Accurate Advertising and the FTC

When it comes to advertising or marketing your small business you might want to reference a few rules and regulations that are in place. For example, there is a law called the Federal Trade Commission Act that allows the FTC to act in the interest of all consumers to prevent deception or/ and unfair acts or practices. http://www.business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road

Essentially, what the law states is that the commission (FTC) has the right to evaluate your claim and determine if the claim on your site represents or practices a form of deception.  Likely forms of deception are: intentionally misleading consumers, making medical statements without a doctor’s approval, disclaimers or disclosures that cannot be substantiated, or warranties and guarantees that are not being delivered.

One of the more common problems with online businesses is the zero down policy for places like automobile sites. For example, the site promotes “$0 Down” but when you arrive at the dealership there are undisclosed charges due at lease signing.  While this marketing tactic is not in violation of the FTC Act it is a form of deception which makes it difficult for start-up companies to thrive in the market.

Furthermore, “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.” (directly from FTC Act) http://www.business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road

“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.” (http://business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road)

So how do you keep yourself off of the list of the FTC’s most wanted?

Make sure that you abide by all laws and claims on your site. Make sure that your claims in advertisements are truthful, are not deceptive or unfair, are evidence-based and If you decide to claim a money back guarantee than stand by your word.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. (http://business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road)

You can find the FTC Act in its entirety at: http://www.ftc.gov/ogc/ftcact.shtm

Or at: http://www.law.cornell.edu/uscode/text/15/chapter-2/subchapter-I