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  • Paul I. Menes

Fyre Fest Scandal Reignites, and Influencer Agencies, Management and PR Firms Are Getting Burned

Earlier this year, I wrote an article for Entrepreneur magazine about the now-infamous Fyre Festival. Among other topics, the article dealt with how not only influencers, but recently brands, agencies, and others involved with influencers, were being scrutinized by the Federal Trade Commission (“FTC”) for failures to properly disclose endorsements.

It also posited that as a result of the fraud committed by festival promoter Billy McFarland through his Fyre Media company (not to mention his having made vanish over $26 million paid Fyre Media by investors, Festival-goers, and others), the FTC and the Frye Media bankruptcy trustee might go after the involved influencers, brands, and agencies for return of as much of this money as possible to investors.

Turns out that’s exactly what’s happening.

Gregory Messer, the Fyre Festival bankruptcy trustee, along with attorney Fred Stevens, have recently filed 14 lawsuits against the influencers and celebrities, like Kendall Jenner, who endorsed the Festival, the talent agencies and personal management companies who represented them and some of the announced performers, and others, as they attempt to claw back $14.4 million in investors’ money paid out by Fyre Media and McFarland to stage the disastrous Festival.

The lawsuits not only accuse the celebrities, influencers, and some other defendants of failing to disclose that celebrities and influencers were paid to endorse the Festival, but also several defendants for misleading the public about it, including knowing there were serious problems with the Festival’s claims and viability, and not disclosing them in real-time.

I also mentioned in my Entrepreneur article that any company involved in providing and using influencers, as well as the influencers themselves, should make sure the FTC Endorsement Guides and FAQs are being followed.

This just became easier. In November, the FTC released a new guide and related video entitled “Disclosures 101 for Social Media Influencers.” The Disclosures 101 Guide (the “Guide”) describes in plain English the disclosure requirements applicable to endorsements on social media. (My next blog will go into more detail about the Guide’s contents and requirements).

Although the Guide targets influencers, it’s a useful tool for agencies, management, PR firms, and brands, considering the extension of liability to them for failures to properly disclose influencer endorsements.

So, if those working with influencers in any capacity want to avoid a conflagration of lawsuits and FTC liability, they need to make sure that influencer endorsements are clear and correct. Just Sayin’ . . . ™ #nfluencerlawyer, #influencerlaw, #disclosurelaw, #influenceragencies, #influencers, #influencermanagers, #influencerdisclosures, #justsayin

Paul I. Menes

The Influencer Lawyer ®

(310) 286-1313

© 2019 Paul I. Menes

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