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Running Facebook ads? Posting before-and-after photos? Sharing customer reviews on your website? There are rules—and breaking them can mean fines, lawsuits, or worse.

Here’s what the Federal Trade Commission says you need to know.

The Big Rule: Truth in Advertising

Every claim you make in advertising must be:

1. Truthful - No false statements, period
2. Not misleading - Even technically true statements can be deceptive if they create a false impression
3. Backed by evidence - If you claim results, you need proof

This applies everywhere: your website, social media, Google ads, flyers, vehicle wraps, radio spots—all of it.

Claims That Require Proof

If you say it, you need to back it up:

• “Save up to 50% on your energy bills”
• “#1 rated plumber in [city]”
• “Guaranteed to last 10 years”
• “Fastest response time in the area”

What counts as proof? The standard is “competent and reliable evidence.” For most service businesses, this means:

• Documented customer results
• Third-party testing or certification
• Industry data or surveys
• Your own records and data

If you can’t prove a claim, don’t make it.

Testimonials and Reviews: The Rules

You can share customer reviews and testimonials, but there are boundaries:

Reviews Must Be Real

• No fake reviews—ever
• No paying for reviews without disclosure
• No writing reviews for customers to post

Results Must Be Typical

If you feature a customer who had exceptional results, but most customers don’t get those results, you need to disclose that.

Wrong: Showing a testimonial about a 3-day kitchen remodel when most take 2 weeks.

Right: “Results may vary” or “This project timeline was shorter than average due to [specific reason].”

Paid Endorsements Must Be Disclosed

If you gave someone anything of value for a review or testimonial—discount, free service, gift card, anything—it must be disclosed clearly.

• “I received a discount in exchange for this review”
• “#ad” or “#sponsored” on social posts
• Clear disclosure near the testimonial on your website

This includes reviews from friends, family, and employees.

Before-and-After Photos

These are testimonials. The same rules apply:

• Must be real results from actual customers
• Must be typical of what customers can expect
• Can’t be digitally enhanced to exaggerate results
• Need proper disclosure if results aren’t typical

Price Claims

If you advertise prices, be careful:

“Up to X% off”

The savings you advertise must be available on a meaningful portion of your inventory or services. You can’t advertise “up to 50% off” if only one obscure item is half-price.

”Compare at” Prices

If you show a comparison price, it must be a real price that customers actually paid—not an inflated number you made up.

Free Offers

If you offer something “free,” you can’t:

• Raise the price of the required purchase to cover the “free” item
• Reduce the quality of the required purchase
• Add hidden fees

Environmental Claims

“Green,” “eco-friendly,” “sustainable”—these claims require substantiation too.

• Don’t claim a product is recyclable if it isn’t in most communities
• Be specific: “Made with 50% recycled materials” is better than “eco-friendly”
• Certifications should be from legitimate third parties

What Happens If You Violate These Rules?

The FTC can:

• Issue warnings and demand you stop
• Require corrective advertising
• Fine you (penalties can be substantial)
• Pursue legal action

Beyond the FTC, competitors can sue you for false advertising, and customers can sue for deceptive practices.

A Simple Test

Before running any ad or making any claim, ask yourself:

1. Is this literally true?
2. Would a reasonable customer be misled?
3. Can I prove this claim if challenged?
4. Have I disclosed everything that should be disclosed?

If you can answer yes, yes, yes, and yes—you’re probably fine.

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The Bottom Line

The rules aren’t complicated: tell the truth, don’t mislead, prove your claims, and disclose relationships.

Most service businesses get in trouble not because they’re intentionally deceptive, but because they didn’t realize a claim needed proof or a relationship needed disclosure.

When in doubt, be more transparent, not less. Your reputation—and your business—depends on it.