Advertising Compliance Service

12 Key Advertising Related Laws that You Should Know

Summary

Are you an Internet advertiser who uses interactive advertising, e-mail advertising, or viral marketing? Or do you use the traditional media - print or broadcast - to let consumers know about your product or service? Either way, you should have at least some knowledge of the many statutes affecting advertising law, particularly those administered by the Federal Trade Commission. Reason: You will avoid many costly pitfalls by being armed with this information beforehand.

You should also consult with an attorney who specializes in advertising law before you launch any advertising campaign. Additional benefits of having this knowledge will surface in your discussions with your legal advisor. Because of your knowledge of the various statutes affecting advertising law, you can help make sure that your advertising campaign gets off on the right foot. In addition, because of your knowledge, your attorney will be more in the position of fine-tuning your ad campaign rather than recommending major changes to your ad campaign. And that can save you a significant amount in legal billing costs. This article is a useful review of 12 key advertising related laws you should know about before you review your advertising to make sure your ads don't run afoul of these laws.

1. Section 5 of the Federal Trade Commission Act:

You should be aware that the Federal Trade Commission Act provides a comprehensive framework that enables FTC to carry out its law enforcement initiatives. Under Section 5 of the FTC Act (15 U.S.C. Section 45(a)(1), "unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful". FTC relies on Section 5 and on other more specific consumer protection laws in carrying out its mission. Advertising a product or service certainly fits under this category. Under Section 5, FTC will find that a representation, omission, or practice is deceptive if it's:

1. likely to mislead consumers acting reasonably under the circumstances; and
2. material, that is, likely to affect consumers' conduct or decisions with respect to the product at issue.

In August 1994, Congress amended Section 5 of the FTC Act to provide that an act or practice is unfair if the injury it causes or is likely to cause to consumers is:

1. substantial;
2. not outweighed by countervailing benefits to consumers or to competition; and
3. not reasonably avoidable by consumers themselves.

The remainder of this article tells you about some of the other more specific consumer protection statutes that nevertheless may affect your advertising and/or marketing.

2. Telemarketing and Consumer Fraud and Abuse Prevention Act

The Telemarketing and Consumer Fraud and Abuse Prevention Act requires FTC to promulgate regulations:

1. defining and prohibiting deceptive telemarketing acts or practices;
2. prohibiting telemarketers from engaging in a pattern of unsolicited telephone calls that a reasonable consumer would consider coercive or an invasion of privacy;
3. restricting the hours of the day and night when unsolicited telephone calls may be made to consumers; and
4. requiring disclosure of the nature of the call at the start of an unsolicited call made to sell goods or services.

The law expressly authorizes FTC to include within the rules' coverage entities that "assist or facilitate" deceptive telemarketing practices.

3. Telephone Disclosure and Dispute Resolution Act of 1992

The Telephone Disclosure and Dispute Resolution Act of 1992 requires FTC to promulgate regulations concerning advertising for, operation of, and billing and collection procedures for, pay-per-call or "900 number" telephone services. The regulations must include certain provisions, such as price disclosure requirements, mandatory warnings on services directed to children, and required disclosures in billing statements. The Act also directs FTC to promulgate a regulation extending to pay-per-call services the billing dispute provisions of the Fair Credit Billing Act, 15 U.S.C. Section 1666 et seq.

4. Do-Not-Call Registry Act of 2003

The Do-Not-Call Registry Act of 2003 authorized FTC under section 3(a)(3)(A) of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. Section 6102(a)(3)(A), to implement and enforce a do-not-call registry. The Act also ratified the do-not-call registry provision of FTC's Telemarketing Sales Rule, 16 C.F.R. 310.4(b)(1)(iii), which became effective on March 31, 2003.

5. Do-Not-Call Implementation Act

The Do-Not-Call Implementation Act authorizes FTC to collect fees to implement and enforce a do-not-call registry. The Act allows fees to be collected for fiscal years 2003 through 2007. The Act further requires the Federal Communications Commission (FCC) to issue a compatible do-not-call registry rule and directs FTC and FCC to submit an annual report on the registry to the House Committee on Energy and Commerce and the Senate Committee on Commerce, Science, and Transportation for fiscal years 2003 through 2007.

