Posted by Anonymous
Marketing a product or service would be simple if we all had free reign to say whatever we want, to whoever we want in hopes of making something look appealing and turning a profit. Unfortunately, things are not so simple and as members of society we are all bound by rules and regulations that are meant to protect the consumer. At the end of the day we are all consumers of something, so these laws are ultimately protecting ourselves and thus should be abided by with ease and compliance. While it is always advised to speak with a lawyer regarding any legal matter, here is a quick overview of some marketing issues that may help to set your initial advertising plan in motion.
The Federal Trade Commission (FTC)
The FTC is the nation's consumer protection agency and is meant to eliminate and prevent harmfully anti-competitive business practices. Our economy depends on the buying and selling of products and the FTC helps to regulate this interaction by making the marketplace a comfortable and safe environment for consumers to obtain what they need. The FTC empowers consumers with free information to help them exercise their rights and spot and avoid fraud and deception. Without the FTC's rules and regulations and businesses' willingness to comply, the marketplace would be a treacherous environment and our economy would suffer greatly from lack of stimulation.
The FTC and Advertising
The United States of America has a set of laws known as the truth-in-advertising laws which require advertisers to be truthful about their products and to be able to substantiate their claims. Under the Federal Trade Commission Act:
Advertising must be non-deceptive: it cannot mislead consumers acting reasonably under the circumstances; it cannot omit information that would be considered important in a consumer's decision to buy or use the product.
Advertisers must have evidence to back up their claims: mostly applies to health or safety claims that need scientific proof obtained in a test, study or experiment.
Advertisements must be fair: it cannot cause injury which a consumer could not reasonably avoid; and it cannot be overshadowed by the benefits to consumers.
"Red Flag" Advertising Claims
There are certain claims an advertiser can make that will draw extra attention from the FTC. Although these claims may only apply to some products or services, you should familiarize yourself in order to avoid unwanted scrutiny.
Advertisements that make claims about health or safety: Running a false or deceptive ad which deals with health or safety can be physically harmful to a consumer, which is why the FTC focuses on such claims. An advertising violation that results in the infliction of harm on a consumer would be penalized by cease and desist orders, monetary remedies and/or corrective advertising, disclosures and other informational remedies.
Advertisements that make claims that consumers would have trouble evaluating for themselves: As part of the FTC's role in consumer protection, it is their job to test claims that otherwise consumers would realistically have no way of proving.
To avoid scrutiny and resulting penalties from the FTC it is best to have hard evidence to support them or simply avoid them all together.
The FTC and Small Businesses
Not only does the FTC help guide businesses to make responsible advertising decisions, it also helps protect aspiring entrepreneurs from fraudulent ads aimed at naïve start-up companies. One of the FTC's top law enforcement priorities is the surveillance of the internet and other distribution pathways to help stop bogus scams that might otherwise infiltrate and devastate a new small business. Being aware of your own restrictions in advertising might even help you to recognize a potential scam - if it seems too good to be true, it probably is.
The FTC and Advertising Agencies
If you have the means to hire an agency to help you with your advertising campaign it could serve to be beneficial. While these agencies are subject to the same FTC rules and regulations as everyone else, they have experience in dealing with common issues that arise and could offer a different perspective on how to approach your advertising strategy. Again, it cannot be stressed enough that even advertising agencies may not be fully aware of all legal matters and a lawyer is always your best source of information to help you comply with the law.