Unformatted text preview: April 19, 2005 April Chapel Hill, North Carolina TRUTH IN ADVERTISING: THE STARTING LINE FOR THE MARKETERS MARKETERS
Lesley Fair Federal Trade Commission SECTION 5 OF THE F deceptive “Unfair or TC ACT acts or
practices in or affecting commerce are hereby declared unlawful.” SAME STANDARDS APPLY TO ALL PRODUCTS SAME STANDARDS APPLY IN ALL MEDIA Advertiser: STRICT LIABILITY Advertiser: STRICT Ad agency Individual corporate officers Endorsers WHO MAY BE HELD LIABLE FOR DECEPTIVE CLAIMS? CLAIMS? Infomercial producers, shopping Infomercial channels, catalogs, and others with a role in the promotion of the product role Cease and desist orders POSSIBLE CONSEQUENCES OF DECEPTIVE ADVERTISING? ADVERTISING? Full refunds for consumers Full (“redress”) (“redress”) Bans and bonds Informational remedies, such as Informational disclosures in future ads or corrective advertising corrective CAN THE FTC GET MONEY BACK FOR CONSUMERS? $505 WARNING: This product contains steroid hormones that may cause breast enlargement, testicle shrinkage, and infertility in males, and increased facial and body hair, voice deepening, and clitoral enlargement in females. Higher doses may increase these risks. If you are at risk for prostate or breast cancer, you should not use this Met-Rx and AST (consents) product. HEN IS AN AD DECEPTIVE? HEN If it contains a representation or If omission of information omission that would likely mislead that consumers acting reasonably under the circumstances the that would be material to them.
FTC Deception Policy Statement, appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984) TWO QUESTIONS ADVERTISERS MUST ASK THEMSELVES THEMSELVES
FIRST: What claims – express and and implied – does the advertisement convey to reasonable consumers? convey SECOND: Does the marketer have “competent and reliable scientific evidence” to support those claims? evidence” Determine all claims – express and implied Determine and – that ad conveys to consumers. that Literal truthfulness is not a defense if the Literal ad is nonetheless deceptive to consumers. ad Remember that an ad may be deceptive by Remember omission. omission. If necessary, qualify your ad claims. If disclosures are necessary, they must be If “clear and conspicuous.” “clear AD CLAIMS AD CHECKLIST CHECKLIST CLAIMS – EXPRESS AND IMPLIED
If you don’t believe that something lite can taste delicious, then try new Klondike Lite. It’s 93% fat-free. Isaly Klondike (consent) CLAIMS – EXPRESS AND IMPLIED
*A 1994 Contemporary Pediatrics Recommendation Study found that 88% of pediatricians who recommend baby food recommend Gerber. Gerber (consent) CLAIMS – EXPRESS AND IMPLIED Black & Decker (consent) CLAIMS – EXPRESS AND IMPLIED Volvo (consent) LITERAL TRUTHFULNESS IS NOT A DEFENSE Of all the things we pack into our 34 Lean Cuisine entrees – the freshest ingredients, the ripest vegetables and perfect blend of herbs and spices – there are some things we skimp on: Calories. Fat. Sodium. Withentrees have been less than 300 * All Lean Cuisine calories, controlled fat and always1 gram less reformulated to contain less than t(1000 mg) ofof sodium* per entree, we han 1 gram sodium. make good sense taste great. Stouffer DECEPTION BY OMISSION Is your tap water as clean as it seems? It could contain impurities. The Norelco Clean Water Machine can remove up to 90% of chlorine, organic wastes, and trihalomethanes. Norelco (consent) UALIFY YOUR AD CLAIMS
Starting now, Juno is offering full Internet access for free. From free Web access to premium dial-up and broadband services, everybody’s getting it. Juno (consent) DISCLOSURES
If the disclosure of information is necessary to prevent an ad from being deceptive, then the disclosure must be: must CLEAR AND CLEAR CONSPICUOUS CONSPICUOUS $100 $200 $300 $400 $500
Mazda Gatew Mitsubis Dell hi ay Stouff GM er Micron Palm Hewlet VW t Packar d AOL Prodig y Microso WebT ft V Isuzu Office Depot Haage n Dazs Juno Bayer Compu Serve What companies has the FTC successfully sued in recent years for deceptive fine-print disclosures? disclosures? DISCLOSURES Honda (consent) LEAR AND CONSPICUOUS LEAR PROMINENCE: Is it big enough for consumers to notice and read? PRESENTATION: Is wording and format easy for consumers to understand? PLACEMENT: Is it where consumers will look? PROXIMITY: Is it close to the claim it LEAR AND CONSPICUOUS LEAR LEAR AND CONSPICUOUS NO MOUSEPRINT NO SECTION 5 OF THE F deceptive “Unfair or TC ACT acts or
practices in or affecting commerce are hereby declared unlawful.” WHEN IS AN AD OR WHEN PRACTICE UNFAIR? PRACTICE If it causes or is likely to cause If substantial consumer injury that is not reasonably avoidable that by consumers themselves by and is not outweighed by and countervailing benefits to consumers or competition. consumers
15 U.S.C. § 45(n); see also FTC Unfairness Statement, appended to International Harvester Co,, 104 F.T.C. 949, 1070 (1984) Flatten your stomach in Just Minutes a Day! Amazing Gut Buster turns ordinary sit-ups into tummy tightening power stretches. Consumer Direct (consent order) UIDANCE AND EDUCATION UIDANCE With FatFoe Eggplant Extract, you can kiss your dieting days goodbye. Feast on your favorite foods and lose up to two pounds a day. Take this quiz and find out if FatFoe is right for your unique metabolism. Take two capsules before each meal. The safe, allnatural active ingredient in FatFoe, auberginium, binds with food to block the absorption of fat, carbs, AND calories. Lose up to 10 pounds per week – with no sweat, no starvation! FatFoe is not a real weight loss product. The ad to which you responded is a fake, posted by the FTC to warn consumers about diet rip-offs. April 19, 2005 April Chapel Hill, North Carolina TRUTH IN ADVERTISING: THE STARTING LINE FOR THE MARKETERS MARKETERS
Lesley Fair Federal Trade Commission ...
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