FTC Rules for UGC: When Creators and Brands Need to Disclose
When a UGC video needs an ad disclosure, who is responsible, how the FTC’s Endorsement Guides and fake-review rule apply, and practical disclosure examples.
Under the FTC's Endorsement Guides, a UGC video needs a clear disclosure whenever the audience wouldn't expect a connection between the creator and the brand, such as payment or free product, and that connection could affect how much they trust what's said. A creator posting a paid video on their own account must disclose it. A brand that runs creator content as an ad is responsible for the ad being honest, including not presenting a paid creator as an ordinary customer without disclosure. No disclosure can fix a testimonial from someone who never used the product: the FTC's 2024 rule on reviews and testimonials prohibits that outright.
This page summarizes FTC guidance for general information, using FTC sources and the text of the FTC's rules, checked in October 2026. It isn't legal advice. Other laws (state laws, platform policies, and product-specific rules for health claims, for example) may also apply. Talk to a lawyer about specific campaigns.
The three FTC documents that apply to UGC
| Document | What it is | Why it matters for UGC |
|---|---|---|
| Guides Concerning the Use of Endorsements and Testimonials in Advertising (16 CFR Part 255), revised 2023 | The FTC's interpretation of how the FTC Act applies to endorsements | Defines endorsements, material connections, "clearly and conspicuously," and who is liable |
| Disclosures 101 for Social Media Influencers | Plain-language FTC guidance for people who post | Practical how-to for creators: when and how to disclose on social media |
| Trade Regulation Rule on the Use of Consumer Reviews and Testimonials (16 CFR Part 465) | A rule announced in August 2024 and effective October 21, 2024 | Bans fake testimonials and certain review practices; courts can impose civil penalties for knowing violations, up to $53,088 per violation at the FTC's current inflation-adjusted level |
The difference matters. The Guides explain how the FTC applies the law, while Part 465 is a rule whose knowing violations can lead directly to civil penalties. The FTC set the maximum at $53,088 per violation in January 2025, and in a September 2026 Federal Register notice said the 2025 penalty levels stay unchanged for 2026. In December 2025, FTC staff sent warning letters to 10 companies about possible violations of the rule, which shows it is being enforced, not just published.
The core ideas in plain English
Material connection
Section 255.5 of the Guides says that when there's a connection between the endorser and the seller that might materially affect the weight or credibility of the endorsement, and the audience wouldn't reasonably expect it, the connection must be disclosed clearly and conspicuously. Examples include payment, free or discounted products, a business or family relationship, and employment.
For UGC, the most common material connections are a fee, a free product, or both.
Clearly and conspicuously
The 2023 revision added a definition of "clearly and conspicuously." For creators, Disclosures 101 sums it up: put the disclosure where it's hard to miss. In a video, the disclosure should be in the video itself, not only in the description, and you can both say it and show it on screen, because some viewers watch without sound.
Honest, real experience
Section 255.1 says endorsements must reflect the endorser's honest opinions, findings, beliefs, or experience. When an ad represents that the endorser uses the product, the endorser must have been a bona fide user at the time. Section 255.2(a) also requires the advertiser to have adequate substantiation for claims made through endorsements.
Who's responsible
According to Section 255.1, advertisers are subject to liability for misleading or unsubstantiated statements made through endorsements, and for failing to disclose unexpected material connections. Endorsers may be liable for statements they make, such as a representation they know or should know is deceptive. Disclosures 101 tells creators directly that disclosure is their responsibility. The FTC's FAQ adds that enforcement usually focuses on advertisers and their agencies, but action against an individual endorser "might be appropriate in certain circumstances," for example when someone keeps skipping required disclosures after warnings. In practice, both the creator and the brand have something to get right.
