Advertising Compliance Service
Ten Tactics to Use So Your Ads Comply with Advertising Laws
This article examines 10 significant steps that you should take to make sure your ads comply with advertising law. Reason: You can avoid many unexpected problems later by taking these steps upfront - before your advertising campaign is launched. And you should consult with an attorney who specializes in advertising law before launching any significant advertising campaign. This article is a useful review of 10 tactics you could use to help your ads comply with the many laws, rules, regulations and guidelines that may affect your ads.
1. Be Sure that You Can Substantiate (i.e., "Back Up") Your Advertising Claims
You're ready to publish your ads. Can you back up the claims you've made? Before you disseminate your ads, you should be aware of the underlying legal requirement of advertising substantiation. What this means is that you must have a reasonable basis for your advertising claims before you publish your advertisements.
TIP: Familiarize yourself with the FTC Policy Statement Regarding Advertising Substantiation. It may seem like a tough read, but it's worth it.
2. Be Certain that Your Advertising Claims Are Not Deceptive
When you review your advertising copy, you should ask yourself these two questions:
- Is your advertising claim likely to mislead consumers acting reasonably under the circumstances?
- Is your advertising claim material, that is, likely to affect consumers' conduct or decisions as to the product you're advertising?
If the answers to both of these questions is yes, then you had better change your advertising claim. In fact, if the answer to Number one is yes, then you had better change your advertising claim. If you have any doubt whatsoever, you should consult with a legal professional. And be sure to review Section 5 of the FTC Act.
3. Comparative Advertising - Be Wary
In 1979, the Federal Trade Commission (FTC) issued its "Statement of Policy Regarding Comparative Advertising." This Policy Statement spelled out FTC's position that "industry self-regulation should not restrain the use by advertisers of truthful comparative advertising." Nevertheless, be very wary about using comparative advertising. Your competitor may not be too happy about your ad. And your competitor's attorneys will carefully scrutinize your ad copy for any and all advertising law mistakes.
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4. Avoiding Unfairness in Your Ads
A good starting point to learn about whether your advertising claims might be considered "unfair", is an FTC document entitled, "FTC Policy Statement on Unfairness".
You should be aware that in August 1994, Congress amended Section 5 of the Federal Trade Commission Act to provide that an act or practice is unfair if the injury it causes or is likely to cause to consumers is:
- not outweighed by countervailing benefits to consumers or to competition; and
- not reasonably avoidable by consumers themselves
Again, whatever you don't understand relative to any potential "unfairness" that may be caused by your advertising claims, should be discussed with a legal professional.
5. Guide Concerning Use of Word Free in Advertising
Do you plan on using the word, "free" -- or similar words -- in your advertisement? If so, you should study the FTC publication entitled, "FTC Guide Concerning Use of Word "Free" and Similar Representations". The Guide cites several examples of the language often used in these offers:
- "Buy 1-Get 1 Free",
- "2-for-1 Sale",
- "50% off with purchase of Two",
As this Guide points out, you should be aware that these "free" offers "must be made with extreme care so as to avoid any possibility that consumers will be misled or deceived."
6. Advertising Disclosures
Are you required to make certain disclosures in your ads? Advertising disclosures are required in many contexts. For example, the FTC publication concerning advertising disclosures is called, FTC's Facts for Businesses: "Big Print. Little Print. What's the Deal?" This publication is targeted at computer sellers. It says that computer sellers - online and brick-and-mortar - "inundate consumers with advertisements for `free' or low-cost computers. The offers usually involve rebates of several hundred dollars off the computer's purchase price - if the consumer commits to a long-term contract for Internet service. Some of the offers may be good deals for consumers, but they are likely to involve complicated transactions."
This FTC publication notes that rebate promotions should clearly detail any additional terms and conditions that consumers need to know, like:
- Penalties or fees for canceling the Internet service contract early. Some rebate offers require consumers to pay back all or a portion of the rebate; others tack on an additional fee.
- Additional connection charges to access the Internet service. For example, consumers should be told that to access the Internet they may have to pay long distance phone charges, or expensive hourly surcharges for use of an 800, 888 or 877 phone number. This charge is in addition to the basic monthly Internet service fee. Consumers also should be told how to find out if local Internet access is available.
- How long before they will receive the rebate.
7. Advertising and Marketing on the Internet
There is a lot you need to know before you advertise on the Internet. A very useful pamphlet, Advertising and Marketing on the Internet: Rules of the Road, is a useful tool if you plan to do so. As FTC notes in this pamphlet, "many of the same rules that apply to other forms of advertising apply to electronic marketing. These rules and guidelines protect businesses and consumers - and help maintain the credibility of the Internet as an advertising medium." FTC prepared this guide to give advertisers and marketers an overview of some of the laws it enforces.
8. Use of Endorsements and Testimonials in Advertising
Do you plan to use endorsements and/or testimonials in your ads? If so, then you should carefully study the FTC Guides Concerning Use of Endorsements and Testimonials in Advertising as an important first step if you plan to use testimonials or endorsements in your advertising. These Guides covers these topics, among others:
- Expert endorsements.
- Consumer endorsements.
- Endorsements by organizations.
- Disclosure of material connections
There is a long list of requirements that you must comply with if you need to use telemarketing for your product -- far too many to cover adequately in an article of this length. A good starting point is the Telemarketing and Consumer Fraud and Abuse Prevention Act. This Act requires FTC to promulgate regulations:
- defining and prohibiting deceptive telemarketing acts or practices;
- prohibiting telemarketers from engaging in a pattern of unsolicited telephone calls that a reasonable consumer would consider coercive or an invasion of privacy;
- restricting the hours of the day and night when unsolicited telephone calls may be made to consumers; and
- 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.
10. Unsolicited Commercial Email
You should be aware that the CAN-SPAM Act establishes requirements for those who send unsolicited commercial email (UCE). Among other things, the Act--
- bans false or misleading header information;
- bars deceptive subject lines;
- requires that UCE provide recipients with a method for opting out of receiving such email;
- requires that UCE must be identified as an advertisement.
You should carefully study your duties under this Act if you plan to send UCE.
*John Lichtenberger is the Publisher of Advertising Compliance Service, a vital advertising law reference service since 1981 for attorneys and advertisers.
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