Other FTC Regulation of Advertising Practices

While the Federal Trade Commission (“FTC”) focuses primarily on false advertising and advertisements that make claims relating to health and safety, there are numerous other specific FTC rules that apply to various types of advertising.  For example, the FTC has been very concerned about deceptive or unfair advertising practices with respect to advertisements for alcoholic beverages and such advertisements cannot by their content or placement be directed to underage consumers.  In addition, since the FTC believes that children may be more vulnerable to certain types of deception advertising the FTC pays particular attention to advertisements aimed primarily at children.  Mail or telephone order merchandisers—who solicit consumers to place orders by mail, telephone, fax, or computer—must adhere to the general standards of truth-in-advertising and must have a reasonable basis for believing that ordered products can be shipped within the time period specified in any advertisements (or within 30 days if no time period is specified in the advertisement.  The FTC also has rules and guidelines concerning the use of testimonials and endorsements from consumers, celebrities and experts in advertisements.  A non-exclusive list of other areas of concern, which are the subject of specific FTC rules and guidelines, includes:

  • "Bait and switch" advertising, which occurs when a company advertises a product that it has no intention of selling, but instead plans to sell a consumer something else, usually at a higher price;
  • Comparative advertising;
  • Advertising for consumer credit;
  • Advertising for dietary supplements, including claims for "health foods," vitamins, dietary supplements, and similar products;
  • Advertising jewelry, including gold, silver, platinum, pewter, diamonds, gemstones, and pearls;
  • Advertisements for over-the-counter drugs;
  • Energy savings claims for applicants, lighting products, and insulation;
  • Health claims in food advertising;
  • Advertising relating to leases for cars, household goods, or other products;
  • Tobacco advertising (i.e., advertisements for cigarettes, cigars, or smokeless tobacco products); and
  • Claims that products are “Made in the U.S.A.”.

Internet advertising is subject to the same laws and standards that apply offline.  The bottom line is that advertisers should carefully consult FTC rules and guidelines before launching any new campaign to ensure that they are in compliance.

The content in this post has been adapted from material that will appear in Business Transactions Solutions (February 2008) and is presented with permission of Thomson/West.  Copyright 2008 Thomson/West.  For more information or to order call 1-800-762-5272.

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