Are You An FTC Target?

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Are You An FTC Target?

The Federal Trade Commission Act lays down the law to define what advertising can and cannot say.  Above all, ads must be truthful and non-deceptive.  Advertisers must have evidence to back up their claims.  And ads cannot be unfair.

Additional laws apply for some products and product categories, but you can take the first steps to stay off the FTC’s radar by making some common sense decisions to keep your claims on the right side of the law.

  1. Do not mislead consumers or provide information that would, reasonably, allow the wrong conclusion to be made.
  2. Do not omit “material” information that would impact a consumer’s decision to buy.

These are elements that trigger what the FTC considers deceptive advertising.  At the heart of these issues is how the FTC views claims, both “express” and “implied.”  Stating that “ABC Mouthwash prevents colds” is an express claim that the product will prevent colds.  Stating that “ABC Mouthwash kills the germs that cause colds” is an implied claim made by inference that would lead a consumer to conclude the product will prevent colds.  Under the law, advertising must have proof to back up any and all claims that consumers take from an ad.

Equally important is what is not said in an ad.  If an ad was selling Season One of Modern Family on DVD, but only included 20 of the 24 episodes, that omission could be judged to be deceptive, as the failure to make this disclosure could have reasonably impacted the consumer’s decision whether or not to make a purchase.

Another area that’s closely scrutinized – but is not black-and-white-clear on required action – is in the area of disclaimers.  These disclosures are used to prevent an ad from being deceptive and the FTC requires that this information be presented clearly and conspicuously so that consumers can actually notice and understand it.

Some of the disclaimers used in radio commercials, particularly those that are digitally-sped-up and run more than 10 seconds, walk a fine line for clarity.  Beyond “speed,” content is of equal or greater concern.  If an ad for a diet product claims you can “Lose 10 pounds in one week” you cannot bury “diet and exercise required” in the disclaimer and hope to remedy the deceptive claim.

There’s no universal definition of exactly how (or how long) your disclaimers must be.  Some advertisers overprotect and mitigate the marketing appeal of their radio ad by undermining its credibility with long, drawn-out disclaimers.  Others stop short and make watered-down claims that fail to put the best product benefits front-and-center.

Download the FTC Guide for Small Business to make better-educated choices about what you can and cannot say without triggering government attention.  And keep every customer testimonial and claim documentation handy for the day you may need to back-up your representations.  A little preparation and a little common sense will keep you on the right side of the law and actively marketing on radio.

Mark Lipsky is the President and CEO of The Radio Agency. Please follow The Radio Agency’s Blog “Sounding Board” by subscribing to the email or RSS links above.Visit our website