6. Federal Cigarette Labeling and Advertising Act of 1966

The Federal Cigarette Labeling and Advertising Act of 1966 requires FTC to submit annual reports to Congress as to:

• (a) the effectiveness of cigarette labeling,
• (b) current practices and methods of cigarette advertising and promotion, and
• (c) recommendations for legislation.

The statute was amended by the Comprehensive Smoking Education Act of 1986 (Pub. L. No. 98-474, 98 Stat. 2200), which establishes the text of four health-related warning labels and requires that cigarette packages and advertisements carry these warnings on a rotating basis.

7. Comprehensive Smokeless Tobacco Health Education Act of 1986

The Comprehensive Smokeless Tobacco Health Education Act of 1986:

• Requires manufacturers, packagers, and importers of smokeless tobacco products to place one of three statutorily prescribed health warning labels on product packages and in advertisements,
• Bars advertising of smokeless tobacco products on radio and TV.
• Directs FTC to require that the label warnings be displayed on a rotating basis, and that they be placed conspicuously on smokeless tobacco packages and in advertisements.

8. CAN-SPAM Act

The CAN-SPAM Act establishes requirements for those who send unsolicited commercial email. The Act bans false or misleading header information and prohibits deceptive subject lines. It also requires that unsolicited commercial email provide recipients with a method for opting out of receiving such email and must be identified as an advertisement. In addition to enforcing the statute, FTC must issue rules involving the required labeling of sexually explicit commercial email and the criteria for determining the primary purpose of a commercial email. The Act also instructs FTC to report to Congress on the feasibility of a National Do-Not-E-Mail Registry, as well as requiring reports on the labeling of all unsolicited commercial email, the creation of a "bounty system" to promote enforcement of the law, and the effectiveness and enforcement of the statute.

9. Wool Products Labeling Act

Under the Wool Products Labeling Act, the manufacture, introduction, sale, transportation, distribution, or importation of misbranded wool is a violation of the FTC Act. The Act was amended, by the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, Section 301-307, 98 Stat. 1585, 1603, to require that:

1. wool product labels indicate the country in which the product was processed or manufactured, and
2. mail order promotional materials clearly and conspicuously state whether a wool product was processed or manufactured in the United States or was imported.

10. Textile Fiber Products Identification Act

The Textile Fiber Products Identification Act deals with mandatory content disclosure in the labeling, invoicing, and advertising of textile fiber products. Under the Act, misbranding is unlawful, as is falsely or deceptively invoicing or advertising textile fiber products. The Act also directs the Commission to establish a generic name for each man-made fiber that does not as yet have such a name.

The statute was amended by the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. No. 98-417) to require (1) that any textile fiber product processed or manufactured in the United States be so identified, and (2) that mail order promotional materials clearly and conspicuously indicate whether a textile fiber product was processed or manufactured in the United States or was imported.

11. Fair Packaging and Labeling Act

The Fair Packaging and Labeling Act directs FTC to issue regulations requiring that all consumer commodities other than food, drugs, therapeutic devices, and cosmetics be labeled to disclose net contents, identity of commodity, and name and place of business of the product's manufacturer, packer, or distributor. The Act authorizes additional regulations where necessary to prevent consumer deception (or to facilitate value comparisons) with respect to descriptions of ingredients, slack fill of packages, use of "cents-off" or lower price labeling, or characterization of package sizes.

12. Fur Products Labeling Act

The Fur Products Labeling Act requires that articles of apparel made of fur be labeled, and that invoices and advertising for furs and fur products specify, among other things, the true English name of the animal from which the fur was taken, and whether the fur is dyed or used. The Act also requires FTC to issue a Fur Product Name Guide.

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*John Lichtenberger is the Publisher of Advertising Compliance Service, a vital advertising law reference service since 1981 for attorneys and advertisers.