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Truth vs. Deception in Advertising

Truth vs. Deception in Advertising

Federal Trade Commission, SalesHQ

Making a Claim

When can a company advertise something as “free”?

When a “free” offer is tied to the purchase of another product, the price of the purchased product should not be increased from its regular price. For more information, ask the FTC for the Guides Concerning Use of the Word “Free” and Other Representations and the Guides Against Deceptive Pricing. In addition, if you’re advertising a product as “free” or offering it at a low cost in conjunction with the purchase of another item, the ad should clearly and conspicuously disclose the terms and conditions of the offer. Disclose the most important information – like the terms affecting the cost of the offer – near the advertised price.


When can a company advertise a product as “new”?

The answer depends on how the ad uses the word “new.” For example, under the rules governing the identification of textiles, fabric cannot be advertised as “new” if it has been reclaimed or respun. The rules governing advertising claims for tires prohibit the use of the word “new” to describe retreads. However, when no specific regulation applies, each case must be considered within the context of the ad. At least one FTC advisory opinion has suggested a six-month limit on the use of the word when advertising the introduction of a “new” product not previously on the market.


When can my company advertise that our product is “Made in the U.S.A.”?

A product has to be “all or virtually all made in the United States” for it to be advertised or labeled as “Made in the U.S.A.” For more information, ask the FTC for the Enforcement Policy Statement on U.S. Origin Claims.


Are there rules for making energy savings claims in ads?


The FTC’s Appliance Labeling Rule and the R-Value Rule address energy savings claims for appliances, lighting products, and insulation. For example, under these rules, energy efficiency claims in ads must be based on specific standardized tests.


Are there rules for using environmental claims like “recycled” or “ozone-friendly”?

The FTC’s Guides for the Use of Environmental Claims cover how words like biodegradable, recyclable, and environmentally friendly can be used in ads. In addition, some states have laws governing environmental claims. Check with the Attorney General’s office of the state(s) where you plan to advertise.


What kind of health claims can be made in food ads? When can advertisers use words like “lite,” “low fat” or “high fiber”?

The FTC handles most matters regarding claims in food advertisements. The FDA handles most matters regarding food labels. For guidance on how the FTC evaluates claims made in food ads, ask the FTC for the Enforcement Policy Statement on Food Advertising.


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