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Truth vs. Deception in Advertising

Truth vs. Deception in Advertising

Federal Trade Commission, SalesHQ

How the FTC Defines Deception

The FTC takes the following steps when looking at deception:

Evaluating the ad from the point of view of the “reasonable consumer” – the typical person looking at the ad. Rather than focusing on certain words, the FTC looks at the ad in context – words, phrases, and pictures – to determine what it conveys to consumers.

Looking at both “express” and “implied” claims. An express claim is literally made in the ad. For example, “ABC Mouthwash prevents colds” is an express claim that the product will prevent colds.

An implied claim is one made indirectly or by inference. ABC Mouthwash kills the germs that cause colds” contains an implied claim that the product will prevent colds.

Although the ad doesn’t literally say that the product prevents colds, it would be reasonable for a consumer to conclude from the statement “kills the germs that cause colds” that the product will prevent colds. Under the law, advertisers must have proof to back up express and implied claims that consumers take from an ad.

Examining what the ad does not say – that is, if the failure to include information leaves consumers with a misimpression about the product. For example, if a company advertised a collection of books, the ad would be deceptive if it did not disclose that consumers actually would receive abridged versions of the books.

Determining whether the claim would be “material” - that is, important to a consumer’s decision to buy or use the product. Examples of material claims are representations about a product’s performance, features, safety, price, or effectiveness.

Deciding whether the advertiser has sufficient evidence to support the claims in the ad. The law requires that advertisers have proof before the ad runs.

What is “bait and switch” advertising?

It’s illegal to advertise a product when the company has no intention of selling that item, but instead plans to sell a consumer something else, usually at a higher price.

What kind of advertising claims does the FTC focus on?

The FTC pays closest attention to:

1. Ads that make claims about health or safety, such as:

ABC Sunscreen will reduce the risk of skin cancer.

ABC Water Filters remove harmful chemicals from tap water.

ABC Chainsaw’s safety latch reduces the risk of injury.

Ads that make claims that consumers would have trouble evaluating for themselves, such as:

ABC Refrigerators will reduce your energy costs by 25%.

ABC Gasoline decreases engine wear.

ABC Hairspray is safe for the ozone.

Ads that make subjective claims or claims that consumers can judge for themselves (for example, “ABC Cola tastes great”) receive less attention from the FTC.

Is Internet advertising subject to the same laws?

Yes. Ad claims on the Internet must be truthful and substantiated. Ask the FTC for a copy of Advertising and Marketing on the Internet: The Rules of the Road for more information. Dot Com Disclosures offers special guidance for online advertisers regarding how to make sure that any disclaimers and disclosures in online ads are clear and conspicuous. It addresses ‘Net specific issues such as privacy, banner ads, pop-up windows, scrolling, hyperlinks, etc. Internet marketers also should be aware that the FTC’s Mail or Telephone Order Merchandise Rule (“Mail Order Rule”) applies to online transactions.

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