On Friday, the Federal Trade Commission announced a complaint against—and settlement with—Teami, a marketer of teas and skincare products that the regulator says spread misleading messages across social media, fueled by popular celebrities and influencers.
According to the FTC, Teami promoted “deceptive health claims” and arranged for “endorsements by well-known social media influencers who did not adequately disclose that they were being paid to promote its products.” While some influencers did provide adequate disclosures, at least 10, including rapper Cardi B and singer Jordin Sparks, did not and have received warning letters from the government regulator.
This action marks the first time the FTC has brought legal action against an advertiser using Instagram to promote unsubstantiated health claims, the agency said in a press call Friday morning.
“Social media is full of people peddling so-called detox teas, promising weight loss,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a statement. “Companies need to back up health claims with credible science and ensure influencers prominently disclose that they’re getting paid to promote a product.”
According to Influencer Marketing Hub, the influencer marketing industry is expected to grow to $9.7 billion in 2020, but only only 14% of influencers are currently “fully compliant with legal guidelines” from the FTC or its British equivalent, the Competition and Markets Authority.
The FTC complaint specifically addresses Teami’s 30 Day Detox Pack, which made dubious claims about its ability to help consumers lose weight. Other teas promised to help “fight cancer, clear clogged arteries, decrease migraines, treat and prevent flus, and treat colds,” the FTC said in a statement.
“Teami really helped me in the process of losing my baby weight,” Cardi B said in a November 2018 post. “I drink Teami to help curb my appetite and help my metabolism go a little bit faster.” The only disclosure she provided was the hashtag #TeamiPartner, which the FTC called inadequate.
The 10 influencers named in the complaint are Cardi B, Katya Elise Henry, Brittany Renner, Adrienne Bailon, Princess Mae, Jordin Sparks, Alexa PenaVega, Leyla Milani-Khoshbin, Jenicka Lopez and Darnell Nicole. They’re all accused of providing insufficient disclosures, often where an Instagram user would have to click “more” in order to view it. None of the influencers named returned a request for comment by press time.
On a press call, Smith said the agency is focused on punishing the advertiser right now, but have not ruled out additional action against the influencers.
“Influencers should be on notice: If you have a brand affiliation, you must clearly and conspicuously disclose material connections to the brand,” FTC Commissioner Noah Phillips tweeted following the announcement.
The order “imposes a $15.2 million judgment” against Teami, but the company will only be charged $1 million due to its inability to pay more, the FTC said. Smith said this money, rather than go to the Treasury, will eventually be returned to consumers through a redress program. Those duped by the weight-loss claims will be the priority, he said.
Teami did not respond to a request for comment.
This is not the first time the FTC has punished advertisers for deceptive practices on Instagram: In 2016, Lord & Taylor settled over claims that it paid influencers to promote sponsored content on Nylon without disclosing the news outlet’s financial relationship to Lord & Taylor, or that the article was paid for by the department store.
Teami is not the only company that has promoted detox teas in recent years—other brands like Bootea, Yogi and Flat Tummy Tea have as well.
In a statement, the nonprofit watchdog Truth in Advertising commended the FTC’s decision. “Marketers and influencers that enrich themselves by deceiving consumers with unsubstantiated health claims need to be held accountable for their false advertising,” legal director Laura Smith told Adweek. However, she said the FTC’s action stops short by not also punishing the influencers responsible for pushing the bogus products.
“Today, there are more than 1 million Instagram posts that bear hashtags associated with detox teas on Instagram,” she said. “This means that on any given day, a countless number of young consumers are exposed to this egregious and widespread deceptive marketing issue.”