The Social Security Administration (SSA) has begun to aggressively enforce Section 1140 of the Social Security Act (the Act), which prohibits financial professionals and firms from disseminating marketing materials that could mislead consumers to believe the agent/firm is associated with or endorsed by the SSA. Section 1140 of the Act also prohibits the reproduction and/or sale of Social Security publications and forms without authorization. With penalties for violations of the Act ranging from $5,000 per penalty (e.g., one flyer has three violations so the fine could be $15,000) up to $25,000 for aired broadcasts or telecasts, below are some helpful reminders and tips for you to consider regarding advertisements relating to social security benefits:
- Avoid a bait and switch scenario– Your clients and prospects should be informed up-front that they are receiving material from an insurance producer. Clients and prospects should not be led to believe that they are, or will be, receiving advice/guidance from a social security representative.
- Avoid scare tactics, creating unnecessary urgency, etc.– Marketing materials should not include content regarding subjects that could be considered a scare tactic or instill an undue sense of urgency in the consumer, i.e., the inevitable demise of Social Security, or Social Security benefits are depleting, act now to help ensure retirement income you can count on.
- Choose appropriate imagery– Advertisements should steer clear of images that could imply you are affiliated with a government organization and those that appear promissory. To put it simply, you should avoid using images of the American flag, bald eagle, falling dollar bills, etc. Additionally, be aware of the color scheme of your advertisements. Are you promoting a seminar that will discuss how a consumer can potentially optimize their monthly Social Security benefit? If so, steer clear of a blue and white color scheme that could infer you are affiliated with the SSA.
- Include disclosures when necessary– When discussing Social Security, be sure to include language similar to, “[Firm Name] is not affiliated with the U.S. government or any governmental agency.” If you marketing material discusses tax strategies relevant to claiming Social Security you will want to include an appropriate disclosure noting that you cannot provide tax advice (unless properly licensed) and consumers should consult with a qualified financial professional regarding their tax questions. Include similar language if you mention topics that are only appropriate for an attorney to discuss (i.e., “. . . cannot provide legal advice . . .”). Depending on the content, additional disclosures may also be necessary.
- Remember, each piece of advertising must stand on its own– Subsequent material used after a consumer responds to a lead mailer must also address an insurance aspect and the material must convey that you are an insurance producer (even if you are dually licensed).