Is Your Advertising Legal?

If you're going to be advertising your products or services to consumers, you'd better make sure it follows FTC guidelines, or it might not be legal!

How many law suits have been filed based on deceptive advertising? And how many businesses have subsequently gone bankrupt? Advertising isn't something that your business should take lightly, particularly if you're making claims about your products or services. If your advertising isn't legal, you could face serious ramifications---both financially and in court.

The FTC (Federal Trade Commission) provides three basic rules for advertising that all business owners and advertising professionals should recognize. The first is that, in order for advertising to be legal, it must be completely truthful. Second, the business must be able to back up any claims made in the ad; and third, any advertising must be considered "fair" both to consumers and to the competition.

Misleading Consumers

Your advertising might not be legal if it misleads consumers either by action or by omission. For example, if a business claims to have the cheapest tennis shoes at the mall, it shouldn't leave out that the discounted price is only offered before 5pm. Making untrue statements or leaving out details can constitute deceptive advertising.

Comparative Advertising

When you compare your products or services to those of another business, this is considered comparative advertising and is entirely legal. However, the basis from which you make these claims must be fair and heavily documented. For example, if you say that your tennis shoes are more comfortable than your competitor's, it should be backed up by a survey or testimonial from several customers.

Using Testimony

We've all seen the ads on television where famous basketball players endorse anti-perspirant and doctors recommend specific medications. You can use testimonials in your advertising, but if the testimonial isn't legitimate, your advertising might not be legal. Anyone who endorses your product should be "qualified" to give such endorsements, such as a doctor with a specialty. This is especially true with any product that guarantees health or safety.

Displaying Images

Another way you can get in trouble is by displaying images that mislead the consumer. If your advertising doesn't depict your product or service accurately, it probably isn't legal. For example, if you're trying to sell a bag of chocolate chip cookies and you advertise a picture as "actual size", you'd better have perfect dimensions in the image or you could find yourself in hot water.

"Reasonable Consumer"

The FTC determines the legality of advertising based on the "reasonable consumer", which is entirely subjective at first glance, but makes a big difference in the way you run your advertising campaign. For example, if you are trying to sell a product for medical purposes, you can't assume that customers will understand complex medical jargon. Customers who are also doctors might know exactly what you mean, but they don't qualify as "reasonable customers."