This page follows the overview with the FTC Act rules, 2026 penalty amounts and a checklist. Email marketing falls under CAN-SPAM, customer data under GLBA and HIPAA.
What are the main FTC Act rules?
| Requirement | In plain words | Source |
|---|---|---|
| No deception | Likely to mislead a reasonable consumer on a material point | 15 U.S.C. 45 |
| No unfairness | Substantial injury buyers cannot reasonably avoid, not outweighed by benefits | 15 U.S.C. 45(n) |
| Honest endorsements | FTC guidance, not a rule: genuine opinions; disclose payment, free products or ties the audience would not expect | 16 CFR 255.0, 255.1, 255.5 |
| Reviews Rule | No fake reviews or buying misleading ones, no incentives tied to a sentiment, insider reviews disclosed, no groundless threats to remove reviews | 16 CFR Part 465 |
| Online subscriptions | Disclose terms before billing details, get express consent, offer a simple way to stop | 15 U.S.C. 8403 |
Key numbers and dates
| Item | Amount or date | Year in force |
|---|---|---|
| Civil penalty per violation: FTC rule broken with knowledge, or final FTC order broken | $53,088 (statute base $10,000) | Assessed after January 17, 2025, unchanged for 2026 |
- Reviews Rule takes effect
- Eighth Circuit vacates click-to-cancel amendments
- Older Negative Option Rule restored; noncompete rule removed
- No 2026 penalty adjustment
Source: Federal Register, eCFR
What has changed, and what is pending?
- Click-to-cancel: vacated because the FTC skipped a required analysis. The online subscription statute still applies.
- Noncompetes: a court set the 2024 rule aside, and the FTC dropped its appeals on September 5, 2025.
The Three-Flag Claims Pass: a named checklist
Named for the India, Canada and U.S. corridor, the Three-Flag Claims Pass reviews marketing from the U.S. buyer's side.
- List every express and implied claim in ads, pages and posts.
- Keep the evidence for each claim in one file before it runs.
- List everyone paid, gifted or related, in any country; require clear disclosure of unexpected ties.
- Check reviews: nothing fake, bought for sentiment or hidden.
- Walk the free-trial and cancel path as a U.S. buyer.
- Name who monitors agencies and influencers; an advertiser can be liable even when the endorser is not.
What mistakes recur?
- Hiding a disclosure behind a click or hover.
- Free products for reviews without disclosure, or only for positive ones.
- Staff or relatives posting reviews without saying who they are.
- Free trials that bill later with no clear consent or no simple cancel.
When should you bring in an attorney?
- The FTC or a state attorney general sends a demand or subpoena.
- Designing a subscription or review program that must satisfy federal online-subscription law, the Illinois Automatic Contract Renewal Act and the Reviews Rule.
- A business abroad receives a U.S. agency letter; cross-border enforcement is for counsel.
How can we help?
We handle the U.S. tax, payroll and accounting side of foreign-owned businesses and work with your attorney, Canadian CPA or Indian CA. See bookkeeping and accounting and cross-border tax services.
Frequently asked questions
Does the FTC Act apply to a business in India or Canada?
It can, when a practice causes reasonably foreseeable U.S. injury or involves material conduct here. Ask an attorney about your facts.
Is the click-to-cancel rule in force?
No. It was vacated on July 8, 2025, and the older rule returned on February 12, 2026.
Can I offer a discount for a review?
Not if it is tied, expressly or by implication, to a particular sentiment. Other ties still call for disclosure under the FTC's guides.
Are FTC penalties higher in 2026?
No. The $53,088 amount continues.
Official sources
- eCFR: 16 CFR Part 465, Consumer Reviews and Testimonials
- eCFR: 16 CFR 1.98, civil penalty adjustments
- Federal Register: Civil Penalty Inflation Adjustments, 91 FR 58446
- Federal Register: Revision of the Negative Option Rule, 91 FR 6507
- Cornell Legal Information Institute: 15 U.S.C. 45, with the SAFE WEB repeal note
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.