Scenario table: who discloses what
| Scenario | Disclosure needed? | Who's responsible | What to do |
|---|---|---|---|
| A creator posts a paid or gifted UGC video on their own account | Yes. Followers won't assume the post was paid for or the product was free. | Creator, with the brand monitoring | Say and show "ad" or "sponsored" near the start of the video, and add it to the caption. Use the platform's paid-partnership label too, but don't rely on it alone. |
| A brand runs a creator's video as an ad from the brand's account, and the creator is clearly presented as a paid spokesperson | Usually no extra disclosure about payment, because viewers can see it's an ad and the creator is a presenter. | Brand | Make sure every claim is true and substantiated, and that the creator actually used the product if the video says or implies they did. |
| A brand runs a creator's video as an ad, and the creator is presented as an ordinary customer sharing an unprompted experience | Generally yes. In the FTC's Section 255.5 examples, recruiting people and paying them for consumer endorsements without telling viewers is deceptive. | Brand | Add an on-screen disclosure such as "Paid partner" or "Sponsored by [BRAND]," or rewrite the ad so it doesn't imply an unpaid customer. If the person isn't an actual user, 255.2(c) requires using real consumers or clearly disclosing they aren't. |
| A brand runs ads from the creator's handle (Spark Ads, partnership ads, whitelisting) | Yes. The ad looks like a post from the creator. | Brand and creator | Use the platform's branded-content or partnership label, and keep the disclosure in the video and copy. Agree in writing who writes the copy. |
| A brand reposts a creator's organic post on its own channels | Yes, if the creator had a material connection and the original post's disclosure isn't clear. | Brand | Add a clear disclosure when reposting. In a 255.5 example, the FTC says a company reposting an endorsement without a clear disclosure needs to disclose the relationship itself. |
| Paid creator videos used as testimonials on product pages | Yes, if the page presents them as customer reviews or testimonials. | Brand | Label them as sponsored or creator content, keep them separate from organic customer reviews, and don't mix them into review ratings. |
| A creator plays a "customer" who never used the product | A disclosure doesn't fix it. | Brand (and the creator who knowingly makes false claims) | Don't do it. Part 465 prohibits testimonials that misrepresent the person had actual experience with the product. Send product and let the creator use it, or make the video an obvious dramatization. |
The line is how the content is presented. A paid creator who's obviously presenting a brand's ad is different from a paid creator presented as a spontaneous customer. When it's unclear, disclose.
How to disclose in a UGC video
Disclosures 101 gives specific guidance for social media posts. Applied to short-form UGC:
- Put it in the video, not only in the caption or description.
- Say it and show it. A spoken line plus on-screen text covers viewers with and without sound.
- Put it early. Viewers may not watch to the end.
- Use simple words: "Ad," "Advertisement," "Sponsored," or "Thanks to [BRAND] for the free product." Disclosures 101 warns against vague terms like "sp," "spon," or "collab" on their own.
- Don't bury it in a pile of hashtags, a profile bio, or behind a "more" link.
- Use platform tools, but not only those. Disclosures 101 says not to assume a platform's disclosure tool is enough by itself.
- Match the language of the video. A Spanish-language video gets a Spanish disclosure.
Spoken, at the start: "This is an ad for [BRAND]." "[BRAND] sent me this to try and paid me to share it." "I'm partnering with [BRAND] on this one." On-screen text (first seconds): AD | Paid partnership with [BRAND] Sponsored by [BRAND] [BRAND] sent me this for free Caption (first line, before the cutoff): #ad Paid partnership with [BRAND]. [REST OF CAPTION]
Claims: what creators can and can't say
Disclosure is only half of compliance. The FTC also expects what you say to be true. From Disclosures 101 and the Guides:
- Don't talk about experience you haven't had. If you say you use a product, you need to have used it.
- Don't say a product works if you think it doesn't, even if the brand's script says so.
- Don't make claims that need proof the brand doesn't have, such as health or scientific claims. Ask the brand which claims are approved and substantiated.
- Typical results. Under Section 255.2(b), an ad featuring one consumer's experience on a key attribute will likely be read as representing typical results. If the brand can't back that up, the ad must make clear what people can generally expect. Vague phrases like "results not typical" aren't enough.
If a brief asks you to say something you can't honestly say, ask for an alternative line. That's a normal, professional request; see how to read a UGC brief. Category-specific claim rules are covered in the guides for beauty and skincare and supplement and fitness brands.
What the 2024 reviews and testimonials rule adds for brands
Part 465 took effect on October 21, 2024. Its main prohibitions, as summarized by the FTC, include:
- Fake reviews and testimonials. Creating, selling, or buying reviews or testimonials that misrepresent that they're by someone who doesn't exist (including AI-generated fake reviews) or who didn't have actual experience with the product, or that misrepresent the experience.
- Buying reviews conditioned on sentiment. Offering compensation or incentives in exchange for reviews that express a particular positive or negative sentiment.
- Undisclosed insider reviews and testimonials by a company's officers, managers, employees, or agents, or their immediate relatives, without clear disclosure of the relationship.
