ch44

West's Business Law with Online Research Guide, 9th Edition

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DECEPTIVE ADVERTISING Deceptive Advertising: Advertising that misleads consumers, either by making unjustified claims regarding a product’s composition, qualities, sponsorship, or performance or by omitting a material fact concerning the product’s composition, qualities, sponsorship, or performance. False Statements of Fact: Advertising that appears to be based on facts that are, in fact, scientifically untrue, is deceptive. Vague generalities or obvious exaggerations collectively called puffery – are not deceptive. Bait-and-Switch Advertising: Advertising one product (the “bait”) at a very attractive price, then informing the customer that the advertised product is either unavailable or of poor quality, convincing the customer to purchase a different, more expensive product. Online Deceptive Advertising: The Federal Trade Commission (FTC) has issued guidelines requiring that online advertising must (1) be truthful and not misleading, (2) not cause or be likely to cause Ch. 44: Consumer Law - No. 1 West’s Business Law (9th ed.)
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substantial consumer injury that consumers cannot reasonably avoid, and (3) not make any claims that cannot be substantiated. Ch. 44: Consumer Law - No. 2 West’s Business Law (9th ed.)
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If, after investigating, the FTC staff determines that an advertisement is unfair or deceptive, it will send a formal complaint to the advertiser. If the advertiser refuses to settle the complaint, the FTC can conduct an administrative hearing. If the staff proves its case, the FTC may issue a cease-and-desist order , requiring the advertiser to stop the unfair or deceptive advertisement, impose a multiple product order , requiring the advertiser to cease and desist from falsely advertising all of the firm’s products or services, and require the advertiser to counteradvertise ( i.e. , retract and correct its prior unfair or deceptive advertisement). Ch. 44: Consumer Law - No. 3
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ch44 - DECEPTIVE ADVERTISING Deceptive Advertising...

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