A Guide for
Fraudulent claims can show up in ads for a wide variety of
products and services. Most use similar terms and techniques to entice a reader, listener,
or viewer to respond favorably to an ad. This publication includes general tips on how to
screen ads effectively and particular tip-offs - "buzz words" or techniques - to
help you identify some of the most common types of deceptions that are found in ads for get-rich-quick
schemes, weight loss fraud, health fraud, credit repair and loan scams, travel fraud
and product misrepresentations. By learning to spot the
tell-tale signs of fraudulent advertising, you can protect your customers, your bottom
line, your reputation, and the good name of your legitimate advertisers.
One evaluation standard applies to all ads: Does the offer, promotion,
payoff, or benefit sound too good to be true? If you use this standard, and if you
exercise caution when you spot some of the buzz words and techniques revealed in this
booklet, there's a good chance that you'll be able to spot a questionable ad or promotion
with just a quick look, and an even better chance that you'll be able to stop it before it
gets into print, on the air, or in the mail to your customers.
All Purpose Advertising Screening Tips
If an advertiser refuses to answer your questions or to
make changes in the ad, it may be a tip-off to a deception. You have the right to reject
an ad for any reason.
Trust your gut: experience sharpens intuition. If you
have a feeling that you should check out an ad, do it. Don't let it slip by.
Don't let your guard down around deadline time.
Fraudulent advertisers know when you're at your busiest and may try to slip one past you
at the last minute.
Ask to see a sample of the merchandise if the ad is
even slightly suspicious. Legitimate advertisers usually welcome the opportunity to show
you their products. Get a production sample, not a handmade mockup. If the advertiser
cannot submit the sample before the closing date, pass up the ad until the next closing
If an ad is unclear to you, it will be unclear to your readers,
listeners or viewers. If you don't know the nature of the product or service
offered, ask the advertiser for clarification. Your request for information may deter some
unscrupulous advertisers and may help legitimate businesses clarify any unintended
vagaries before an ad is disseminated to their customers (and yours).
Is the copy outlandish? Are the claims too good to be
true? Perhaps the advertiser's creative team needs a refresher on the "rules of the
Verify the integrity, stability, and performance of new
advertisers, especially when they make an unusually large media buy. Scam artists are in
it for the short term. Once they've made a quick buck, they often skip town, leaving
dissatisfied customers and unpaid bills in their wake. So check out the credit. Check out
Check out the fine print. Dense blocks of tiny text and
fleeting TV supers aren't just annoying - they may be illegal. The law requires
disclosures and disclaimers to be "clear and conspicuous." That means big enough
for consumers to read and understand.
Watch out for the asterisks and footnotes. A disclosure
at the bottom of a page won't cure an otherwise deceptive ad.
Ads with glowing consumer testimonials, whether they
deal with dramatic weight loss, disease cures, or extravagant financial success, can
sometimes be a tip-off to deception. This can be true for before-and-after photos, too.
Under truth-in-advertising laws, advertisers must have proof that consumers who use the
product at home will get the same results as the endorsers featured in the ad or they must
clearly disclose the results consumers will get. When you see a testimonial, ask the
advertiser for proof that consumers generally will achieve the level of success described
or depicted. A fine-print disclosure that "Your results may vary" isn't enough.
Get the street address and telephone number of every
advertiser. In many cities - New York, for example - a post office box number must be
accompanied by a street address. If the company is small, get the home address and
telephone number of the principal.
Check out street addresses. Knowing that a post office
box may arouse suspicion, some unscrupulous advertisers may use the street address of a
private mail receiving company as their own. Keep a list of the street addresses of the
private post offices in your area. Ask any advertiser who offers an address that is a
private post office location to provide the company's actual street address and phone
Be careful of advertisements without an address that
require consumers to use a toll-free number and credit card to order merchandise. This
method of payment may be an attempt to avoid using the mail as a way around the
jurisdiction of the Postal Service.
Watch out for ads that use international telephone numbers.
Some international numbers look like domestic numbers. For example, dialing
"809" and a seven digit number reaches the Dominican Republic. Because each
country sets its own telephone rates and may have substantially higher rates than in the
U.S., consumers may unknowingly end up with hefty phone bills. Keep a list of U.S. area
codes handy or look up unfamiliar codes in the phone book to check whether a number is
domestic or international. Make sure that all ads for international calls clearly state
that international long distance rates apply, even though the calls look like domestic
numbers. Don't accept cryptic and possibly misleading disclosures like "LD rates
apply" or "toll line."
