In February 2025, the FTC sent warning letters to seven fashion and beauty brands. The allegation in each case: AI-generated or AI-enhanced content in commercial advertising without required disclosure. The letters are not enforcement actions — yet. But they are a clear signal that the FTC is actively monitoring the fashion industry's use of AI in advertising, and that warning letters precede formal complaints.
Here's what the updated endorsement guides require, how they apply to common fashion brand scenarios, and what disclosure language actually satisfies the standard.
The legal framework: why AI origin is a "material fact"
The FTC's Endorsement Guides (updated effective June 2023, with additional AI-specific guidance issued in 2025) require disclosure of material connections between advertisers and the content they present as genuine consumer experience or authentic representation.
AI origin qualifies as a material fact under this framework because research consistently demonstrates that consumers make different decisions — about purchases, about brand trust, about the products themselves — when they know imagery or content is AI-generated versus photographed or written by humans. If consumers would act differently knowing the truth, the truth must be disclosed. This is the FTC's long-established standard applied to a new context.
The 2025 guidance explicitly extends this standard to:
AI-generated campaign imagery — photorealistic images generated by AI and used in advertising must be disclosed as AI-generated, regardless of how realistic they appear.
Synthetic influencers and AI spokespeople — AI-generated personas used in social media, advertising, or branded content must be identified as AI. A synthetic influencer presented as a real person without disclosure is deceptive.
AI-generated testimonials and reviews — testimonials written by AI or generated using AI tools must be disclosed as AI-generated, even if they accurately reflect real consumer experiences.
Substantially AI-altered real imagery — photographs of real products or people that have been substantially altered using AI in ways that misrepresent the actual product or person.
The warning letters: what the FTC is seeing in fashion
While the FTC has not published detailed findings from the February 2025 warning letters, the pattern of issues identified in the broader enforcement program and public FTC guidance points to the following common scenarios in fashion:
Social media posts using AI-generated product imagery without disclosure. A garment depicted in a post on Instagram or TikTok looks real because AI has rendered it photorealistically — but the garment was never photographed, the model was never hired, and the colours and textures shown don't match what will ship.
Brand partnerships with synthetic influencers. AI-generated social media personas with realistic profile photos, backstories, and posting histories promoting fashion brands. The audience believes they're following a real person's style journey.
AI-generated reviews on e-commerce platforms. Customer reviews generated by AI presented as authentic customer feedback. The FTC's position is clear: this is deceptive regardless of whether the reviews are accurate.
Campaign imagery using AI-generated synthetic models without disclosure. Advertising imagery featuring photorealistic AI-generated models presented without identification as AI-generated.
What disclosure actually looks like — and what doesn't work
The FTC's standard for adequate disclosure: clear, conspicuous, and proximate to the content at the moment it's encountered. The disclosure must be understandable to ordinary consumers, not just people familiar with AI terminology.
What works:
In social media posts: "AI-generated image" or "Created with AI" in the post caption, before any truncation ("see more" cutoff), as a text label on the image itself, or both. A hashtag (#AIgenerated, #AIcontent) may satisfy the requirement if it's clear and proximate, but the FTC has indicated it prefers explicit text disclosure to hashtags.
In advertising creative: A visible text label on the ad unit — not exclusively in the fine print — identifying AI-generated elements. "AI-generated imagery" as an on-creative label satisfies the standard.
On e-commerce product pages: Where AI-generated imagery is used instead of photography, disclosure on the product page proximate to the imagery. "Rendered visualisation" or "AI-assisted product render" are acceptable formulations.
What doesn't work:
Disclosure buried in website terms of service, privacy policies, or boilerplate fine print. Disclosure made only in brand FAQs or "about" pages rather than proximate to the specific content. Disclosure that only appears on hover or in collapsed content that most consumers won't encounter.
The test is not whether a disclosure exists somewhere in your content ecosystem. The test is whether a reasonable consumer encountering this specific piece of content would see and understand the disclosure.
Synthetic influencers: a specific compliance framework
Brands using AI-generated personas in social media or advertising have a specific compliance challenge: the persona's AI nature must be disclosed in a way that reaches the audience, not just in meta-level brand communications that most followers will never read.
Compliant synthetic influencer practice requires:
Clear identification in the account bio that the account represents an AI-generated persona — not buried in the third paragraph, but as a prominent bio statement.
Disclosure in each piece of sponsored or branded content that the persona is AI-generated. The brand partnership obligation and the AI identity obligation are separate and both apply.
No presentation of the synthetic persona as a real person — including in press materials, partner communications, or any context where the audience might reasonably believe they're engaging with a real individual.