Things You Should Never Say (and always say) In Your Advertising
This blog post contains a transcript from a video presentation. This content is for informational purposes only and should not be considered legal advice. No attorney-client privilege is created.
To start off this post I’d like to talk about the general activity of educating yourself with regard to FTC compliance. Some of the rules get a little bit tricky. Especially when you’re trying tiptoe the line. So always going try to be very clearly on the compliance side of the line rather than trying to tiptoe because if that line ever moves a little bit in one direction you’re going to find yourself in some hot water.
We’re going to define: What is an omission and what is a disclosure? Why you should care and how to think about them when you’re putting together your advertisements?
Omission: a failure to disclose information that a consumer would find relevant in making a purchase decision. This is a type of misleading advertisement. An omission is failing to disclose certain facts about your product, usually facts that are negative, that would effect a consumer’s purchasing decision. Whether or not omission is permissible largely has to do with what the other things that you’re saying in your advertisement. This does not mean that you need to discuss all of the weaknesses of your products.
Disclosure: a statement clarifying a claim in your advertisement to prevent consumers from being misled. This ties into omissions. If your advertisement says something about a product, usually about a feature or benefit, and there is a weakness or negative trait associated with that positive statement then you must disclose the weakness or negative trait to consumers. The safest way to provide a disclosure, from an advertiser’s perspective, is to put the disclosure or disclaimer in the ad copy, right next to the triggering claim. A triggering claim is a statement made in an advertisement that prompts the need for a disclosure.
Let us take the example of an advertisement making the claim that a certain pet shampoo eliminates the risk that your pet will ever get fleas. However, the truth is that the product only reaches that level of effectiveness when used a certain way and combined with other products or materials. This claim would require a disclosure. There are two ways this disclaimer could be made. The first would be simply stating that information right under the triggering claim. However, for many reasons the advertiser may wish to provide a link to another page with a complete disclaimer and instructions on how to get the best use. Simply putting a link titled disclaimer next to the triggering claim is not acceptable. Instead, the link should state something along the lines of “In order to achieve the full effect of this product it must be used in a very specific way. Click here for more information.”
Now lets take a look at an example of something a bit more clearly on the wrong side of things. There was an instance in which eBay advertised that all the Tiffany brand jewelry sold on its website was authentic. However, eBay knew much of the jewelry was fake. This is a case of false advertising. First, since eBay knew some of the jewelry was fake it was not allowed to advertise that ALL of it was authentic. Second, even if eBay did not mention anything about the jewelry being authentic, it still should have had a disclosure stating some of the jewelry might be fake.
The third example is for a toy company that made building blocks that were rivals of Legos and in their advertisements they claimed that these rival blocks were compatible with Legos. However, they didn’t state that that this was only true if consumers bought a special connector that allowed Legos and these other building blocks to connect to each other. That was deemed to be a non-permissible omission because while it was technically true that these rival blocks were compatible with Legos, it didn’t say that you needed to buy a specific piece or a separate product that would allow those blocks to connect to each other.
When you are thinking about whether or not you need to disclose something, always ask yourself “is this information that a consumer would find relevant in making a purchase decision?” If you think it’s relevant, then you must disclose. If an advertiser knows or should know that a consumer would make a purchase or not make a purchase if they were aware of an omitted fact then you must disclose.
There is one final example that I want to give you: An electric razor company launched an ad campaign to convince consumers that electric razors are less irritating than traditional razors. However, the electric razor company did not disclosure that this statement was only true after an adjustment period of 21 days. The electric razor company knew that most consumers are not interested in going through a 21-day adjustment period. Because the electric company did not disclose the information that they knew was important to consumers the advertisement would be considered misleading.
This topic is often times annoying to business owners because there are a lot of gray areas. These very small legal technicalities. That’s why these cases wind up costing so much money in legal fees, because you really need to dig deep into the laws. As a business owner, if you want to avoid the legal fees and all the trouble that comes along with an FTC investigation, you always want to err on the side of extreme compliance.. If there’s a slight question in your mind, just disclose it.
If you think in your mind that there’s a possibility that a reasonable consumer would want to know an omitted fact about your product then you can have one of two options. You can either: (A) Disclose the negative fact about your products, or (B) Not talk about that positive thing that’s related to the negative thing.
Keep in mind the kind of information that a consumer is going to want to know in order to make an informed decision. As long as you keep the consumers best interest in mind and not just your bottom lines, then you are going to have a much easier time being compliant. For two reasons, 1. You’re going to greatly lower or almost even eliminate the risk of an FTC investigation. 2. Your consumers are not going to feel misled and file complaints.
We’ve all been consumers and most of us have bought something and been unaware of a negative aspect the product. We only find out about it once we have the product in our possession and then we’re upset because the product doesn’t meet our expectation. We either want a refund or want to exchange it or get something different. It’s a huge hassle which negatively affects the reputation of the company that sold us a product but didn’t tell us those things that we needed to know. It could be as simple as buying something and the package not saying that it needs batteries. Maybe that’s not an illegal omission, but it still affects the way that you perceive that company.