5 Legal Mistakes Influencers are Making (and how to fix them)
Like most people today whether in business or for yourself, the goal is to gain followers. I mean, for me, followers equals clients and that’s pretty much why I run my business (shocker! no clients, no business). But with more followers, comes legal responsibilities that you may not be aware of. Make sure that you are not making these legal mistakes as your audience becomes bigger, and more brands start knocking at your door.
1.Failing to notify your audience that your post is #sponsored
The FTC (Federal Trade Commission) is cracking down on influencers who are not letting their followers know that they are getting paid to promote content. The FTC is warning influencers such as Naomi Campbell and Lindsay Lohan for not disclosing sponsorships. So remember, if a company is sponsoring your post (i.e. paying you to post), you must disclose that to your audience. This disclosure must be clear and visible.
So, if you are posting a video on YouTube, and a brand is paying you to review the product, putting the disclosure in the description box is not enough. But just receiving the product for free does not require disclosure. The disclosure needs to be superimposed in the video itself. In addition, if a brand is sponsoring you on IG, #ad is enough, but it should be clear. Do not stuff the disclosure into 30 hashtags, because the consumer will overlook that. Limited space (ahem *Twitter*) does not exempt you from disclosing that a brand is sponsoring the promotion. For more information about following the FTC guidelines, click here.
Here is a recent order from the FTC settling allegations from a PR firm and a publisher who hired athletes to post endorsements on social media for the repellent without disclosing they were paid. Although this article does not discuss if the athletes got in trouble, make sure that you are notifying your audience of sponsorships. You do not want to be on the FTC’s radar.
2. Using photos that you don’t have a release or licensing agreement for
As an influencer or creator yourself, you know how awful it feels to see your work on someone else’s page with no credit, no permission, or no payment. So if you know how terrible it feels, don’t do it to someone else! Using someone’s photos without their permission can land you in hot water. If you have permission through a release or licensing agreement, make sure that you are adhering to the provisions of the agreement. For example, if you are using stock photography, some photographers prohibit commercial use. If you do not follw that stipulation, the photographer can sue you. Even photography that is royalty free may require you to give credit, so pay attention to the terms and conditions. I know people don’t usually read the terms and conditions, but get into the habit. Especially, if you want to stay out of legal trouble.
3. Not reading or understanding the terms of a collaboration/influencer marketing agreement
One of the biggest legal mistakes influencers make are not reading what they sign. And the contracts you have read… you didn’t really understand or read them. Even people who have been in the game for a while may not understand what they’re signing. After today, that needs to stop. You need to make sure that you understand what you are signing, because terms of a contract are binding. Not understanding what you are signing, and unknowingly breaching the contract, allows the other party to sue you. If you want some more information on what’s important when it comes to contracts, check out this post where I explain what you need in a contract, and what the clause actually means. If you need an influencer agreement, make sure you visit the WM Law Shop, which has influencer agreements whether you are a small business hiring influencers or are an influencer.
Honestly, I barely understand taxes. Hence, why I became an attorney and not a CPA :D. But I do know that you need to pay your taxes. Being an independent contractor and getting money here and there doesn’t mean you don’t have to report that income to the IRS. Best advice I can give on taxes, go speak to a CPA, and they will give you information on how to best leverage your extra income.
5. Not leveraging your influencer status to form a business entity
This kind of goes hand in hand with your taxes. If you are making some pretty good moolah as an influencer, think about forming your brand into a business entity. Certain business entities save you money when filing your taxes. In addition, if a company or person sues you and you have a business entity, they may not be able to touch your personal assets. Make sure you are not commingling (mixing) the funds. The funds that a company pays you for endorsing and promoting needs to be in a separate account from your personal account.
If you need help with your legal needs, or understanding how to leverage your influencer status, schedule a Clarity Call or Strategy Session below!