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Pay for Praise

New FTC guidelines address paid endorsements.

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This story appears in the June 2010 issue of Entrepreneur. Subscribe »

If blogging is part of your model, if your business sends free samples to bloggers or if you hire endorsers or spokespeople, then you need to know about Federal Trade Commission guidelines surrounding paid endorsements. The guidelines, which went into effect in December, carry fines of as much as $11,000 per infraction.

"[The guidelines] involve disclosing information about relationships with advertisers or endorsers that would have a material impact about how a prospective consumer would view the message," says David M. Adler of Adler & Franczyk, a technology and corporate . "It could be a entry, a post, a video, a TV commercial."

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