Truth in Advertising?

Keep your ads on the up-and-up by following the FTC rules.

Who hasn’t seen the ads with the sharp graphics and lab-coated physicians hawking miracle pills and potions for weight-loss and fat elimination? Just think about it: a svelte, sexy body in a bottle! Who cares that the fine print says that the FDA hasn’t tested this stuff? There is a doctor in a lab coat—and this guy looks like he can benchpress a Buick—saying that he uses it. The results speak for themselves, right?

If that was as far as these ads went, you would be looking at false advertisement in action. However, these companies manage to get around that with disclaimers. If you pay close attention to the area near the bottom of the screen you will see something like this: “In conjunction with diet and exercise.” True, the print is so tiny you need a magnifying glass to read it, but it is there: the kernel of truth beneath the hype. In other words, if you want to have a svelte, sexy body, the way to do it is through diet and exercise. The miracle pill might help burn some fat, but taking the pill without sweating in the gym and giving up the cheese fries won’t make you an overnight sensation.

This kind of marginal truth in advertising is a vivid example of an advertiser taking the truth of their ad right to the edge. Ads like that, while often effective, come with the legacy of the snake oil patent medicine shows of a century ago, which will do little to enhance your reputation on the local scene. Your ads are a very prominent part of your corporate voice in the community and need to be as trustworthy as they are loud.

What Constitutes Truth in Advertising?


The Federal Trade Commission (FTC) defines honest advertising as advertising that is truthful; non-deceptive and not unfair; and run by advertisers who have evidence to back up their claims. While it is true that ads for certain specialized products such as consumer leases, credit, 900 telephone numbers, and products sold by mail order or over the telephone come under additional regulation, these are the basics that every ad must meet. Over and above that, state consumer protection laws govern ads running within that specific state.

Recognizing Deceptive and Unfair Ads


The FTC defines the terms “deceptive” and “unfair” according to the actual material presented, the way it is presented, the way a reasonable consumer would likely act in response to the advertisement and the likely outcome of that response.

According to the FTC, an advertisement is deceptive if it contains a statement—or omits information—that is likely “to mislead consumers acting reasonably under the circumstances; and is material to the consumer’s decision to purchase or use the product or service.” In other words, if the lie in the ad is what gets people to buy the product, then that ad is deceptive.

The FTC holds that an advertisement or business practice is unfair “if it causes, or is likely to cause, substantial consumer injury which a consumer could not reasonably avoid; and this is not outweighed by the benefit to consumers.” So if the pros are greatly outweighed by the cons, the ad is unfair.

Supporting the Claim


Telling the truth is one thing, but having the evidence to back that truth up is something else. Going back to the example of the miracle weight loss pills, it’s clear just because someone took the pill, exercised, dieted and lost 50 pounds, it doesn’t mean that the pill did anything for them. It means that they took the pill and then worked hard at traditional means of weight loss—and that is all it means. To be able to support the claim, the advertiser would have to have clinical proof that the pill was a major contributor to the weight loss. Consider the following ad, a winner of the 2000 Ads Nauseam awards for dubious weight loss claims (consumer.gov/weightloss/adnauseam.htm):

“New Medical Breakthrough! Lose A Pound A Day Without Changing What You Eat ... You will get a risk-free opportunity to get the trim, sexy body you’ve always dreamed of in days or weeks, instead of months or years, without going through painful exercise and unbearable diets.”

Sounds ideal, right? The problem is that the ad preys upon the vulnerable and desperate who want to lose weight but don’t have the discipline or willpower it takes. Following the plan could easily hurt them financially, if not physically, and that makes it unfair. With nothing to support the claim, and language intended to make you buy in spite of that, it is also deceptive.

The FTC isn’t afraid to deal with false advertisers in this arena, either. The organization states that it “has taken action against hundreds of advertisers who have falsely promised easy weight loss. Marketers who promote diet products or services or who make representations about fat loss, weight loss, calorie burning, or the loss of inches or cellulite must make sure that their claims are backed up by sound scientific evidence.”

This “sound scientific evidence” would be the proof supporting the claim. If there is a specific statistical claim being made (e.g. “90 percent of all participants lost weight”), that has to be supported by reliable studies, surveys, tests or the like using acceptable, accurate methods. In addition to the testing requirements, the evidence has to be evaluated by qualified professionals.

Money-back Guarantees and Satisfied Customers


Neither the presence of a money-back guarantee nor the testimony of satisfied customers will lessen or eliminate the need for sufficient, objective information to support your advertising claims. While having a low rate of customers taking advantage of the money-back guarantee is certainly a positive thing, it does not rise to the level of objective evidence as required by law. Customer testimonials may be included to bolster claims, but by themselves, they are not sufficient. What’s more, such testimony has to meet certain criteria. According to the FTC, “All endorsements must reflect the honest experience or opinion of the endorser. Endorsements may not contain representations that would be deceptive, or could not be substantiated, if the advertiser made them directly.” For more on specific rules of keeping endorsements honest, see the sidebar, “Ad Checklist.”

Enforcement


The FTC, in association with other federal and state entities, rigorously enforces the trade and advertising laws of the United States. In terms of advertising, the focus is on making sure advertisements are honest, substantiated and fair. The things that the FTC pays special attention to are:
  • Ads that make claims about health or safety.

  • Ads that make claims that consumers would have trouble evaluating for themselves.

  • Ads where the claims are subjective, things that consumers can judge for themselves without special knowledge or training, receive less attention from the FTC than the kinds of ads listed above.


It is really very easy. Make sure that your advertisement is honest, that you can back up what you claim with hard, objective evidence, that the ad is fair and that it is not deceptive. The law is designed for transparency, so that nothing is hidden from the consumer that might affect their purchase decision. It is up to you, the business owner, to make sure everything is honest, and that means getting educated. To learn more, visit ftc.gov.

See also: Guidelines to keep your endorsements honest.

Endorsements by consumers must reflect the typical experience of consumers who use the product, not the experience of just a few satisfied customers.


If an endorsement doesn’t reflect users’ typical experience, the ad must clearly disclose what consumers can expect their results to be. Saying “Not all consumers will get these results” or “Your results may vary” is not enough.

Endorsements by celebrities must reflect the celebrity’s honest experience or opinion.


If the endorsement represents that the celebrity uses the product, that celebrity actually must use the product. Once a celebrity (or expert) has endorsed a product, the advertiser has an obligation to make sure the endorsement continues to reflect the celebrity’s opinion.

To give an expert endorsement, a person must have sufficient qualifications to be considered an expert in the field.


However, just being an expert isn’t enough. Expert endorsements must be supported by an actual evaluation, examination or testing of the product that other experts in the field normally would conduct.

Advertisers also must disclose any material connection between a person endorsing a product and the company selling the product.


A “material connection” is defined as a relationship that might affect the weight or credibility of the endorsement. For example, if an endorser is an employee or relative of the advertiser, that fact must be disclosed because it is relevant to how much weight a consumer would give to the endorsement. Similarly, an advertiser must disclose if a consumer has been paid for giving an endorsement.

Source: The Federal Trade Commission, ftc.gov

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