4. Consumer Protection
c. Know your rights under deceptive advertising and deceptive pricing laws
Under the Federal Trade Commission Act:
- Advertising must be truthful and non-deceptive;
- Advertisers must have evidence to back up their claims; and
- Advertisements cannot be unfair.
- Additional laws apply to ads for specialized products like consumer leases, credit, 900 telephone numbers, and products sold through mail order or telephone sales. And every state has consumer protection laws that govern ads running in that state.
What makes an advertisement deceptive?
According to the FTC's Deception Policy Statement, an ad is deceptive if it contains a statement — or omits information — that:
- 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.
What makes an advertisement unfair?
According to the Federal Trade Commission Act and the FTC's Unfairness Policy Statement, an ad or business practice is unfair if:
- 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.