- Company-controlled review sites presented as independent.
- Review suppression through unfounded legal threats, intimidation, or false accusations.
- Fake social media indicators, such as buying or selling fake followers or views.
The FTC's Q&A on the rule says a hired influencer's social post touting a product is treated as a testimonial, not a consumer review, and that a business could be liable if it knew or should have known that hired influencers misrepresented using the product. It also says the rule doesn't make ordinary consumers liable for what they say in their reviews.
For brands buying UGC, the practical rules are: ship the product and give creators time to use it, never script experiences the creator didn't have, keep paid creator content out of your customer-review section, and never tie payment to a positive opinion. For product page placement, see using UGC on ecommerce product pages.
Compliance checklists
For creators
- I've actually used the product before filming any claim about using it.
- Every claim in the script is something I believe and the brand says it can support.
- If I post the video on my own account, the disclosure is spoken and on screen near the start, and in the first line of the caption.
- I've turned on the platform's paid-partnership or branded-content setting where it applies.
- I know whether the brand will run ads from my handle, and the copy has been shared with me.
- I've kept the brief and messages that show what was requested.
For brands
- Creators receive the product and have time to use it before filming.
- Scripts only contain claims you can substantiate, with approved wording for health, results, and comparison claims.
- Ads that present creators as ordinary customers include a clear disclosure, or are rewritten.
- Ads from creators' handles carry the platform's branded-content label and an in-video disclosure.
- Creator content on product pages is labeled and kept separate from customer reviews and ratings.
- Payment never depends on the creator's opinion being positive.
- Your contract requires disclosure on creator-posted content, and you check posts (the FTC's Q&A says that if regular monitoring is too much, you should probably pre-approve posts).
Disclosure and licensing often get negotiated in the same contract. For the rights side, see usage rights for creators or usage rights for brands.
FAQ
Do UGC creators need to disclose if the brand posts the video, not them?
If the video never appears on your account, the posting brand controls how it's presented and carries most of the responsibility. You're still responsible for not making statements you know or should know are false. If the ad runs from your handle, treat it as your post and make sure it's disclosed.
Is "#ad" in the caption enough?
For a video, the FTC's guidance is that the disclosure should be in the video itself, not only in the description. Use the caption as well, at the start, but don't rely on it alone.
Do I need to disclose a gifted product even if I wasn't paid?
Yes. Disclosures 101 says that if a brand gives you free or discounted products and you mention one of its products, you should disclose it.
Can a UGC creator get in trouble with the FTC personally?
It's possible but not the usual target. The FTC's Endorsement Guides FAQ says its enforcement focus is usually on advertisers, ad agencies, and PR firms, while action against an individual endorser might be appropriate in some cases, such as ignoring warnings about disclosure. The safer habit is simple: disclose on anything you post, and don't say things you know aren't true.
Does a brand's own ad need "#ad" if a creator is in it?
Not always. The FTC's FAQ says that if it's clear the content is a paid advertisement, additional disclosure isn't required, which covers a creator plainly acting as a presenter in a brand ad. The problem cases are ads that present a paid creator as an ordinary customer, or that run from the creator's handle so they look like an organic post.
Can a brand use AI avatars instead of real creators?
The FTC's Q&A on the reviews rule says it doesn't ban AI-generated avatars outright, but they can still be deceptive under other FTC standards, for example when presented as a real customer with real experience.
Sources
- 16 CFR Part 255: Guides Concerning the Use of Endorsements and Testimonials in Advertising — Federal Trade Commission
- FTC's Endorsement Guides: What People Are Asking — Federal Trade Commission
- Disclosures 101 for Social Media Influencers — Federal Trade Commission
- Rulemaking: Use of Consumer Reviews and Testimonials (16 CFR Part 465) — Federal Trade Commission
- The Consumer Reviews and Testimonials Rule: Questions and Answers — Federal Trade Commission
- Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials (August 14, 2024) — Federal Trade Commission
- FTC Warns 10 Companies About Possible Violations of the Agency's New Consumer Review Rule (December 2025) — Federal Trade Commission
- FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 2025 — Federal Trade Commission
- Civil Penalty Inflation Adjustments (2026 levels unchanged), FR Doc. 2026-18853 — Federal Trade Commission, Federal Register
CreatorsUGC publishes this guide. We run a UGC marketplace, so we have an interest in the topic — we link to independent sources for facts and label illustrative examples.