Be leery of ads that suggest or imply product endorsement,
approval or testing by a government agency or other nationally known firm or
organization. This technique often is used to lend credibility to fraudulent operations.
Most government agencies do not approve or endorse specific products. And in some cases,
it's a crime to suggest a government affiliation or misuse an official symbol. Question
- use graphics that copy the look of an official government notice or announcement.
Sometimes these ads depict the Statue of Liberty, eagles, official-looking seals, or other
- use an official-sounding name (like Commission, Society, or Institute)
or a name that sounds or looks like a well-known national firm or organization.
Be wary of an advertiser who pays you with a bounced check.
Even if they come up with the cash later, it may signal a disregard for ethical business
practices. At the same time, just because the check clears doesn't mean the company is
legit. Your reputable advertisers, as well as your subscribers or viewers, are counting on
you to say no to the scam artists - even the ones smart enough to pay their media costs
The Better Business Bureau where the company is based might be able to
alert you to consumer complaints. Steer clear of companies that have already racked up a
list of dissatisfied customers.
Some credit groups and other organizations issue up-to-the-minute alerts
about scam artists and advertisers that aren't creditworthy. Media that subscribe to these
services also can call to check on complaints about a particular company.
Deceptive investment, business opportunity or employment ads capitalize on
consumers' financial needs, naivete, and optimism - and their widespread fantasies of
hitting the jackpot. The level of risk usually is proportional to the size of the return.
Any representation of high earnings with little or no risk, skills, or training is likely
to be false and misleading. In short, in the world of investments, there's no such thing
as a sure thing.
The Buzz Words
Anybody Can Do it
Quick and Easy
Big, Fast Profits
No Experience Needed
Work in the Comfort of Your Home
Work in Your Spare Time
Make Big Money Working as Your Own Boss
You Purchase at Wholesale, Then Resell at a Huge Profit
Get in on the Ground Floor of this New Technology
Learn the Secret the 'Big Boys' Don't Want You to Know
Types of Scams
Many business opportunites and investments - including some listed below - can be
legitimate. But scam artists have been known to operate in these areas:
- Work-at-home promotions
- Display rack or vending machine businesses
- Invention promotion
- Art, coins, stamps, or other "collectibles"
- Prize promotions
- Services offering scholarships, grants, or student loans
- Gold, silver, platinum, and "strategic metals"
- Recovery room operations - firms that claim they will recover investments or money lost
in earlier scams
- "Government products" - auctions featuring cars or real estate at
"bargain" prices and services that claim to have the "inside scoop" on
government jobs, government contracts, or small business loans.
Techniques to Watch Out For:
- Ads that tout seminars promising "no money down" real estate investments, the
"secrets" of day trading, or other "systems" for quick and easy
- Graphic depictions of fists full of dollars, mansions, yachts, or other trappings of
"the good life." The bolder the picture or claim, the less legitimate the ad is
likely to be. Just how did some of these advertisers make their fortunes? You guessed it:
Selling phony get-rich-quick schemes to unsuspecting consumers.
- Employment ads that offer the "inside track" on government jobs, promise
salaries of "up to" thousands of dollars per month, or guarantee high-paying
careers in "glamour" industries like cruise lines, modeling, or international
- Consumer testimonials detailing fabulous success stories. This kind of advertising
implies that the experience is typical for consumers using the product or service. When
you see a testimonial, ask to see the advertiser's proof that consumers in general will
achieve the level of success described or depicted in the ad. For every success story, how
many others lost their life savings?
- Ads that focus on doomsday warnings about the predicted "collapse" of the
economy and promise financial security in gold, silver, or "strategic metals."
- Ads for coins, stamps, art or collectibles that promise overnight profits and offer
unlimited buy-backs and unconditional guarantees.
- Ads that promise big money from "no risk" investments in the Internet or other
"high tech" opportunities.
- Ads that promote distributorships or "exclusive territories" for name-brand
- Ads that promise financial freedom for restocking display racks in shopping malls or
Despite claims to the contrary, there are no magic bullets or effortless ways to
burn off fat. The only way to lose weight is to lower caloric intake and increase physical
activity. Claims for diet products or programs that promise weight loss without
sacrifice or effort are bogus. And some can even be dangerous.
These facts do not keep fraudulent advertisers from preying on consumers and reaping
billions of dollars each year. While the scams may vary (for example, pills, patches,
clips, body wraps, insoles or "diet teas"), the claims are almost always the
same - dramatic, effortless weight loss without diet or exercise.
