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Source Credibility, Legal Liability, and the Law of Endorsements

This paper reviews the endorsement advertising and source credibility literature to identify factors which make this type of advertising effective. These credibility factors resemble the legal concept of reliance and are used as a framework for developing the bases of legal liability associated with false or misleading endorsement advertising. The legal liability of endorsers, advertising agencies, and the media is discussed through a review of Federal Trade Commission (FTC) regulations, state laws, and court cases. Suggestions for minimizing legal liability are provided and the role of industry self-regulation in the consumer protection matrix is discussed Finally, suggestions for future research areas in endorsement advertising are provided.