Your Brand Could Be One Step Away from a Class Action Lawsuit Over Influencer Marketing: Here’s Why

In 2025, if nothing is ruling the world, word of mouth is. Influencer marketing is. Authenticity is still a need half of the world's population craves. 

I’d rather purchase a product someone recommends than be the first to try it. It's just not me —but anyone who won't like to be the first to leave an Ebay review. 

Ever been the first to buy a product from Amazon? It's human proclivity to detest that.

We love social proof and influencer marketing has a way of bridging that gap.

Number says it better:

🌱 81% of consumers embraced influencer marketing in the past year.

🛒 76% of users intended to purchase based on a social media post.

📈 Google searches for ‘Influencer Marketing’ rose by 400%.

Influencer marketing is powerful, no doubt. However, with power comes responsibility, and now legal consequences at least from recent happenings.

The last few months have seen the most significant surge in class action lawsuits against brands and influencers participating in UGC.

Lexology published an article on “the rise of class actions on influencer marketing” on the 1st of May. Over six brands were caught up. Just two weeks later, ALO Yoga and a group of influencers were named in a $150M lawsuit.

What’s next?

Here’s why you should care as a brand.

⚠️ Consumers Are Wising Up

With LLMs, TikTok-wannabe- tech channels, and headlines like the latest Lexology article, it’s clear: consumers are more informed than ever.

Post a video these days, and chances are the comment section turns into a legal advice forum. If that video’s about a brand like Revolve, you might find yourself in a situation like Negreanu who's currently leading a lawsuit against the Revolve Group.

Negreanu’s suit is going after $50 million, claiming Revolve used free merch and its influence to get creators to promote products, without being upfront about the brand relationship.

This is a direct hit against FTC guidelines, which say endorsements are totally fine, but if there’s a material connection, you need to “clearly” disclose it.

Shein faced a similar situation in February 2025, with a $500 million class action lawsuit. According to the claim, their growth was driven by influencers who weren’t transparent about getting paid, leading fans to overpay for lower-quality goods.

Celsius was also targeted in the beginning of 2025, alongside three influencers, for allegedly promoting energy drinks without clear sponsorship disclosures. That one’s looking at $450 million in damages.

The list goes on. Lexology article on the 1st of May outlines 6 “known” companies in 2025 who are currently facing influencer marketing class action.

🚫 Brands Can’t Play the “We Didn’t Know” Card

Many brands mistakenly believe outsourcing influencer campaigns to marketing agencies absolves them of legal responsibility.

The FTC explicitly rejects this defense.

The FTC have clearly stated that brands should actively monitor third-party partners and implement “reasonable training, monitoring, and compliance programs.”

Ads caught outside this practice are considered deceptive and carry serious consequences.

In practice, this requires:

✅ Contractual mandates for disclosure compliance.

✅ Regular audits of influencer content - Run audits. Check content. Do the homework.

✅ Immediate corrective action for violations.

✅ Documentation of compliance efforts.

If all this seems like Hard work, this is where SwayID comes in.

SwayID helps alleviate this burden by guiding influencers through clear disclosure rules, so they understand what’s required based on the value of what they receive. 

This provides a compliance trail, timestamped and logged, so your legal team doesn’t have to piece things together and dig through contracts and disclosures.

This makes marketing legally defensible before it becomes a lawsuit.

🁢 The Class Action Domino Effect

The first Domino principle states that your influence must start somewhere.

Class actions don't just spawn out of nowhere. They grow from a domino effect. Sometimes unpredictably.

People look to others to decide what's acceptable, safe, or justified.

Once a few speak up, the rest follow.

Here’s how it usually goes:

•  One consumer complains.
•  A few more echo the same grievance.
• A lawyer steps in and identifies the pattern.

Before long, a class action is filed representing thousands—or millions—of consumers.

The larger the group of consumers a violation affects, the more fertile the ground becomes for a class action.

Usually, a class action is not predictable.

It’s Beyond Financial Implications

While the financial implications of these class action lawsuits can be devastating on its own; the impact can be much more damaging.

Trust is a currency in 2025. Lawsuits have never been friendly to building them or helping a business grow one. The moment a brand is called out for situations like this, people pay close attention. 

Brands face public scrutiny, scramble to adjust marketing strategies, clean up messaging, and do damage control.

All this puts growth at serious risk. 

But the behemoth of all, however, is the financial exhaustion. Outside the allegation demand, you're paying for litigation defence. There's the opportunity cost. There's also not a guarantee you're winning the case. In March 2020, Teami lost to an FTC lawsuit and ended up disbursing 930,000 to consumers, following.

🧠 Final Thoughts: It's no longer low-risk

Influencer marketing isn’t going anywhere but the rules of the game are changing fast. Brands that once saw influencer partnerships as low-risk, high-reward should now treat them as serious legal obligations.

Consumers are more informed, regulators are more vigilant, and lawyers are paying attention.

However, if all this sounds like noise, overwhelming or both, SwayID could be your good news.

SwayID has built the first behavioural compliance OS.

Here's how it works:

✅ One platform for legal, marketing, and creators to align even before collaborating.

✅ AI tools + bite-sized training + specialist support all embedded into your workflow.

This helps provide a compliance trail, timestamped and logged, giving your legal team a digital paper trail, while guiding both the creator and the brand legally to survive chaotic influencer marketing lawsuits.

📣 Ready to Embed Compliance Into Your Influencer Campaign Workflow?

Let us show you how SwayID can help your brand avoid regulatory risk and class action lawsuits.

👉 Book a Demo

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