The Buzz Words
No Diet! No Exercise!
Lose 30 Pounds in 30 Days
Eat Your Favorite Foods and Still Lose Weight
Shrinks Inches Off Your Stomach, Waist and Hips
Scientists Announce Incredible Discovery!
Revolutionary European Method! Ancient Chinese Secret!
Turn on Your Body's Fat Burning Process
Automatically Convert Fat to Lean Trim Muscle!
Developed After Years of Secret Research
New Scientific/Medical Breakthrough
Techniques to watch out for:
- Extravagant claims of dramatic, rapid weight loss.
- Testimonials from "famous" doctors, researchers or other medical experts.
- Dramatic before-and-after photos depicting substantial weight loss.
- Ads that tout the latest trendy ingredient in the headlines.
- A footnote hidden somewhere in an ad noting "diet and exercise required."
Remember: You can't cure an otherwise misleading ad with a buried "disclosure"
or a fleeting video super.
No product on the market can guarantee sexual prowess, erase
wrinkles, or cure cancer, Alzheimer's disease, arthritis, or AIDS and HIV infection. And
yet vulnerable consumers fall prey everyday to unscrupulous marketers who exploit their
fears and boost their hopes, all in the name of a fast buck. In addition to wasting their
money, these consumers may be wasting valuable time before they seek proper treatment.
Even worse, some products may cause serious harm and endanger lives.
That's why it's important to approach ads that tout treatments or cures for serious
conditions or diseases with particular caution. Ask to see an advertiser's support for
extravagant claims. By law, advertisers must have solid evidence for health claims BEFORE
they run an ad. And ask yourself this question: If a medical breakthrough has occurred,
would you be hearing about it for the first time from someone placing an advertisement?
The Buzz Words
New Scientific Or Medical Breakthrough
Tested All Over The World
Clinically Tested In Europe
Has Doctors/Researchers Astounded
Developed After Years Of Secret Research
Proven To Provide Immediate Results
Secret Cure The "Medical Establishment" Wants To Suppress
Techniques to Watch Out For:
- Ads for products that promise to treat baldness, relieve stress, cure impotence, improve
eyesight, slow the aging process, or offer other easy answers to difficult problems.
- Testimonials from "famous" medical experts.
- Case histories from "cured" consumers claiming amazing results. Such
testimonials also imply that their experience is typical for consumers using the product
or service. When you see a testimonial, ask for proof of its "typical" nature.
- Dramatic before-and-after photos.
- A laundry list of diseases or conditions the product cures or treats.
- Ads that tout the latest trendy ingredient in the headlines.
- Ads that make extravagant claims for doctors or minimize the risk of medical procedures.
- Ads that offer "natural" treatments for serious conditions like arthritis,
diabetes, cancer, heart disease, or HIV. Remember - "natural" doesn't
necessarily mean "safe and effective."
- Promotions for pills that promise to "cure" kids of hyperactivity, AD/HD, or
Credit Repair and Loan Scams
No one can legally remove accurate, current and verifiable
negative information from a credit report. In fact, the law does not allow credit repair
marketers to accept payment before they deliver their services. Yet, everyday, companies
throughout the country use advertisements to entice consumers with poor credit histories
to buy their "repair" services.
Some advertisers claim that by continually challenging essentially accurate
information, they can badger credit agencies to remove unfavorable information from a
consumer's credit report. They cannot. Other companies claim that they can create for
consumers a whole new credit file that doesn't contain their credit history. Typically,
they promise to beat the system by getting consumers an Employer Identification Number
from the IRS. This dodge doesn't work - and it's illegal.
Fraudulent advertisers also may prey on consumers or small businesses with credit problems through "advance fee" loan scams. These ads typically offer
"guaranteed" loans regardless of income or credit history. The catch? They
charge a hefty up-front fee to "process" the loan, but never come forward with
the cash. Legitimate lenders don't require up-front payments before extending credit and
they don't promise loans in their ads. So watch out for ads that offer fast money
without regard to credit or collateral.
The Buzz Words
Credit Problems? No Problem
We Can Erase Your Bad Credit - 100% Guaranteed
Create A New Credit Identity - Legally
We Can Remove Bankruptcies, Judgments, and
Liens From Your Credit File Forever
No Credit? No Income? No Problem!
