Does Kim Kardashian really use and love the at-home hair removal laser she endorses on Twitter? Maybe, maybe not. We’re not privy to her hair removal tactics. We do know, however, that she can “earn” up to $10,000 per tweet endorsing a product.

As consumers, is that our business? Turns out it is, according to the FTC.

This is old news in the traditional advertising and marketing sectors. Take payola in radio in the 1950s. There were scandals when several popular radio DJs, such as Mr. Dick Clark himself, were found to have monetary stakes in the records they featured on their shows. The payola investigations started as ASCAP’s way of stamping out rock ‘n’ roll. While that was an ultimately unsuccessful effort (thank the rock gods), these scandals brought lasting attention to the dos and don’ts of disclosing endorsements.

So, what’s new about these guidelines? The FTC updated their rules in 2009 to include disclosure of paid endorsements on social media and blogs. And it’s not just cash exchanging hands that needs to be reported. Any type of material exchange must be disclosed. Just like it’s frowned upon for journalists to accept gifts, it is equally unethical for bloggers to do so. Just ask Ann Taylor LOFT, which had a bit of a social media snafu in 2010.

The bottom line? Make sure customers know when money or gifts are given to someone endorsing your product. And make sure that you, as a blogger or marketer, disclose any exchange of goods in return for a post, just as Jason Falls did when discussing Argyle Agency.

It won’t just keep you out of legal trouble. This honesty and transparency also earns stronger trust from your audience. We actually really like the suggestion put forth here by Lynn Terry.  Lynn tags any tweets that she’s getting compensated for with -aff.

What are your thoughts? Do you have any experience with disclosing endorsements? Do you know of a situation where disclosure was neglected? We’d like to hear in the comments section.