The Hazards of HYPE: Legal Risks of Influencer Marketing and How Vegas Can Do Better

Britt Whalen
Jul 25, 2025
8 min read

Influencer marketing and legal compliance risks affecting Las Vegas businesses and customer trust

Article written by Britt Whalen, July 2025. Image crafted by ChatGPT.

Influencer marketing is seductive and complex AF. It promises reach, relevance, and rapid/immediate ROI. However, beneath that hype lies a growing legal storm and far too many businesses, influencers, and consumers are sleepwalking into risk they don’t fully understand. As someone who has built a career on evaluating & elevating customer trust, I’m throwing the red flag and voicing need for change because the influencer economy, especially here in Las Vegas, is one lawsuit away from collapse.

Sidenote: If you know me, I don’t do “fear-mongering”. I do wake up calls and recommendations on how to DO BETTER and raise the f-in bar! I ask you, reader, not to misinterpret my words or intent. Please also note (for transparency purposes), I use Ai to help structure article outlines and locate supporting references, but the ideas and opinions are authentically mine.

The Law Is Not a Suggestion: What Influencer Rules Actually Say

Let’s begin with facts, not opinions. The Federal Trade Commission (FTC) has made its expectations explicitly clear in its 2023 updated “Endorsement Guides.” These rules apply to all social media platforms and all forms of paid promotion, including free products and perks.

Here are the non-negotiables:

Note: The definition of "influencer" the FTC uses is: “An influencer is anyone who has a relationship with a brand and whose opinions, beliefs, or experiences are conveyed to their audience and that audience may be affected by what they say.”

Therefore, the moment you post content that could persuade a purchase, you are bound by federal advertising law.

What Influencers MUST Do:

Disclose all “material connections” to a brand. This includes payment, gifts, discounts, affiliate links, and free services.
Use clear and simple language like “#ad” or “Paid Partnership” at the beginning of a post or video; NOT buried in a long caption.
Ensure disclosures are unavoidable. For video content, disclosures must be both visual and audible if possible.
Use platform tools (e.g., Instagram’s “Paid Partnership” tag) and do not rely solely on hashtags.

What Influencers ABSOLUTELY CANNOT Do:

Fail to disclose. Whether intentional or out of ignorance, this is a violation of federal law!
Use ambiguous hashtags like “#sp” or “#partner” without context.
Place disclosures at the end of captions where they are unlikely to be seen.
Claim personal use or experience with a product if that is untrue.
Promote deceptive claims made by the brand without verifying accuracy.

EXAMPLE OF #5:

A fitness influencer states a brand claim in a video, “These fat burners literally melt belly fat overnight! I’ve been using them for a week and I’m already down 7 pounds. You guys have to try this!”

BUT:

The influencer didn’t actually independently verify the company’s claims.
The statement “melts belly fat overnight” is medically unsubstantiated and likely false.
Testimony is exaggerated or based on anecdotal weight fluctuations, not proven product effects.
The post does not contain a disclosure that she was paid or gifted the supplements.
- Under FTC law, this influencer can be held liable for repeating deceptive or unproven brand claims, especially when stated as fact. The brand is also liable for enabling this. FTC’s stance: “Don’t say something is effective unless you have proof — and don’t rely on the brand’s word alone.”
  
  (FTC Endorsement Guides, 2023)

Now… Let’s say the influencer did actually use the supplement and really did lose 7 pounds in a week. It might feel like they’re just “sharing their story.” But under FTC guidelines, that still doesn’t make it compliant if:

The claim itself is deceptive.Statements like “melts belly fat overnight” implies a scientific or medical result, which must be backed by reliable evidence (typically clinical studies). Personal experience is not enough to justify these types of claims.
The experience is not typical.Even if the influencer lost 7 pounds, if the majority of users don’t, the influencer must include a disclaimer such as “Results not typical” or “Average user loses 1-2 pounds per week.”
There’s still no disclosure of the partnership.If the product was gifted or the influencer was paid to post about it, that connection must be disclosed clearly and early in the content.

PRO TIP (what the influencer can / should say instead):

“I’ve been trying this new fat burner for the past week and noticed some water weight loss, but everyone’s body is different. This was gifted to me, so do your research and talk to your doctor before trying anything new.”

These rules are enforced under the FTC Act (15 U.S.C. §§ 41–58) and the Lanham Act, and in many states, including Nevada and California, consumer protection laws provide grounds for class-action lawsuits when false or deceptive marketing is involved (Federal Trade Commission, 2023; Buchalter, 2024).

The Lawsuits Are Already Happening

If you think these rules are theoretical or rarely enforced, think again! The first half of 2025 has already produced multiple class actions where both brands and influencers are named as co-defendants.

