May 9, 2017 / 9:24 PM / 3 months ago

FTC warns celebs Klum, Vergara, others about social media ads

89th Academy Awards - Oscars Vanity Fair Party - Beverly Hills, California, U.S. - 26/02/17 – Actress Sofia Vergara.Danny Moloshok

WASHINGTON (Reuters) - "Modern Family" star Sofia Vergara, supermodel Heidi Klum, former basketball star Allen Iverson and other celebrities have been put on notice by the U.S. government that they must tell fans about any compensation received for promoting products on social media.

The Federal Trade Commission, chief enforcer of truth-in-advertising rules, has sent dozens of letters to companies and stars over the issue, including one to Vergara for touting bracelets on Instagram.

Vergara's post on Instagram received more than 75,000 "likes" while Klum got 37,000 likes for a photo of herself with a Dunkin' Donuts coffee. Scott Disick, ex-boyfriend of Kourtney Kardashian, received 118 "likes" for praising teeth-whitening strips, according to letters the FTC sent to the celebrities in March.

Reuters obtained copies of the letters after filing a Freedom of Information Act request with the government.

The letters prodded the stars to disclose when they are paid to compliment products on Instagram or other social media.

Actresses Lucy Hale, Shay Mitchell, Troian Bellisario and Ashley Benson, stars of the hit teen show "Pretty Little Liars," also received FTC letters for praising clothing such as pineapple-print leggings, potato chips and facial scrub.

Letters went to more than 35 celebrities and more than 40 companies, including Adidas, Cabela's, Chanel USA, Johnson & Johnson, Dunkin Brands Group, Hasbro, Inc and Yves Saint Laurent North America.

None of the celebrities or companies contacted by Reuters for this story had any comment.

Model Heidi Klum poses at Elton John's 70th Birthday and 50-Year Songwriting Partnership with Bernie Taupin benefiting the Elton John AIDS Foundation and the UCLA Hammer Museum at RED Studios Hollywood in Los Angeles, March 25, 2017.Danny Moloshok

The FTC did not accuse the celebrities of accepting money or products in exchange for the Instagram boosts but it noted in the letters, which were largely similar, that truth-in-advertising laws mandate any payments must to be disclosed.

As advertising has migrated from television and print publications, it has become increasingly difficult to distinguish from non-advertising content. On social media, the demarcation line blurs when stars post family photos sometimes interspersed with products that they are paid to sell.

Sep 09, 2016; Springfield, MA, USA; Allen Iverson speaks at the Springfield Symphony Hall during the 2016 Naismith Memorial Basketball Hall of Fame Enshrinement Ceremony. Mandatory Credit: David Butler II-USA TODAY Sports

David Weintraub, owner of DWE Talent Management, helps celebrities make money selling products on Instagram. "Probably 40 percent of my roster makes a healthy part of their living via the Instagram endorsement business model," he said.

Someone with 20 million followers on Instagram, Twitter and other social media can earn up to $75,000 per post, Weintraub said.

"There is always a discussion about disclosure" in creating a post, he said, adding that putting #ad or #promotion hashtags in a post was adequate, in his view, to prevent any FTC problems.

The FTC appears to agree. In its endorsement guides, the agency said starting a social media post with #ad "would likely be effective" in disclosing that a star as been paid.

Dan Jaffe, head of the government relations office for the Association of National Advertisers, said the FTC letters were a "warning shot ... that something more prescriptive is coming. That's my guess."

The FTC settled with Lord & Taylor in 2016 over social media posts by select "fashion influencers" who put up photos of a paisley dress. As part of the settlement, Lord & Taylor agreed to ensure that future paid posts would be identified.

Reporting by Diane Bartz; Editing by Kevin Drawbaugh and Bill Trott

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