Top 10 Advertising Compliance List:

Make Sure Your Ad's Claims Aren't Deceptive

Description

Regardless of whether you advertise on the Internet or any of the new media--or you're a large advertiser making a broadcast network buy--there are quite a few things that you should review first--before you place that media buy or create that ad. And, of course, you should consult with a legal professional before you launch any ad campaign. This article is a useful review of 10 key areas you should look at when you're reviewing your advertising to see if it's in compliance with the numerous laws, rules, regulations and guidelines that may affect your ads.

Item #2. Make Sure Your Advertising Claims Aren't Deceptive

This is not nearly as easy as it sounds. The starting point for any advertiser, ad agency or their attorney is the Federal Trade Commission Deception Policy Statement, October 14, 1983, which states, in part:

"Section 5 of the FTC Act declares unfair or deceptive acts or practices unlawful. Section 12 specifically prohibits false ads likely to induce the purchase of food, drugs, devices or cosmetics. Section 15 defines a false ad for purposes of Section 12 as one which is "misleading in a material respect." * * * Numerous Commission and judicial decisions have defined and elaborated on the phrase "deceptive acts or practices" under both Sections 5 and 12. Nowhere, however, is there a single definitive statement of the Commission's view of its authority. The Commission believes that such a statement would be useful to the public, as well as the Committee in its continuing review of our jurisdiction.

We have therefore reviewed the decided cases to synthesize the most important principles of general applicability. We have attempted to provide a concrete indication of the manner in which the Commission will enforce its deception mandate. In so doing, we intend to address the concerns that have been raised about the meaning of deception, and thereby attempt to provide a greater sense of certainty as to how the concept will be applied.

* * *

Certain elements undergird all deception cases. First, there must be a representation, omission or practice that is likely to mislead the consumer.* * * Practices that have been found misleading or deceptive in specific cases include false oral or written representations, misleading price claims, sales of hazardous or systematically defective products or services, without adequate disclosures, failure to disclose information regarding pyramid sales, use of bait and switch techniques, failure to perform promised services, and failure to meet warranty obligations.* * *

Second, we examine the practice from the perspective of a consumer acting reasonably in the circumstances. If the representation or practice affects or is directed primarily to a particular group, the Commission examines reasonableness from the perspective of that group.

Third, the representation, omission, or practice must be a "material" one. The basic question is whether the act or practice is likely to affect the consumer's conduct or decision with regard to a product or service. If so, the practice is material, and consumer injury is likely, because consumers are likely to have chosen differently but for the deception. In many instances, materiality, and hence injury, can be presumed from the nature of the practice. In other instances, evidence of materiality may be necessary.

Thus, the Commission will find deception if there is a representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment."

You should then carefully read these sections of the Federal Trade Commission Act:

Section 5. It declares unfair or deceptive acts or practices unlawful.

Section 12. It specifically bars false ads likely to induce the purchase of food, drugs, devices or cosmetics.

Section 15. This section defines a false ad for purposes of Section 12 as one that's "misleading in a material respect."

Next, you should stay abreast of the plethora of FTC and court decisions that have defined and explained--and continue to define and explain--the phrase "deceptive acts or practices."

Advertising Compliance Service has throughout its 30+ years reported on and examined all the important FTC cases in this key advertising compliance area.

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