Testimonials: take it from me ...

• Author: Pry, Carl G.
• Position: MARKETING COMPLIANCE

ALTHOUGH NORMALLY NOT A HUGE PART of bank marketing programs, endorsements and testimonials are sometimes used to convey that "human touch." A good message can have real punch if the endorser is considered trustworthy; even more so if that person is well-known.

But the law reaches even this form of marketing, not unsurprisingly (where doesn't it reach?). Banks, like any other form of business, must comply with the Federal Trade Commission's (FTC's) Guide Concerning the Use and Endorsements and Testimonials in Advertising. Last revised in late 2009, the Guide covers:

Any advertising message ... that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. There are a couple critical points to remember when using endorsements and testimonials in your ads:

* "Material connections" must be disclosed.

A material connection exists when there is some sort of connection between the endorser and the bank aside from the fact that the endorser is doing the ad. "Material" could be payment for the endorser's appearance in the ad or free services, for example (but merely being a customer of the bank isn't a "material" connection in this context). If this is the case, it must be disclosed in the ad. The use of a phrase such as "paid endorsement" is necessary.

This extends even to celebrity endorsements (rare but not unheard of in the banking world). If the celebrity promotes your bank outside a normal advertising environment (on a talk show, for instance), any material connection must be disclosed.

* Testimonials must be truthful.

This sounds like a standard requirement (especially in our Unfair and Deceptive age of enforcement), but in advertising it means the bank must ensure "that the...