FTC Warns Businesses About Insufficient Disclosures in Advertisements
Commercial Litigation / Corporate & Business Law on September 30, 2014
On September 23, 2014, the Federal Trade Commission reported that it had issued warning letters to more than 60 companies spanning across a range of different industries. According to the FTC press release, the ongoing initiative—Operation Full Disclosure—is meant to give advertisers an opportunity to come into compliance with federal consumer protection laws.
The warning letters addressed common advertisement disclosure problems, including:
- Disclosures that are not close enough to the relevant claim;
- Disclosures that are in fine print or are in a color or font that make it difficult to notice and read; and
- Disclosures that are buried in unrelated details or obscured by other design elements.
The FTC also pointed out that the advertisement disclosures it considered to be non-compliant fell into a variety of categories, including:
- Ads that quoted a price without adequately disclosing the conditions for obtaining that price;
- Ads that claimed a product or service capability without adequately disclosing the need to first buy an additional product or service;
- Ads that claimed that a product or service was superior to that of a competitor without adequately disclosing how narrowly the advertiser defined the competitive market or its basis for the comparison;
- Ads that promoted a “risk-free” or “worry-free” trial without adequately disclosing the need to pay for initial or return shipping;
- Ads that made broad statements without adequately disclosing the exceptions or limitations to those statements; and
- Ads that made false claims that the advertiser attempted to cure with a contradictory disclosure.
The Operation Full Disclosure warning letters are a good reminder for every businesses to carefully review its advertisements in every medium, whether it be television advertising, radio advertising, print advertising, experiential advertising, or any of the various forms of advertising on “new media.”
