FTC Act Section 5 prohibits unfair or deceptive acts or practices in commerce, and it is the legal backbone of every FTC social media enforcement action. Undisclosed sponsored posts, misleading claims in ads, fake testimonials, and hidden material connections between brands and influencers all get charged as Section 5 violations.
What FTC Act Section 5 Covers
The statute, codified at 15 U.S.C. 45, applies to any business, brand, agency, or creator marketing to US consumers, regardless of size. The FTC can issue cease and desist orders, and violations of orders or of trade regulation rules carry civil penalties that are adjusted annually for inflation and currently exceed $50,000 per violation.
What Marketers Should Do
For small businesses, the practical rule is simple. Every objective claim made in social content must be truthful and substantiated, and anything material that a reasonable consumer would want to know, such as a paid relationship with a creator, must be disclosed. Building substantiation and disclosure checks into your content workflow is the most direct way to stay on the right side of this law.
Source: United States Code: 15 U.S.C. 45
Report a violation: If you believe a business is violating this law, you can file a complaint at FTC Fraud Report.
