Deceptive/False/Unfair Advertising - PowerPoint Presentation

Slide1

Deceptive/False/Unfair Advertising

Emma Kazaryan

Street Law Slide2

Introduction to Consumer Law

Consumers are people who buy or use goods or services

In the US federal and state laws exist to protect consumers from businesses that want to trick or take advantage of themSlide3

Deceptive Advertising - Federal Law

The Federal Trade Commission (FTC) is responsible for consumer protection at the federal level

The FTC has rules for “truth-in-advertising” that require that advertising:

-must be

truthful

and

non-deceptive

-must have

evidence

to back up its claim

-cannot be

unfairSlide4

What Makes Advertising Deceptive?

An advertisement is deceptive if it contains a statement (or omits information) that:

is likely to

mislead

consumers acting reasonably under the circumstances

is

material

, which means its important to the consumer’s decision to buy or use the productSlide5

What Makes Advertisement Unfair?

An ad or business practice is unfair if:

is likely to cause substantial consumer

injury

which a consumer could not reasonably avoid; and

it is

not

outweighed by the benefit

to consumersSlide6

What Kind of Evidence Must a Company Have to Support an Advertisement Claim?

Before a company runs an ad, it has to have a "

reasonable basis

" for the claims; this 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

Customer testimonials are usually not enough to support a claim Slide7

Ads the FTC Is Most Skeptical Of

Ads that make claims about health or safety; for example:

-ABC Sunscreen reduces the risk of cancer

-ABC Water Filters remove harmful toxins from water

-ABC Chainsaw’s safety latch reduces the risk of injury

Ads that make claims that consumers would have trouble evaluating for themselves; for example:

-

ABC Gasoline decreases engine wear

-ABC Hairspray is safe for the ozoneSlide8

Penalties for False/Deceptive Ads

Cease and desist orders

Civil penalties, consumer redress and other monetary remedies

Corrective advertising, disclosures and other informational remedies Slide9

Steps FTC Takes to Determine Whether an Ad is Deceptive

How would a

reasonable

consumer view this ad?

What are the

express

and

implied

claims made in the ad?

Is/are the claim(s)

material

?

Is there

sufficient evidence

to support the claim(s)? Slide10

Note on Washington State Law

The Washington Legislature enacted the Consumer Protection Act (CPA) which is modeled after the FTC Act

The law says: "Unfair methods of competition and unfair or

deceptive

acts or practices in the conduct of any trade or commerce are hereby declared unlawful."

The

Attorney General

is authorized to enforce the Act Slide11

Deceptive Advertising in Action, in Washington

http://www.king5.com/news/get-jesse/WA-attorney-general-T-Mobile-contract-free-204765901.htmlSlide12

RCW 9.04.050

False, Misleading,

D

eceptive

A

dvertising

“It shall be unlawful for any person to publish, disseminate or display, or cause directly or indirectly, to be published, disseminated or displayed in any manner or by any means, including solicitation or dissemination by mail, telephone, electronic communication, or door-to-door contacts, any false, deceptive or misleading advertising, with knowledge of the facts which render the advertising false, deceptive or misleading, for any business, trade or commercial purpose or for the purpose of inducing, or which is likely to induce, directly or indirectly, the public to purchase, consume, lease, dispose of, utilize or sell any property or service, or to enter into any obligation or transaction” Slide13

RCW 9.04.050: Read Between the Lines

“It shall be unlawful

for any person

to publish,

disseminate or display, or cause directly or indirectly, to be published, disseminated or displayed in any manner or by any means, including solicitation or dissemination by mail, telephone, electronic communication, or door-to-door contacts,

any false, deceptive or misleading advertising, with knowledge of the facts which render the advertising false, deceptive or misleading,

for any business, trade or commercial purpose or

for the purpose of inducing,

or which is likely to induce, directly or indirectly, the

public to purchase

, consume, lease, dispose of, utilize or sell any

property or service,

or to enter into any obligation or transaction

” Slide14

RCW 9.04.050 Decoded

“It shall be unlawful to

publish

any

false, deceptive or misleading advertising,

with

knowledge

of the facts which render the advertising false, deceptive or misleading for the purpose of

inducing the public to purchase

property or service” Slide15

T-Mobile Commercial

http://

www.youtube.com/watch?v=ZuJPXdj7cDI Slide16

Applying the Statute

Did

T-Mobile

publish

or display an advertisement

?

Was

the advertisement

false

,

deceptive

or

misleading

? [Remember FTC guidelines]

Did

T-Mobile

know

that the advertisement was deceptive

?

Did

T-Mobile

intend

to induce

people to buy something?Slide17

Filing a Complaint - FTC

Federal Trade Commission

http://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftc

Note: the FTC does not resolve individual complaints.

Your contact information: name, address, phone number, email

The type of product or service involved

Information about the company or seller: business name, address, phone number, website, email address, representative’s name

Details about the transaction: the amount you paid, how you paid, the dateSlide18

Filing a Complaint – WA State AG

WA State Attorney General

http://www.atg.wa.gov/fileacomplaint.aspx#.UwROhoXj7X5

Your name, address, phone number, email

The type of product or service involved

Information about the company or seller: business name, address, phone number, website, email address, representative’s name

Details about the transaction: the amount you paid, how you paid, the date

Declaration and signature