Four complaints about Instagram posts by Simone Anderson have been upheld by the Advertising Standards Authority in the first decision of its kind against a social media influencer.
The complaints in the test case relate to the way Anderson, who has 313,000 followers on Instagram, posted content that was advertising but not clearly labelled.
It follows revelations by the Herald on Sunday and Weekend Herald that Anderson has been accused by some followers of not providing proof of claims she donated money earned from gifted clothing sold on Facebook, to charity.
Both the ASA and the Commerce Commission have received complaints about Simone's Second Hand Wardrobe page, where Anderson sells her gifted clothing and accessories for cut down prices claiming that all proceeds go to charity.
In the ASA decision released online today, the complaints board said it had received four complaints about two Instagram posts by Anderson, who shot to fame after losing 92kg and documenting it on social media.
The first related to a post of Anderson posing on the beach in activewear with the caption: "Our little stroll this morning was so gusty!! Crop and tights @aimn.oceania 'Simone10'."
The second post showed the 29-year-old Aucklander having high tea with the caption: "Enjoying the new Autumn high tea menu at @cordisauckland - always such a treat!"
The caption included a prize giveaway code and tags to the fashion retailers of the top, pants and shoes in the photo.
Three complainants said the first post was misleading by not making clear there was a commercial relationship between the poster and the activewear company being promoted.
A fourth person complained there was a lack of transparency in a series of posts concerning a Cordis Hotel weekend trip including whether the hotel stay and experience was gifted or sponsored.
The board of nine industry experts said the complaints raised issues of truthful presentation and identifying advertising.
Anderson told the ASA after receiving the complaint the first post was amended to include the hashtag "Gifted" and explained Aim'n Oceania code was an affiliate code meaning someone using it gets a 10 per cent discount and the influencer gets 5 per cent of sales.
"A further response from the advertiser's management upon receipt of the complaint for advertisement 2 confirmed the relationship with both Aim'n Activewear and Cordis Hotels was not controlled or guided by the companies and that they have ensured posts are adequately marked with #gifted."
The board found Cordis Hotels had an ongoing relationship with Anderson but no formal contract.
The hotel stay was given in exchange for content on social media and it advised the hashtag "#Gifted" should be added, the decision said.
Aim'n Oceania Activewear said it would remind advertisers to label posts with gifted hashtags or make the affiliation clear.
The complaints board agreed the first post was an advertisement because Anderson was receiving payment in the form of free goods and commission through the affiliate code.
"She also has direct control over a message, whose intent is to influence her followers to purchase the activewear being promoted."
The board noted there could be a number of parties involved in commercial arrangements in influencer advertising and all had a role to play to ensure advertisements were transparent, responsible and complied with the Advertising Standards Code.
"The complaints board agreed there was nothing wrong with being paid to create content by receiving gifts, services and hotel stays for free, but when this occurs there should be full disclosure up front about this commercial arrangement with the audience."
Affiliate codes which generate payment for each sale was an even more direct form of payment making it important the financial arrangement was clear to audiences, the board said.
The board agreed the post was organic content and the commercial intent in the message was not obvious.
Most agreed adding the hashtag "Gifted" was not enough, that it was ambiguous and did not identify the ongoing arrangement between Anderson and the activewear company.
The first post therefore breached the Code around being truthful, balanced and not misleading, and advertised as such.
On the hotel post the complaints board said it was again presented as organic content and the commercial intent and ongoing relationship was not obvious. It breached the same rule.
The decision was the first one the complaints board had made on issues around influencer advertising and identification, with past ones involving Art Green and All Blacks Beauden Barrett and Damian McKenzie being settled.
The board requested the ASA consider publishing further guidance on how to sufficiently identify the commercial relationships between parties.
Meanwhile the board will now consider a further complaint about Anderson, this time about her secondhand clothing Facebook page.
A complaint to the Commerce Commission on May 30 about the same page was released to the Herald under the Official Information Act.
The concerns were that Anderson was "selling gifted clothing and accessories to NZ public via Facebook and claiming to donate money received to charity. Evidence of donations not transparent. Concerns around tax evasion, false advertising, misleading the public, etc".
Anderson made the page unsearchable after the Herald on Sunday revealed the ASA complaint about it and it's understood she still sells gifted clothing on it but no longer claims all proceeds go to charity.
Anderson has not responded to repeated requests for comment.
Liz Delaney, at the talent agency Outspoken which represents Anderson, previously said: "We have no comment to add while there are active claims with the ASA and Commerce Commission".
"We support and respect the process of both organisations and are cooperating fully as they investigate."