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The Convo Happening Behind Closed Doors

Author

Kaeya Majmundar
July 30, 2025

This month, I sent this follow-up to a founder who runs an ad agency buying memes, viral tweets, as well as traditional UGC (ie commissioning unboxing videos from creators) to turn into cost effective ads.

They asked: “Which of our clients are most exposed to lawsuits?”

Here's the answer I gave them — redacted, but verbatim.

This is how real teams are starting to think about UGC ad compliance, class actions, and what it means to build legally defensible creator workflows in 2025.

Hi [REDACTED],

Thanks again for chatting! It was helpful to talk through where your urgency to tackle compliance came from.

TLDR: Remember, your goal isn’t to be perfect. It’s to be a safe partner to your clients who will need to show proof of good faith ad compliance efforts if they ever get questioned.

Re: Your Key Question: 

You asked which of our clients are most exposed to regulatory action.

Any viral client.

Put bluntly: [REDACTED] is a dream target for consumer protection lawsuits.

We recommend taking a cautious approach with your most viral clients, especially when repurposing memes / UGC you find online as ads.

Here’s what we heard you need:

– to run ads using content you find on the internet (ie: viral tweets about [REDACTED])

– to avoid major exposure to federal, state, or class-action-level lawsuits

– to keep costs in check and go fast

We put a quick risk assessment for [REDACTED].

SUMMARY:

Your current workflow

Our recommendation

Risk to your clients who advertise in the US:

Dangerously high now with FTC 16 CFR Part 255 in effect since Oct 2024

Link to official announcement

Get a minimum viable compliance protocol in place before running UGC ads, especially to US audiences

Link to official guidelines

DEEP DIVE:

Your current workflow

Our recommendation

Getting content rights

Inconsistent 

(ie: DMs or skip entirely) 

🚨 This is no longer just about creators potentially suing. It now feeds angry consumer class action lawsuits like this one against Shein.

Create one compliance protocol and STICK WITH IT.

(ie: create a content rights request form and have creator fill that form out every single time you’re buying content)

Record keeping

Note: This “record keeping” section is where 90% of brands are still exposed.

Inconsistent 

(ie: Screenshots, emails, Venmo payment history for content usage rights)

🚨 Doesn’t hold up in court

Make sure your record keeping is COURT DEFENSIBLE.

(ie: how Docusign contracts with built-in timestamps are stronger than verbal agreements / email exchanges)

Rule following

Reactive

(ie: publish ad, and wait until it gets taken down for compliance violations before reading into it / addressing it)

🚨 If lawsuit threats / complaints come up, your costs are extremely high

Make sure your compliance measures are PROACTIVE.

(ie: implement a checklist that follows FTC 16 CFR Part 255 before publishing any ads)

Result of implementing recommendations:

✅ You’re ready before the complaint hits, not reacting once it hits. That’s 10x faster, cheaper, and better for client trust.

Lmk if we can help with anything else!

Kaeya

PS: Examples you might find relevant

US examples:

  • Influencers were hit with class actions for not labeling sponsored content  e.g., Celsius and Shein. (read more)

  • FTC now goes after brands and agencies if UGC lacks proper disclosure. (read more)

  • A few brands got sued just for reposting memes and tweets without permission. (read more)

EU examples:

  • Gifted products = ads if there’s a post. German courts say disclose it. (read more)

  • Memes must meet parody standards or they breach copyright. (read more)

  • Meta was fined in Germany for not blocking defamatory memes. Platforms became liable. (read more)

END.

The scary part isn’t that these risks exist. The scary part is how invisible they’ve been until now.

If you’re running influencer, meme, or UGC-based ads without a structured system for consent, disclosures, and audit logs, you’re not alone. But you’re also not protected.

These aren’t theoretical risks anymore. They’re starting to hit brands, agencies, and platforms at scale.

And if you’re not having this conversation yet, your competitors are.

Kaeya