

2. The right to know whether search results or any generative AI output is “organic... or is paid.”...

Monitoring & Impact of AI Tools

FTC Regulations May Require Marketers to:

“Monitor and address the actual use and impact of any [AI] tools eventually deployed.”

The FTC Warns Marketers Regarding Ad Claims For AI-Integrated Products

“AI” is an Ambiguous Term

"One thing we know about hot marketing terms is that some advertisers won’t be able to stop themselves from overusing and abusing them."

Efficacy Advertising Claims for AI-Enabled Products & Services

Will Products Work as Advertised?

"For FTC enforcement purposes, false unsubstantiated claims about a product’s efficacy are our bread and butter."

Exaggeration of AI-Enabled Products/Services

Performance Claims are Deceptive if they:

* Lack scientific support, or

* Apply only to certain types of users or under certain conditions

Comparison Claims for AI-Enabled Products/Services

Comparison Against Non-AI Product/Service

* Do you claim that your AI-enabled product is better than non-AI product?

* "You need adequate proof for that kind of comparative claim."

Risks of AI-Enabled Products/Services

Are Marketers Aware of the Risks?

* "You need to know about the reasonably foreseeable risks and impact" of AI-Enabled products

* "Can't blame the developer if something goes wrong or it yields biased results".

* "Can't say you're not responsible."

Ad Claim: “Product in AI-Enabled”

Does Product Really Use AI?

Baseless claims that mention a product is AI-enabled can result in an FTC enforcement action. "Merely using an AI tool in the development process is not the same as a product having AI in it."

FTC Substantiation Requirements

3 Steps You Need to Follow

Step 1: Consider the Product (and the Type of Ad Claim)

Certain products are subject to specific regulations such as food and dietary supplements...

The FTC Requires Substantiation of the Net Impression of all Advertising Claims

6 Elements of Net Impression

Net impression is the overall advertising message/takeaway understood by reasonable consumers, not what the advertiser intends the message to be.

These elements are what you need to evaluate...

Comparative Advertising Claims

Are Comparative Ad Claims Legal?

Digital marketers often seek to position their products against a competitor’s products.

These claims are known as comparative claims because they claim either that the advertisers’...

Unqualified Advertising Claims

FTC: Unqualified Advertising Claims are High Risk!

What are unqualified Ad Claims?

  • Very broad claims,
  • That don’t provide information for the basis of the claim...

Do You Use Influencers
on Social Media to
Provide Credibility for Your Promotions?

FTC v. TEAMI

Influencers are persons who have developed a significant following on social media platforms.

Deceptive practices by influencers on social media are a top-priority concern of the FTC...

Do You Post Videos to Social Media Comparing Your Product to a Competitor's Product?

COORS v. BUD

Comparative advertising is a marketing strategy in which a marketer's product is presented as equal to or superior when compared to a competitor's product. Comparative advertising often involves a side-by-side comparison of the two products...

FTC Guardian™ Has You Covered

MEMBER ONLY COACHING

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INTELLIGENT DOCUMENT GENERATOR

  • 80+ Legal Documents
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  • Intellectual Property

LEGAL COMPLIANCE BLUEPRINT

  • Blueprint explains legal compliance step by step

TRUST SEAL RIGHTS

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  • Pop up certificate verifies membership agreement to follow FTC regulations and Code of Conduct

ENTERPRISE LEVEL MEMBERSHIP

  • Licensing: Enterprise Members generate income by licensing use of the FTC Guardian™ Platform to their clients for generation of website protection

What If FTC Compliance Could Become A Marketing Asset?

We Believe It Can!

After all, the pace of FTC enforcement has steadily increased since 2009, and it will continue at an increasing rate into the foreseeable future.

Your customers and prospects are becoming more aware of Privacy regulation. And they're also more aware of regulations affecting membership sites, continuity plans, and deceptive marketing.

FTC Guardian Members are authorized to display the Verified Member Trust Seal.

Display of the FTC Guardian Trust Seal could inspire trust in your prospects and customers.

As an FTC Guardian Member, you're required to comply with our Code of Conduct which states in part that you are committed to comply with rules and regulations regarding truth in advertising, including FTC decisions and regulations for:

  • Online Advertising Claims
  • Online Advertising Disclosures
  • Continuity Plan Disclosures
  • Testimonials and Endorsement Disclaimers

Privacy and Data Security of Personal Information.

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Member Testimonials

Great Compliments On The Website Legal Documents

… Chip, I continue to get great compliments on the website legal documents on my website. I'm always tempted to take credit since I also have a Juris Doctor Degree, but I always give you the credit.

