Truth in Advertising and Marketing and Other FTC Regulations
Provided by HG.org
When consumers see or hear an advertisement on the Internet, radio, in print, on a billboard, on television, or anywhere else, federal law says that the ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence.
The Federal Trade Commission enforces these truth-in-advertising laws, and it applies the same standards no matter where an ad appears. The FTC is especially critical of advertising claims that can affect consumers’ health or their pocketbooks. When the FTC finds a case of fraud perpetrated on consumers, the agency files actions in federal district court for immediate and permanent injunctions and orders to stop scams; to prevent fraudsters from perpetrating scams in the future; to freeze their assets; and to obtain financial relief for the victims of these falsehoods.
Protecting Consumers from Fraud and Deception
As the nation’s consumer protection agency, the Federal Trade Commission has a broad mandate to protect consumers from fraud and deception in the marketplace. To fulfill this goal, the FTC takes law enforcement actions, provides consumer and business education, issues reports and policy guidance, leads workshops, and participates in other forums.
FTC Requirements for Environmentally Safe (“Green”) Products
So called “green” products, meant to protect the environment, have become very popular in the last few years in America. Companies have responded with “green” marketing touting the environmental benefits of what they are selling. But, sometimes what companies claim about their “green” products, and the reality are very different things. As a result, the Federal Trade Commission has released Green Guides designed to help marketers avoid making environmental claims that mislead consumers.
The Green Guides were first issued in 1992 and were revised in 1996 and 1998. The guidance they provide includes: 1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers.
The FTC recently proposed an update of the Guides that is designed to make them easier for companies to understand and use. The proposed changes include new guidance on marketers’ use of product certifications and seals of approval, claims about materials and energy sources that are “renewable,” and “carbon offset” claims.
The FTC’s Endorsement Guides
Endorsements are an important marketing tool for advertisers and can be persuasive to consumers. But the law requires endorsements also be truthful and not misleading. The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising are guidelines designed to help advertisers make sure that they meet this standard. For example, advertisers are advised that using unrepresentative testimonials may be misleading if they are not accompanied by information describing what consumers can generally expect from use of the product or service. In addition, the Endorsement Guides let endorsers know that they should not talk about their experience with a product if they have not tried it, or make claims about a product that would require proof they do not have.
A famous example of this requirement in practice: Joe Namath in pantyhose.
The Endorsement Guides also state that if there is a connection between the endorser and the marketer of a product that would affect how people evaluate the endorsement, it should be disclosed. The Guides are not regulations, and so there are no civil penalties associated with them. But if advertisers do not follow the guides, the FTC may decide to investigate whether the practices are unfair or deceptive under the FTC Act.
The FTC revised its Endorsement Guides in October 2009 to keep them up-to-date with current marketing techniques, such as blogging and word-of-mouth advertising. The Guides point out that marketers using these new techniques are subject to the same truthful advertising laws that other forms of advertising always have been. That means, among other things, that marketers who are compensated to promote or review a product should disclose it.
What Shoppers Need to Know About Gift Cards
Retail gift cards have become an increasingly popular way for consumers to buy things. However, in light of the economic downturn, many consumers have been asking what they should do to protect themselves if they have purchased gift cards from a retailer, and that retailer later files for bankruptcy or goes out of businesses.
New federal rules went into effect in 2010 that are designed to protect consumers by restricting gift card fees and gift card expiration dates. These rules apply to two types of cards: Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express or Visa and can be used wherever the brand is accepted.
The FTC has brought enforcement actions against several companies for deceptive marketing of gift cards. It also has information available for consumers about shopping for and using gift cards.
FTC Funeral Rules
When a loved one dies, grieving family members and friends are frequently confronted with dozens of decisions about the funeral, all of which must be made quickly and under great emotional duress. Under the FTC’s Funeral Rule, consumers have the right to get a general price list from a funeral provider when they ask about funeral arrangements. They also have the right to choose the funeral goods and services they want (with some exceptions), and funeral providers must state this right on the general price list. If state or local law requires purchase of any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law. The funeral provider may not refuse, or charge a fee, to handle a casket bought elsewhere, and a provider offering cremations must make alternative containers available. The FTC conducts undercover inspections every year to make sure that funeral homes are complying with the agency’s Funeral Rule.
Health and Fitness Claims
Americans spend billions every year on supplements, foods, and devices in hopes of improving their health and fitness. But not all of these products live up to the advertised claims. The Federal Trade Commission combats this type of deceptive advertising in coordination with the Food and Drug Administration. The FTC also seeks the expertise of other government authorities, including the National Institutes of Health. All too often, the health claims made for these products are false or unproven. Over the last decade, the FTC has filed one hundred and twenty cases challenging health claims made for supplements. Meanwhile, in recent years there has been a trend in food advertising toward making unproven claims that eating certain foods can improve health and even reduce the risk of serious illnesses such as prostate cancer and heart disease.
