The
Federal Trade Commission Act allows the FTC to act in the interest
of all consumers to prevent deceptive and unfair acts or practices.
In interpreting Section 5 of the Act, the Commission has determined
that a representation, omission or practice is deceptive
if it is likely to:
- mislead consumers and
- affect consumers' behavior or decisions about the product
or service.
In addition, an
act or practice is unfair if the injury it causes, or is
likely to cause, is:
- substantial
- not outweighed by other benefits and
- not reasonably avoidable.
The FTC Act prohibits
unfair or deceptive advertising in any medium. That is, advertising
must tell the truth and not mislead consumers. A claim can be misleading
if relevant information is left out or if the claim implies something
that's not true. For example, a lease advertisement for an automobile
that promotes "$0 Down" may be misleading if significant
and undisclosed charges are due at lease signing.
In addition, claims
must be substantiated, especially when they concern health,
safety, or performance. The type of evidence may depend on the product,
the claims, and what experts believe necessary. If your ad specifies
a certain level of support for a claim - "tests show X"
- you must have at least that level of support.
Sellers are responsible for claims they make about their products
and services. Third parties - such as advertising agencies or website
designers and catalog marketers - also may be liable for making
or disseminating deceptive representations if they participate in
the preparation or distribution of the advertising, or know about
the deceptive claims.
· Advertising agencies or website designers are responsible for reviewing the information
used to substantiate ad claims. They may not simply rely on an advertiser's
assurance that the claims are substantiated. In determining whether
an ad agency should be held liable, the FTC looks at the extent
of the agency's participation in the preparation of the challenged
ad, and whether the agency knew or should have known that the ad
included false or deceptive claims.
· To
protect themselves, catalog marketers should ask for material
to back up claims rather than repeat what the manufacturer says
about the product. If the manufacturer doesn't come forward with
proof or turns over proof that looks questionable, the catalog marketer
should see a yellow "caution light" and proceed appropriately,
especially when it comes to extravagant performance claims, health
or weight loss promises, or earnings guarantees. In writing ad copy,
catalogers should stick to claims that can be supported. Most important,
catalog marketers should trust their instincts when a product sounds
too good to be true.
Other points to consider:
· Disclaimers and
disclosures must be clear and conspicuous. That is, consumers
must be able to notice, read or hear, and understand the information.
Still, a disclaimer or disclosure alone usually is not enough to
remedy a false or deceptive claim.
·Demonstrations
must show how the product will perform under normal use.
· Refunds must
be made to dissatisfied consumers - if you promised to make them.
· Advertising directed to children raises special issues. That's because children may have greater
difficulty evaluating advertising claims and understanding the nature
of the information you provide. Sellers should take special care
not to misrepresent a product or its performance when advertising
to children. The Children's Advertising Review Unit (CARU) of the
Council of Better Business Bureaus has published specific guidelines
for children's advertising that you may find helpful.
Dot Com
Disclosures: Information About Online Advertising, an FTC
staff paper, provides additional information for online advertisers.
The paper discusses the factors used to evaluate the clarity and
conspicuousness of required disclosures in online ads. It also discusses
how certain FTC rules and guides that use terms like "writing"
or "printed" apply to Internet activities and how technologies
such as email may be used to comply with certain rules and guides. |