Here are just 3 currently open class action cases in the Federal Court System in the U.S.:

Negreanu v. Revolve Group, Inc. (filed April 2025, California) The plaintiff, a Florida resident, seeks to represent a nationwide class (with a Florida subclass) and alleges Revolve and the named influencers misled consumers by failing to disclose paid endorsements. The complaint argues the suppression of disclosure allowed Revolve to charge a consistent price premium (10-40%) over competitors, seeking more than $50 million in damages. (MorganLewis, 2025)
Dubreu v. Celsius Holdings, Inc. (filed January 2025) A California resident named three influencers and Celsius as defendants. The claim alleges the influencers endorsed the brand without disclosing they were paid, misleading consumers and inflating prices. Plaintiffs seek in excess of $450 million in damages under federal and California state consumer protection laws. (AdvertisingLaw, 2025)
Bengoechea v. Shein (filed February 2025) Plaintiffs allege Shein and multiple influencers failed to make clear, conspicuous disclosures, hiding them among hashtags or behind “see more” buttons. The suit seeks more than $500 million in damages for deceptive advertising under federal and multiple state laws. (CoblentzLaw, 2025)

Further, outside the courtroom, regulators are “tightening the screws”. The National Advertising Division recently flagged high-profile figures like Kevin Hart for insufficient transparency in posts tied to Fabletics and JPMorgan Chase (Lopez, 2025). And overseas, one of Italy’s most famous influencer, Chiara Ferragni, now faces criminal fraud charges tied to falsely advertised charitable promotions (Colombo, 2025).

The list goes on and on! I’m not sure how much more serious this topic can get.

Why This Hits Vegas Harder Than Most

We locals know Las Vegas is a total hotspot for influencer marketing, especially in food, nightlife, and experiential content. But we’re also a small-town ecosystem wrapped in a big-city brand. What happens here does not stay here, it actually spreads really fast. A single scandal could damage the reputations of countless creators and businesses. And reputation is everything in this city!

Many Las Vegas influencers operate in the legal and ethical gray area (accepting payment for visibility without any clear labeling, which I personally witness on a daily basis!). When consumers can’t tell the difference between editorial content and a paid plug, trust is broken. Worse, when no disclosures are made, the brand and influencer are both liable.

And let’s get real: small business owners are the most at risk because they often lack legal teams, PR guidance, or crisis management strategies. One careless post could turn into a wildly expensive legal battle.

How Everyone Loses

The fallout is not limited to just lawsuits.

Businesses lose when they bet on influencers who cannot drive ROI or who may create legal risk. They also lose when they can’t uphold the ‘hype’ an influencer has created, leaving actual patrons disappointed in their experience.

Influencers lose when their credibility drops (because they hyped a lie) or their names appear in federal court documents.

Consumers lose when they are manipulated into purchases under false pretenses.

And frankly… the entire digital marketing industry loses when trust erodes across the board.

Pro Tips for Vegas Influencers (From Someone Who Cares)

Some may consider this article as an attack, when in reality, it’s a public service. I sincerely want Vegas creators to succeed long-term, not flame out in a courtroom or collapse under a credibility crisis (which is already happening!). I want Vegas locals to have more trust in our influencers and I want Vegas businesses to provide better experiences worth paying for and hyping about!

10 things Vegas influencers can do to start hyping the right way:

Disclose early, often, and clearly. The first few words of your caption or video should acknowledge the partnership.
Use the platform tools. If Instagram or TikTok gives you a way to tag a paid partnership, use it.
Audit your content. Go back and fix past posts that did not follow the law. Better to clean it up now than get subpoenaed later!
Set boundaries with brands. If a brand asks you to hide the relationship, don’t work with them! They are putting you at personal legal risk!
Learn the law and understand your role. If you are accepting payment, you are not “just a content creator”, you are a media channel, and the law treats you as such.
Invest in trust. Your long-term influence is built on credibility, not clicks. Choose relationships that align with your voice and your personal values/ethics.
Use Ai to help guide you. Run your script through Ai and have it double check for compliance with FTC rules.
Protect Yourself Legally. Include proper clauses in your partnership or influencer agreements and make sure it’s signed by both parties before beginning the work.
Keep Records. Don’t delete conversations with clients or any other records. Always save documentation, because you never know what might defend you later on.
Create a personal disclosure policy & make it Public. Paid influencers are professionals, not just public individuals voicing opinions, so act like it and treat yourself as a brand. Write a 1-2 paragraph disclosure policy and publish it in your media kit, website, social media bio links, etc. This builds trust with followers and ethical companies looking to hire you. Additionally (perhaps most importantly), it helps prove intent to comply with the FTC guidelines.

Bold Truth for a Better Vegas: Closing Thoughts

Las Vegas is full of talented creators who think they are just helping Vegas businesses succeed. But if we want to build an influencer scene that is respected, sustainable, and legally sound, we must lead with transparency and ethics.

I work with businesses, creatives, and consumers. I see the gaps every single day. I also see the opportunities! If we get this right, Las Vegas can LEAD a new standard built not just on hype, but on honesty & integrity.

To Vegas Business Owners > Influencers should never be the “fix” for a broken guest experience or poor service standards. If your service or customer experience (CX) sucks in reality, especially after being hyped, you now have a higher risk for bad reviews, low customer retention, negative word-of-mouth marketing, and the kind of backlash no marketing campaign can clean up.

That’s literally where my firm comes in. (Although I'm pretty good at cleaning up messes, I prefer being the strategic partner who helps you avoid those kinds of risks!)

At La CRITIQUE, we help Vegas businesses: