Guide: law

FTC disclosure rules for UGCWhen and how to disclose

Whether a post needs a disclosure depends on whose account it appears on and whether the person in it has a material connection to your brand. This article explains the FTC rules and the typical UGC cases. It is not legal advice.

Start a project

Short answer

Under the FTC Endorsement Guides (16 CFR Part 255, revised July 26, 2023), a paid or gifted relationship between a brand and the person promoting it must be disclosed clearly and conspicuously, for example with "#ad" or "Paid partnership". In your own ads, the platform's ad label shows that the content is advertising, and when a creator posts on their own account, the creator discloses. Since October 21, 2024, the Consumer Review Rule (16 CFR Part 465) also bans fake reviews and testimonials, with civil penalties of up to $53,088 per violation.

The legal basis

FTC disclosure duties rest on the FTC Act and two documents that build on it.

Section 5 of the FTC Act	Prohibits unfair or deceptive acts or practices in commerce. Hiding a paid relationship behind an endorsement can be deceptive.
Endorsement Guides, 16 CFR Part 255	Explain how the FTC applies Section 5 to endorsements and testimonials. Revised effective July 26, 2023. A material connection that the audience would not expect, such as payment or free products, must be disclosed clearly and conspicuously, and on social media the disclosure should be unavoidable.
Consumer Review Rule, 16 CFR Part 465	In force since October 21, 2024. Bans fake or false reviews and testimonials, including ones that misstate the author's experience with the product, plus buying reviews with a required sentiment and fake social media indicators.
Civil penalties	Knowing violations of the Consumer Review Rule can cost up to $53,088 per violation, the maximum the FTC set in January 2025.
Advertiser liability	Under 16 CFR 255.1(d), advertisers can be liable for misleading endorsements and undisclosed connections and should guide, monitor and correct their endorsers.

The FTC publishes guidance pages such as "Disclosures 101 for Social Media Influencers" and "What People Are Asking" that show how it applies the rules in practice.

Brand account and creator account

For UGC, the account a video is published from decides who discloses.

	Ad from your brand account	Post on the creator's account
Who publishes?	your company	the creator, on behalf of your company
Is the advertising obvious?	usually yes, through the sender and the platform label such as "Sponsored"	no, to followers it looks like a personal post
Disclosure needed?	the platform label usually covers it	yes, for example "#ad" or "Paid partnership with [brand]" at the start, plus the platform's paid partnership tool
Who is responsible?	your company	the creator and, under the Endorsement Guides, possibly your company too
Examples	UGC as an ad on Meta or TikTok	paid post, Story, Partnership Ad, Spark Ad from the creator's account

In your own ads, the open question is not the ad label but whether viewers would take a paid creator for an independent customer. If they could, the Endorsement Guides say that fact should be disclosed.

Do's

A disclosure works only if people see and understand it without clicking.

Use plain words such as "#ad", "Ad:", "Sponsored by [brand]" or "Paid partnership with [brand]".
Put the disclosure at the start of the caption, before the "more" cut.
In videos, disclose in the video itself: on screen if the endorsement is visual, spoken if it is audible, ideally both.
Superimpose readable text on Stories and short videos, since many people watch muted.
Use the platform's paid partnership tool in addition to your own disclosure.
Make sure creators actually used the product and that every claim in the script reflects their real experience.
Treat free products as a material connection that needs disclosure.

Don'ts

These mistakes come up most often in FTC guidance.

Do not rely on vague tags such as "#sp", "#collab" or "#thanks" on their own.
Do not hide the disclosure in a hashtag pile, in the comments or at the end of a long caption.
Do not put it only on a profile or "about me" page.
Do not present UGC as a customer review or post it in a review section.
Do not write scripts that invent results or experiences the creator did not have.
Do not buy reviews that are required to be positive, and do not buy followers or views.

What this means for you as the advertiser

As the advertiser, you should require disclosure in writing whenever a creator publishes a paid video on their own account.

The Endorsement Guides expect advertisers to give their endorsers guidance, monitor their posts and fix problems, and an advertiser may be liable even when the endorser is not. When FNLY Social produces UGC for your ads, the videos usually run from your own account. For posts on creator accounts we make the disclosure mandatory in the brief.

How FNLY Social works with these rules

FNLY Social produces UGC as advertising content and never presents it as a customer review.

Our creators actually use the product before they film, and scripts never invent experiences. You approve all product claims before production, and claims must be truthful and substantiated, which remains your responsibility as the advertiser.

Note

This article gives a general overview of FTC rules and is not legal advice. Regulated categories such as health, supplements or financial products have additional rules. Please talk to a US advertising attorney about your case.

Updated: October 2026

Sources

FAQ

Frequently asked questions

What are the FTC rules for UGC testimonials?

The Endorsement Guides require that a paid or gifted relationship be disclosed clearly and conspicuously when the audience would not expect it. The Consumer Review Rule adds that testimonials must not misstate the person's experience with the product. In practice: creators use the product, scripts stay true to that experience, and paid posts on creator accounts carry "#ad" or a similar label.

Does a UGC video need a disclosure?

When it runs as an ad from your brand account, the platform's ad label usually shows that it is advertising. When a creator publishes the paid video on their own account, the creator must disclose the relationship. If your ad could make a paid creator look like an independent customer, ask your attorney whether to add a note.

Is "#ad" enough?

The FTC considers "#ad", "Ad:" and "Sponsored by [brand]" clear, as long as the label is placed where people see it without clicking, ideally at the start. A hashtag at the end of a long caption or among many other hashtags is usually not enough.

Is the platform's "Paid partnership" tool enough?

Not necessarily. The FTC says responsibility stays with the creator and the brand, and it recommends adding your own clear disclosure even when a platform tool is used.

Does a free product count as a material connection?

Yes. The Endorsement Guides list free or discounted products as a material connection, whether or not you require a post in return. The FTC says there is no minimum value.

What are the penalties for fake reviews?

Under the Consumer Review Rule, in force since October 21, 2024, the FTC can seek civil penalties for knowing violations of up to $53,088 per violation. The amount is the maximum the FTC set in January 2025.

Is the brand liable if a creator does not disclose?

It can be. The Endorsement Guides say advertisers may be liable for undisclosed connections and should guide, monitor and correct their endorsers. That is why disclosure belongs in both the contract and the brief.

Do organic posts with UGC on my brand account need a disclosure?

Usually not, because posts on a brand account are recognizable as the company's own communication. Avoid giving the impression that a paid creator is an independent customer.

FTC disclosure rules

UGC with clear rules

We produce UGC with rights in writing, real product use and disclosure built into the brief.

Request a quote Call us