State Laws and Private Guidelines Relating to Advertising Practices

I’ve been discussing federal laws and regulations pertaining to advertising practices; however, advertisers must also be mindful of the fact that every state has laws and regulations that prohibit false advertising.  In general, state laws are based on the Uniform Unfair Trade Practices Act and/or the Uniform Deceptive Trade Practices Act and follow the enforcement mandate of the Federal Trade Commission of identifying and prohibiting "unfair and deceptive" acts.  In addition, states are concerned about passing off; misrepresentations relating to the source origin, quality or newness of a particular product; “bait and switch”; disparagement; and false and misleading comparisons of price and feature of competing products.  State laws are enforced by the 50 state attorneys general and those departments typically have separate departments that focus primarily or exclusively on enforcement and interpretation of state laws relating to consumer protection.  A complete survey of state advertising laws is available for purchase through the Retail Industry Leaders Association.

Advertisers should also keep abreast of private advertising and marketing guidelines.  For example, a comprehensive code of advertising is available for use and instruction through the Council of Better Business Bureaus (BBB), a nonprofit industry group.  The BBB code focuses on comparative price advertising accuracy and also deals with other common issues such as “bait and switch”, warranties, illustrations, refurbished product, comparative and superlative claims, testimonials and endorsements, and unassembled merchandise. The BBB Web site is also a good resource for information on advertising to children and online marketing.  Online marketing is also addressed in guidelines that have been issued by the Electronic Retailing Association (ERA), which call for truthful advertising that is not misleading and clear and conspicuous disclosures of qualifications to claims made in online advertisements.  The ERA guidelines also address substantiation of claims, testimonials and endorsements, disclosure of costs and other material terms relating to products purchased online, warranties, order fulfillment procedures and protection of personal information (i.e., “privacy”).

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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