Bob James , MD, JD, HealthwiseToday.com

My Unqualified Recommendation…

Over the last three years I've tried two other similarly priced website legal document services – not because I have money to burn, but because I wanted to see if I was missing anything. Neither of the other two came close to the comprehensive scope of FTC Guardian – the ongoing education alone is worth the price of admission.

This is an area that the Internet Marketing world seldom even mentions as an issue, but anyone who is starting or running an eCommerce website needs this service. My unqualified recommendation is: Get FTC Guardian NOW!

» Greg Smithhisler

Great Compliments On The Website Legal Documents

… Chip, I continue to get great compliments on the website legal documents on my website. I'm always tempted to take credit since I also have a Juris Doctor Degree, but I always give you the credit.

Bob James , MD, JD, HealthwiseToday.com

My Unqualified Recommendation…

Over the last three years I've tried two other similarly priced website legal document services – not because I have money to burn, but because I wanted to see if I was missing anything. Neither of the other two came close to the comprehensive scope of FTC Guardian – the ongoing education alone is worth the price of admission.

This is an area that the Internet Marketing world seldom even mentions as an issue, but anyone who is starting or running an eCommerce website needs this service. My unqualified recommendation is: Get FTC Guardian NOW!

Greg Smithhisler

Bravo! FTC Guardian is the best website compliance solution in the business.

Now you can perform a comprehensive FTC audit, generate appropriate notices and disclaimers online, and embed them on your websites. On top of that, there are step-by-step video tutorials, and a series of risk management videos every online marketer needs to see. FTC Guardian document generator covers it all – Basic Website Legal Compliance Documents, Intellectual Property Protection Documents, Customer Agreements, and Channel Marketing Agreements

Note: France Thorsen is an affiliate and is paid a commission on sales.

Frances Flynn Thorsen , Author, “Real Estate Social Media Policies And Procedures Manual”

Appreciate That You're Keeping Members Up-To-Date

Hello Chip, Thank you for that fine [Members Only Hangout] yesterday. I appreciate that you're keeping members up-to-date and that the [hangout] was both informative and short. I have a few questions I hope you can answer, perhaps in a future webinar…

C. Chapman

Very informative Members Only Hangout

Hello Chip, Thank you for a very informative Members Only Hangout. You asked for suggestions about topics for future hangouts and here are my immediate ideas.

P. Kershaw

You get an A+++ for your Hangout on WebinarJam!

Hi Chip Cooper! You get an A+++ for your Hangout on WebinarJam! Just watched it and I say BRAVO for a couple of reasons! You kept it short and to the point! (I've been hating the hangouts that drag on forever and suck up my time). You kept it relevant! You showed and stated that you respected my time! You gave me valuable info and connected the dots! As an Attorney you seemed likeable and down to earth…that helps to build trust and engagement. Super impressed! Looking forward to future events and community!

M. Green

A Great Service, Extremely Useful

I hate legal stuff, but you've created a site that makes it easy for me to draft contracts, contains pretty much every contract I've needed, and has reduced my legal costs.

Phil Schnyder , President & CEO, askSam Systems, Inc.

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Wow! Wow! [That's] all I can say about your online service. I've been all over the Net and nothing even compares to… your contract generator…

Greg Venable , CIO, Information In Context

Exactly What We Needed

Neat website you've got! Exactly what we needed for website legal compliance documents – quick and easy to use.

Jen McClurg-Roth , techshorties.com

Really Easy To Use

… thanks Chip, I love the service by the way. The wizard is really easy to use and the contract terms are right on.

Justin Johnson , CEO, PumpScout.com

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Website Legal Compliance Blueprint

For Use With The FTC Guardian™ Platform

Our Blueprint And Online Platform Make It Easy!

  1. Learn What You're Up Against

    Short videos will explain how the FTC operates and why compliance is critically important.

  2. Create Your Basic Website Documents

    Answer simple questions. Help text is provided. Documents are posted to your website with an embed code that you paste on your WordPress website and or any other site. Simple and easy!

  3. Create Supplemental Documents As Required

    These include documents for compliance with the membership site regulations, privacy agreements agreements for your service providers who have access to your server, etc.

  4. Create Your Customer Agreement As Required

    Remember, there's more to protecting your assets than cleverly worded disclaimers. Your Customer Agreement not only limits your liability, it also clearly establishes the business points you need to ensure a profitable transaction.

  5. Continue At Your Own Pace With Rules of the Road & Strategies

    This is the critically important final step. We provide the tools to help you develop your own risk-avoidance strategies. You need both documents and strategies for FTC compliance.

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Chip Cooper, Internet Attorney

Our 30-Day Money Back Guarantee

If you're not satisfied with FTC Guardian™ for any reason or no reason… Notify us per our Refund Policy below, and we'll gladly give you a complete refund, no questions asked.