Nov. 19, 2018

Trump and Family Business Accused of Deceptive Advertising

Public Citizen Demands the FTC Investigate Trump’s Promotion of a Business ‘Friend’

WASHINGTON, D.C. – Before he was president, Donald Trump may have violated federal law by failing to disclose that he was paid to endorse a multilevel marketing business, even giving it airtime on his television show “The Apprentice,” Public Citizen said today in a complaint (PDF) to the Federal Trade Commission (FTC).

American Communications Network (ACN) executives appeared on “The Apprentice” twice; on neither occasion did Trump inform viewers that he was being paid to promote the company. During one of those television appearances, Trump merely referred to the executives as “friends of mine.”

Also, according to court documents in a case that former ACN participants are bringing against Trump and his family business, Trump endorsed the company 14 times between 2006 and 2015 but repeatedly failed to disclose that he was paid for these efforts. Rather, he claimed that his endorsements were not for money, but because he was impressed by the company and its leadership.

Section 5 of the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices in or affecting commerce,” which include deceptive advertising. Public Citizen is demanding the agency investigate these potential violations.

Additionally, according to the Washington Post, Trump also earned $450,000 each for three speeches he gave at ACN events between 2007 and 2015, according to his government disclosure form. However, in ACN marketing videos he told potential investors that his endorsement was “not for any money.”

“The law is clear: If knowledge of the connection between the endorser and the company could affect the weight consumers give to the endorsement, you must clearly state that you are being paid for the endorsement,” said Remington A. Gregg, counsel for civil justice and consumer rights at Public Citizen. “The fact that Mr. Trump was being paid to endorse a multilevel marketing business, and not simply doing it out of the goodness of his heart, was information that prospective ACN participants were entitled to know.”

“Companies have long used celebrities to push products and services on consumers, often in deceitful ways,” said Kristen Strader, campaign coordinator for Public Citizen’s Commercial Alert program. “The FTC has an obligation to protect the public from deceitful influencer marketing practices, even when the perpetrator is the President of the United States.”

“Through an investigation, the FTC can send a valuable message to celebrities who conspire with scammers to bilk victims that they’ll be held to account,” said Bartlett Naylor, financial policy advocate for Public Citizen.

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