Want to increase your brand’s reach without spending a fortune? Or do you wish to build brand awareness? No matter your goal, digital marketing lets you connect with your audience and grow much faster than old-school advertising ever could.
While powerful, marketing is under a microscope. Federal authorities are aggressively policing everything from advertising practices to consumer protections. One mistake can cost up to $50,000 per violation. If you want to protect your brand from penalties, you have to understand the legal risks.
Here are some marketing tactics you must steer clear of to avoid legal trouble:
#1 Email Marketing Without Proper Consent
Email marketing is one of those few marketing channels that generates the highest returns on investment, yet is cost-effective. Personalized emails, in particular, can boost transaction rates by as much as six times more than generic ones.
But blasting emails to just about anyone can be troublesome for you. Verkada is a case in point. It got hit with a $2.95 million fine in late 2024 for sending millions of emails without including unsubscribe links or addresses.
Email regulations are strict worldwide. The U.S. enforces the CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act). Meanwhile, Europe operates under the General Data Protection Regulation (GDPR). These laws exist to protect consumers from spam and misuse of personal data.
The best way to stay safe is to get permission first. This is called “explicit consent”. It usually happens when someone checks a box on your website saying they want your updates.
Don’t rely on ‘implied consent’ by assuming every customer is a subscriber. Use a ‘double opt-in’ to guarantee a high-quality list instead.
#2 Misleading or False Advertising
Marketing is all about showcasing your product or service in the best possible light. But there is a fine line between persuasive messaging and misleading advertising, and crossing it can be costly.
If you say your product works a certain way, you must have proof to validate the claim. This is called substantiation. If it’s a health claim, you usually need real scientific studies. More than a decade ago, Reebok had to pay $25 million because it couldn’t prove its toning shoes actually worked.
Things are the same today, and the stakes are bigger because consumers are far more aware. A similar issue has surfaced with major sports betting platforms like FanDuel and DraftKings.
TruLaw explains that these companies advertised “risk-free” betting, but buried important conditions in the fine print. Users often had to wager far more money before being allowed to withdraw any bonuses.
Plaintiffs allege that these ads minimize financial risks and promote dangerous betting behavior. Consequently, this type of deceptive messaging has fueled more than one sports betting lawsuit for gambling addiction.
The lesson is clear: be truthful. Back up your claims with data or customer testimonials. Always disclose limitations or conditions clearly. And never make too-good-to-be-true promises.
#3 Influencer Marketing Without Disclosure
Influencers are a great way to spread the word about your offerings. But you can’t just pay someone to talk about your product and stay silent about it.
Transparency is mandatory in influencer marketing. What this means is, when you send a product to influencers for payment, free products, or any form of compensation, they must disclose that. Otherwise, both could land in trouble.
To protect your business, make sure the influencers use words like “Ad,” “Sponsored,” or “Paid Partnership” when promoting your products.
Note that platform-specific quirks don’t excuse you from disclosure rules. On Instagram, disclosures need to appear before the “more” button. On YouTube, mentions in the description aren’t enough; the influencer must verbally disclose the partnership in the video itself.
The brand is just as responsible as the creator. In 2020, Teami, LLC sent its teas and skincare products to influencers for endorsement. But the influencers didn’t disclose that on social media. The result? The Federal Trade Commission fined the company $15.2 million.
Anytime you partner with an influencer, monitor their posts and make sure they are following the rules. Keep a record of your contracts and their posts. This helps protect you if an auditor ever comes knocking.
Protecting Your Brand from Costly Regulatory Pitfalls
Marketing should help your business grow, not create stress or legal headaches. You can protect your brand if you steer clear of these risky tactics.
When you market with integrity, you don’t just avoid legal trouble, but also build stronger customer trust. Transparent, honest, and ethical marketing shows customers that you respect them. That leads to long-term loyalty, positive word-of-mouth, and sustainable growth for your business.