If you believe you have been the victim of false or misleading advertising, you should contact the FTC to file a claim. You should also consider contacting a local attorney who can advise you as to whether you have direct claims of your own. You may be able to obtain a refund, compensation for any resulting injuries, and in some cases, even punitive damages.
Copyright HG.org - Google+
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Protecting Consumers from Fraud and Deception
As the nation’s consumer protection agency, the Federal Trade Commission has a broad mandate to protect consumers from fraud and deception in the marketplace. To fulfill this goal, the FTC takes law enforcement actions, provides consumer and business education, issues reports and policy guidance, leads workshops, and participates in other forums.
FTC Requirements for Environmentally Safe (“Green”) Products
So called “green” products, meant to protect the environment, have become very popular in the last few years in America. Companies have responded with “green” marketing touting the environmental benefits of what they are selling. But, sometimes what companies claim about their “green” products, and the reality are very different things. As a result, the Federal Trade Commission has released Green Guides designed to help marketers avoid making environmental claims that mislead consumers.
The Green Guides were first issued in 1992 and were revised in 1996 and 1998. The guidance they provide includes: 1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers.
The FTC recently proposed an update of the Guides that is designed to make them easier for companies to understand and use. The proposed changes include new guidance on marketers’ use of product certifications and seals of approval, claims about materials and energy sources that are “renewable,” and “carbon offset” claims.
The FTC’s Endorsement Guides
Endorsements are an important marketing tool for advertisers and can be persuasive to consumers. But the law requires endorsements also be truthful and not misleading. The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising are guidelines designed to help advertisers make sure that they meet this standard. For example, advertisers are advised that using unrepresentative testimonials may be misleading if they are not accompanied by information describing what consumers can generally expect from use of the product or service. In addition, the Endorsement Guides let endorsers know that they should not talk about their experience with a product if they have not tried it, or make claims about a product that would require proof they do not have.
A famous example of this requirement in practice: Joe Namath in pantyhose.
The Endorsement Guides also state that if there is a connection between the endorser and the marketer of a product that would affect how people evaluate the endorsement, it should be disclosed. The Guides are not regulations, and so there are no civil penalties associated with them. But if advertisers do not follow the guides, the FTC may decide to investigate whether the practices are unfair or deceptive under the FTC Act.
The FTC revised its Endorsement Guides in October 2009 to keep them up-to-date with current marketing techniques, such as blogging and word-of-mouth advertising. The Guides point out that marketers using these new techniques are subject to the same truthful advertising laws that other forms of advertising always have been. That means, among other things, that marketers who are compensated to promote or review a product should disclose it.
What Shoppers Need to Know About Gift Cards
Retail gift cards have become an increasingly popular way for consumers to buy things. However, in light of the economic downturn, many consumers have been asking what they should do to protect themselves if they have purchased gift cards from a retailer, and that retailer later files for bankruptcy or goes out of businesses.
New federal rules went into effect in 2010 that are designed to protect consumers by restricting gift card fees and gift card expiration dates. These rules apply to two types of cards: Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express or Visa and can be used wherever the brand is accepted.
The FTC has brought enforcement actions against several companies for deceptive marketing of gift cards. It also has information available for consumers about shopping for and using gift cards.
FTC Funeral Rules
When a loved one dies, grieving family members and friends are frequently confronted with dozens of decisions about the funeral, all of which must be made quickly and under great emotional duress. Under the FTC’s Funeral Rule, consumers have the right to get a general price list from a funeral provider when they ask about funeral arrangements. They also have the right to choose the funeral goods and services they want (with some exceptions), and funeral providers must state this right on the general price list. If state or local law requires purchase of any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law. The funeral provider may not refuse, or charge a fee, to handle a casket bought elsewhere, and a provider offering cremations must make alternative containers available. The FTC conducts undercover inspections every year to make sure that funeral homes are complying with the agency’s Funeral Rule.
Health and Fitness Claims
Americans spend billions every year on supplements, foods, and devices in hopes of improving their health and fitness. But not all of these products live up to the advertised claims. The Federal Trade Commission combats this type of deceptive advertising in coordination with the Food and Drug Administration. The FTC also seeks the expertise of other government authorities, including the National Institutes of Health. All too often, the health claims made for these products are false or unproven. Over the last decade, the FTC has filed one hundred and twenty cases challenging health claims made for supplements. Meanwhile, in recent years there has been a trend in food advertising toward making unproven claims that eating certain foods can improve health and even reduce the risk of serious illnesses such as prostate cancer and heart disease.
If you believe you have been the victim of false or misleading advertising, you should contact the FTC to file a claim. You should also consider contacting a local attorney who can advise you as to whether you have direct claims of your own. You may be able to obtain a refund, compensation for any resulting injuries, and in some cases, even punitive damages.
Copyright HG.org - Google+
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
