When you see or hear an advertisement on the internet, radio, magazine, television, or anywhere else, you expect it to be true. Therefore, when creating your next ad campaign, remember that your advertising message must be truthful and not misleading. You must be upfront and honest and provide consumers with the information needed to make informed decisions.
In the United States, the Federal Trade Commission (FTC) oversees truth-in-advertising laws. The FTC works for the consumer to protect consumers from businesses that want to trick or take advantage of them. In addition, each state in the United States also has their own set of laws concerning false and deceptive ads running in that state.
If you remember these three rules, your business should be safe from FTC compliance issues.
1. Advertising must be truthful and non-deceptive
2. Advertisers must have evidence to back up its claim
3. Advertisements cannot be unfair
What makes an advertisement deceptive?
An advertisement is deceptive if it contains a statement (or omits information) that:
• Is likely to mislead consumers acting reasonably under the circumstances
• Is material, which means it’s important to the consumer’s decision to buy
or use the product
Some common examples of deception include:
Hidden Fees and Surcharges
Misleading Health Claims
Bait and Switch
What makes an advertisement unfair?
An ad or business practice is unfair if:
• It’s likely to cause substantial consumer injury which a consumer could not
reasonably avoid; and
• It is not outweighed by the benefit to consumers
It would seem obvious that all statements that are made in advertising discussing the benefits, characteristics or performance of a product or service need to be truthful.
My best advice to small business owners is to always be truthful about the goods and services you advertise. You can’t afford to do otherwise.