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  • 1. BOLO 2010Social Media: Compliance Considerations
  • 2. Amanda Vega
    20 years online experience
    Service agencies and clients alike
    MBA, Columbia
    NY, Phoenix, Dallas, Shanghai
    PR, social media, compliance, web
    Pink Porsche owner, pug lover, red bottom shoe zealot
  • 3. Amanda Vega Cont…
  • 4. The Social Media Bible - contributor
  • 5. Some of Our Clients
  • 6. Some Key Points
    No other agencies have internal compliance department
    Licensing requires sponsorship (Series 7, 63 needs a broker dealer)
    Very expensive to maintain internally
    Compliance spans social as well as print, etc.
    Everyone has some regulation – FTC at the least
    Crackdowns happening NOW
  • 7. Regulatory Bodies
    FTC: all communication, advertising, marketing
    FDA: pharmaceuticals, nutraceuticals, some supplements, cosmetics, etc.
    FINRA: publicly traded companies, broker dealers, financial services companies AND individuals
    HIPAA: hospitals, physicians (and groups)
    UK Laws
    Internal risk controls (internal auditing, risk to data)
  • 8. FTC
    October 2009 Changes
    Celebrity endorsements, testimonials, social media endorsements
    Must disclose relationship to product/client
    Must disclose if product was free
    Doesn’t have to be in each post
    Put in profile
    Celebs have to disclose they are paid
    Twitter wasn’t covered so no case on this YET
    Some employment considerations
  • 9. FTC Continued
    No more safe harbor with “results not typical”
    Actual results have to be accessible
    Disclosing of material connections
    If blogger gets paid you have to disclose
    No false and misleading claims
    Disclosure of use of company sponsored research
    Liability for affiliates and other resellers is now on company
  • 10. FTC Violations
    Banana Republic
    Internal “intern” was posting “ad heavy commentary” on fashion blogs
    Did not disclose she worked for BR
    Fine: $5,000 (pending)
  • 11. FDA
    Disease claims
    Cannot say cure, treat, mitigate, or prevent
    Say “alleviate the symptoms of…”
    Adequate substantiation of structure/function claims
    If you say an ingredient does X, you have to have studies proving that
    Adequate substantiation of other statements
    If you say “few or no side effects” have proof
    If you say this online, you are open for product liability and personal injury claims
  • 12. FDA Continued
    Use of Testimonials
    When you allow testimonials you accept liability of that person’s claims, period
    Link to third-party literature
    For anything you link to, you adopt all of the claims
  • 13. FDA Violations
    First Juice and 3 other small juice companies asked to change all labels saying “half sugar”
    Big brands were not attacked – more lobbyists
    All brands had links to research/tests proving claims
    FJ fought back and won the claim
    Pharmaceutical company fined for fake testimonials posted in social media by their PR firm
    Use REAL people with disclosure instead
  • 14. FINRA
    October 2010 changes – VERY SEVERE
    Record keeping and reporting
    You must archive/save all social/email for 3 years
    Communication online is considered same as in person
    Advertisement versus correspondence
    Tweets and blogposts on your blog are considered advertisements
    DM’s/email considered correspondence
    Ads need pre-approval, correspondence needs review
  • 15. FINRA Continued
    Oversight into activities
    Compliance can regulate any offerings as part of oversight
    They cannot regulate your personal hobbies unles industry related
    Customer service
    Try not to handle full issues back and forth on Twitter – chain leads to harder protection
    Cannot help with account specifics online
  • 16. FINRA Violations
    Assistant posted to Twitter “it’s a great day. Boss in meeting with XYZ all day. Quiet.”
    XYZ = competitor COO
    Day traders went crazy thinking there was going to be a merger
    SEC came in and filed compliance violation
    Keep in mind – her actions were NOT in violation of their internal policy OR any regulation
  • 17. HIPAA
    About 500 of 6,000 hospitals are using social
    Do not ever list a patients name or picture anywhere
    Friending patients on Facebook puts you into grey area – interaction can be confirmation of relationship which is violation
    You can help people, but make disclosure in profile and posts
  • 18. HIPAA Violations
    Medical resident twitpic’d photo of his first set of stitches
    A part of a tattoo was showing – therefore showing identity which is a violation
    $10K fine to hospital
    Social media wasn’t included in their training
  • 19. Internal Risks
    • Social networking sites are the most vulnerable category of Web sites
    • 20. 82% of social networking sites have an urgent, critical or high severity vulnerability - May 2009 WhiteHat Security
    “ It is not a risk that someone will do something dumb someday. Actually, it’s a certainty.”
  • 21. Long Tail is Forgotten
  • 22. It’s NOT Locked Down!
    95% of companies have Anti-virus and 85% of companies have URL filters in place, but 30% of companies have bots on their networks and 40% still have viral infections Most financial institutions consider access “locked down” when it isn’t
    PCI data and monitoring is NOT enough
    There are too many sites created daily for the crawlers and enforcers to keep with
  • 23. Reputation Risk
    • Reputation Risk
    • 24. 74% of employed Americans believe it is easy to damage a brand’s reputation via sites such as Facebook,Twitter, and YouTube.
    • 25. Fifty-eight percent of executives agree that reputational risk and social networking should be a board room issue, but only 15% say it actually is.
    • 26. Only 22% of companies have policies on how employees can use social networking tools
    • 27. 53% of employees think their social networking pages are none of their employers business
    (Deloitte LLP 2009 Ethics & Workplace Survey results)
  • 28. Bottom Line…
    • Risk vs. Reward – you have to evaluate
    • 29. A good policy is your strongest asset
    • 30. You MUST have a social media expert AND a compliance, IT, HR, and marketing person involved – the knowledge of each is imperative to be collectively used