$100 To $10,000 With Just Your Signature
Loans Guaranteed Regardless Of Poor Credit Or Low Income
Fraudulent travel ads usually offer exciting opportunities at
unrealistically low prices (Hawaii for $29.95!). But ads for these
"free" or bargain-priced vacations often fail to disclose expensive
"catches" or restrictions that may render the deals worthless.
Techniques to watch out for:
- A vacation offer accompanied by a certificate for free or very low cost travel.
- Vacations offered as part of a too-good-to-be-true prize promotion. That "luxury
speedboat" may turn out to be an inflatable raft.
- Travel packages that advertise "free" hotel accommodations with the purchase
of airline tickets. A careful look at the fine print may reveal that the offer is good
only with the purchase of expensive "full fare" tickets.
- Vague descriptions of services and accommodations.
- Memberships in "travel clubs" touting suspiciously low rates for airfare and
- In ads for timeshares or other vacation property, unrealistic claims about investment
potential or resale value. And watch out, too, for ads that include "artists's
renderings" of "planned facilities."
Product misrepresentations in ads can be difficult to detect. When in doubt, ask to see a product sample and evidence for the claim.
When you look at the sample, make sure it looks like the depiction in the ad and performs as stated or shown. When you ask for evidence for the claim, know that the law is
on your side. Broadcasters and publishers have the right to insist on modifications before
agreeing to run an ad or to turn down an ad altogether. Furthermore, the law requires
companies to have adequate support for the claims made in the ad before the ad is run,
so legitimate advertisers won't be surprised by your request to see some back-up
A list of agencies that may be able to help you evaluate the validity of advertising claims is on pages 19-20. Even though these agencies may not be able to tell you whether a particular company or product is under investigation, they may be able to share
information about previous cases or similar products or claims. Bear in mind that many
scam artists try to outrun the law by changing their corporate name or the brand name of a
bogus product. Just remember that snake oil is still snake oil - even when it's poured
into new bottles.
You may want to check out the websites of the agencies and consumer organizations listed at the back of this brochure. It's an easy way to keep yourself up-to-date on the latest scams.
Be wary when you see ads that:
- Advertise merchandise way below market value for a limited time only. This technique often is used to advertise electronics, computers, or other high-ticket merchandise that can be ordered only by phone.
- Feature merchandise with names that sound or look like nationally recognized brands.
- Offer vague descriptions of products.
- Tout name-brand merchandise at ridiculously low prices or through unusual avenues. For example, does it really make sense that a national retailer would promote its products at cut-rates in a three-line classified ad?
Complaints: How to Appraise
& Handle Them
Consumers often see the publication or station that carries
an ad as the messenger of the advertiser, espe-cially if they are dissatisfied with the
product or service. Angry or disappointed, they may cancel their subscription or tune to a
different station. The potential loss of goodwill may be reason enough to establish a
procedure for handling complaints.
If the complaint is nondelivery of merchandise caused by an honest miscalculation of the success of an offer, a strike, or a production mishap, a straightforward explanation from the advertiser usually is sufficient. Unfortunately, not all delivery problems stem from honest mistakes. Sometimes non-delivery issues indicate that the advertiser is in
financial trouble or has decided to "take the money and run."
If merchandise has been misrepresented, check your own screening procedures. Be aware that for every complaint you receive, more consumers have had similar unhappy experiences. When the number of complaints is out of proportion to the size of the ad or the size of the audience, contact the advertiser, advise your credit department, and inform your local Better Business Bureau or consumer protection agency.
In addition, contact your state consumer protection agency, your state attorney general, the Federal Trade Commission, or the Postal Inspection Service. Complaints from the public and media alert these agencies to a pattern of deception that may warrant further investigation. Their phone numbers are listed at the end of this brochure.
No publication or station wants to be an unwitting conduit
for deceptive claims. Likewise, list profes-sionals do not wish to unknowingly assist in
promoting misleading direct marketing promotions. The best defensive weapon in your
arsenal is your gut instinct that a particular ad promises more than it could possibly
deliver. Your company's own credit department, business office, or consumer reporter also
can be excellent sources. And www.consumer.gov puts a wealth of information at your
To check out the history, business practices, or general reputation of a firm submitting questionable advertising, contact:
The Better Business Bureau (in the advertiser's area)
State or local consumer agencies
Your state attorney general's office
Postal Inspector (in the advertiser's area)
Other organizations that may be able to help you evaluate the validity of an
advertising claim include:
Direct Marketing Association, Inc.
1111 19th Street, NW, Suite 1100
Washington, DC 20036-3603
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580