Marketing & Advertising Practice Divisions
The Consumer Protection Bureau’s Marketing & Advertising Divisions focus on preventing common types of fraudulent claims and deceptive actions taken by marketers while bringing their products to market.
In this section, we will look at the different areas of marketing and advertising monitored and regulated by the consumer protection bureau.
What is deceptive advertising?
Deceptive advertising is when images and words used in print, digital format, or video advertisements directly or indirectly imply claims about products which aren’t true or omit necessary information for a full understanding of the truth.
According to the Federal Trade Commission and consumer protection practices:
Product names, pricing, and claims must not mislead consumers.
Mostly, anything that would affect consumers’ behavior or decisions about the product or service must be truthful.
- Product packaging,
- digital media
A simple example of deceptive advertising:
An ice-cream promotes itself in a social media post as a dairy-free alternative. However certain ingredients are, in truth, derived from dairy products.
This would be a violation of consumer protection laws.
Also, an advertisement is classified as misleading if it fails to provide information necessary for the consumer to be well-informed.
A new dietary supplement promotes itself as a solution to a severe nutritional deficiency which leads to migraines.
The advertising fails to inform people that less than 1% of people suffering from migraines have this deficiency.
This is considered misleading and would be in direct violation of consumer protection laws because consumers are likely to assume that the supplement will help anyone with a migraine.
Speaking of which;
Both as business owners and consumers, we must be vigil when it comes to dietary supplements. This product category is especially susceptible to consumer deception and untruthful marketing.
Which is why…
The FTC has created an advertising guide for dietary supplements and weight-loss products to outline what marketers may, and may not do when promoting their product’s health benefits.
Consumer Protection Law and Environmental claims
The Federal Trade Commission stipulates that environmental claims should be:
- Truthful, and;
- backed up with evidence, such as official
Some commonly used environmental terms used are words like “biodegradable,” “recyclable,” or “Non-toxic.”
However, to remain compliant with Consumer Protection Laws, such claims need to be proven with certifications or clear explanations as to how they achieve that environmental claim.
If a product’s material is labeled as “recyclable,” marketers need to explicitly list the known recyclable materials and explain this on the packaging.
Ie. “Our products are made from 100% bamboo, which is a known recyclable and sustainable material.”
If you’d like to know more about what environmental claims can and cannot be made, take a look at the FTC’s “Green Guides.” This is the FTC’s guideline marketers must follow to remain compliant with Consumer Protection Laws when making environmental promises.
“Made in USA” claims
The country of origin for a product implies an expected standard and perceived value which can affect a consumer’s purchasing habits. It’s for this reason that misleading origin claims are deceptive and in violation of Consumer Protection Laws.
You have two identical pens.
One was manufactured in the United Kingdom, whereas the other was made in Bangladesh. Most consumers would associate different values to each pen because of commonly held perception differences between manufacturing practices in these two countries.
Knowing the origin of the product would influence their purchase decision.
Implying the pen was made in the UK, when it was made in Bangladesh would be a violation of the FTC consumer protection Act.
The CAN-SPAM Act
Counter to its common name, the CAN-SPAM Act protects consumers from what may be considered spam or unwanted electronic communications by enforcing communication requirements such as:
- Providing accurate subject lines which do not mislead the reader
- Allowing readers an easy way to opt-out of receiving messages
(and honoring their decision by opting them out)
- Senders displaying their business’ physical location,
- Senders must state who they are and their intentions.
So, next time you receive an unwanted email from someone you already unsubscribed from, know that they are in violation of the law and that you have every right to pursue them legally may they continue to ignore your “unsub” request.
Telemarketing Sales Rules
Getting that call right as you sit down for dinner, then realizing it’s someone trying to sell you something. We all hate it, right?
Thankfully, strict laws are in place to protect consumers from unfair and deceitful actions taken by telemarketers, outlined in a piece of legislature known as the Telephone Consumer’s Protection Act, or TCPA.
These laws ensure that consumers are not harassed, deceived, or mistreated by telemarketers. They cover topics such as:
- Robocalls, or automated dialing systems;
- