Make sure that when you are advertising your brand that you know the rules of advertising.
- Advertising must be truthful and non-deceptive;
- Advertisers must have evidence to back up their claims; and
- Advertisements cannot be unfair.
What makes an advertisement deceptive?
- Is likely to mislead consumers acting reasonably under the circumstances; and
- Is “material” – that is, important to a consumer’s decision to buy or use the product.
Whether a business is an established global brand or a start-up, effective advertising and marketing can be the key to its success. All businesses have a legal responsibility to ensure that their advertising is truthful and not deceptive. And no matter where an ad appears – on the Internet, on the radio or television, in newspapers and magazines, in the mail, or on billboards or buses – the same truth-in-advertising standard applies. So when you develop a beauty product be very careful on what you say on the labeling, the advertising because you could get investigated.
What makes an advertisement unfair?
- it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid; and
- it is not outweighed by the benefit to consumers.
What kind of evidence must a company have to support the claims in its ads?
Before a company runs an ad, it has to have a “reasonable basis” for the claims. A “reasonable basis” means objective evidence that supports the claim. The kind of evidence depends on the claim. At a minimum, an advertiser must have the level of evidence that it says it has. For example, the statement “Two out of three doctors recommend ABC Pain Reliever” must be supported by a reliable survey to that effect. If the ad isn’t specific, the FTC looks at several factors to determine what level of proof is necessary, including what experts in the field think is needed to support the claim. In most cases, ads that make health or safety claims must be supported by “competent and reliable scientific evidence” – tests, studies, or other scientific evidence that has been evaluated by people qualified to review it. In addition, any tests or studies must be conducted using methods that experts in the field accept as accurate.
What penalties can be imposed against a company that runs a false or deceptive ad?
- Cease and desist orders. These legally-binding orders require companies to stop running the deceptive ad or engaging in the deceptive practice, to have substantiation for claims in future ads, to report periodically to FTC staff about the substantiation they have for claims in new ads, and to pay a fine of $16,000 per day per ad if the company violates the law in the future.
- Civil penalties, consumer redress and other monetary remedies. Civil penalties range from thousands of dollars to millions of dollars, depending on the nature of the violation. Sometimes advertisers have been ordered to give full or partial refunds to all consumers who bought the product.
- Corrective advertising, disclosures and other informational remedies. Advertisers have been required to take out new ads to correct the misinformation conveyed in the original ad, notify purchasers about deceptive claims in ads, include specific disclosures in future ads, or provide other information to consumers.
- Or you end up in the next REAL HAIR TRUTH DOCUMENTARY