FTC Sues Wellness Company for Undisclosed Influencer Posts

The Federal Trade Commission filed a complaint against Teami, LLC on March 5, alleging that co-founders Adi Arezzini and Yogev Malul failed to adhere to the FTC’s advertising policies for using social media influencers to advertise their products. The FTC filed the complaint in the Middle District of Florida before Judge Virginia M. Hernandez Covington.

Teami is a wellness company that sells teas and health products. According to the complaint, collective sales of Teami teas exceeded $15.2 million between 2014 and 2019. This number, according to the FTC, was elevated by social media influencers who advertised Teami products on Instagram. “In numerous instances after May 2018,” wrote the FTC, “well-known influencers paid by Defendants to promote Teami teas and skincare products posted video endorsements on Instagram that did not disclose any connections between the endorsers and Defendants within the video itself.” Under FTC regulations, financial relationships between influencers and brands must be disclosed.

In April 2018 the FTC officially warned Teami’s affiliated influencers that they must properly disclose their business relationships. Violations continued to occur despite the warning. “FTC staff informed Defendants that any material connections to any endorsers, such as monetary payments, should be clearly and conspicuously disclosed in their endorsements,” writes the complaint. “To make disclosure both ‘clear’ and ‘conspicuous,’ endorsers should use unambiguous language and consumers should be able to notice the disclosure easily without having to look for it.” The FTC explained that these disclosures must appear near the top of an Instagram post, so consumers would not have to click “more” to uncover the information.

A press release published by the FTC on March 6 explains that in addition to the improper business disclosure, Teami made “allegedly misleading weight-loss claims for [a detox product] through its paid influencers’ Instagram posts.” The FTC advises companies, “If you say (or imply) your product will prevent or treat a serious medical condition, you need sound evidence.”

The FTC requested a permanent injunction to prevent Teami from committing future violations.