4. Consumer Protection
c. Know your rights under deceptive advertising and deceptive pricing laws (continued)
What penalties can be imposed against a company that runs a false or deceptive ad?
The penalties depend on the nature of the violation. The remedies that the FTC or the courts have imposed include:
- 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 $11,000 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.
What I do if I think an ad is deceptive?
- File a complaint with the National Advertising Division (NAD) of the Council of Better Business Bureaus, if the ad is running nationally or regionally. The NAD is a private, self-regulatory group affiliated with the BBB. It investigates allegations of deceptive advertising and gives advertisers a mechanism for resolving disputes voluntarily.
- Call your local BBB or file an online complaint with the Better Business Bureau if the ad is local.
- Contact the radio station, television station, or publication where the ad ran. Let them know that they're running an ad you think may be deceptive.
- Contact your state Attorney General's Office or your city, county, or state Office of Consumer Affairs. The Colorado Attorney General’s website is http://www.ago.state.co.us.
- Contact the FTC. By mail: Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, DC 20580; by telephone: toll-free 1-877-FTC-HELP.
Can I find out if the FTC is investigating a company?
The FTC can tell you if it has already taken formal action (e.g., filed or settled a lawsuit) against a particular company or against similar kinds of advertisements or products. But the FTC cannot disclose whether an investigation is going on. To find out if a company or product has been the subject of a recent FTC action, search the FTC's website (www.ftc.gov).
For more information
The FTC and BBB work to prevent fraudulent, deceptive, and unfair practices. To file a complaint or to get free information, visit:
To file a complaint: https://odr.bbb.org/odrweb/public/getstarted.aspx
This information is provided under a cooperative agreement between the Better Business Bureau and the U. S. Federal Trade Commission (FTC), which has prepared this information. The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid these practices. To learn more about the FTC and its services, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.