FTC also issue guidance to social medai influencers on how to disclose any endorsements
Following an investigation after a complaint with the Federal Trade Commission in the US, Trevor Martin (better known as TmarTn) and Thomas Cassell (better known as Syndicate) have settled charges that they 'deceptively endorsed online gambling service CSGOLotto, while failing to disclose they jointly owned the company'.
The post from the FTC also comments on allegations that other well-known influencers were paid thousands of dollars to promote the site via social media, including YouTube, Twitch, Twitter and Facebook, without disclosure of payments.
Following the settlement, the FTC has ordered that Martin and Cassell 'clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service'. However, they will not receive any further punishment or recourse over the complaint.
"Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts,” said the FTC's Acting Chairman, Maureen Ohlhausen. “This action, the FTC’s first against individual influencers, should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions.”
CSGOLotto, founded in 2015, is an online gambling service that trades and uses collectable items from the game CS:GO by Valve as virtual currency, which can later be exchanged for real money value. The site has Martin is the company’s president and Cassell is its vice president. Following the complaint and exposure of the two as owners, many YouTube videos came under scrutiny from the pair promoting and encouraging the use of the service.
Valve's game service, Steam, has since changed its terms and conditions to prevent gambling of this kind and the FTC has issued new instructions and a guide graphic to help other influencers stay clear of misrepresentation. Special mention is made of Instagram influencers, with over 90 letters being sent to brands and influencers in April 2017. Future violations of these orders may result in a fine of up to $40,654.