Lord & Taylor reviews use of social influencers following FTC Instagram settlement

Luxury US retailer Lord & Taylor has said that it will review future endorsement campaigns following a settlement with the Federal Trade Commission (FTC) over an Instagram promotion which the watchdog said "deceived consumers".

Last year, the retailer paid 50 'influencers' between $1000 to $4000 to post photos of themselves over the weekend beginning 15 March wearing a paisley print dress from one of its collections.

The FTC's complaint, announced on 15 March alongside the settlement, said the brand went against it's newly-published native advertising guidelines, and "failed to disclose they had given each influencer the dress, as well as thousands of dollars, in exchange for their endorsement."

As well as taking issue with the brand's partnership with fashion bloggers, the FTC said that the marketer had also enlisted the online edition of Nylon magazine to promote the same clothing line on Instagram without making it clear that the posts were paid for ads.

“Lord & Taylor needs to be straight with consumers in its online marketing campaigns,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Consumers have the right to know when they’re looking at paid advertising.”

Even though the regulator has the power to impose a hefty penalty of up to $16,000 (£11,140) for any such violation, Lord & Taylor has not been fined in this instance. The store did, however, agree to put in place a monitoring and review programme for future campaigns and must provide the FTC feedback on how this is working.

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Rebecca Stewart

Rebecca Stewart is a reporter at The Drum. Based in London, she writes news, analysis and features around brand marketing and digital innovation. She has interviewed key figures from the likes of Airbnb, Amnesty International, Unilever, Facebook and Spotify, as well as covering international events like Ad Week Europe, Dmexco and Ciclope.

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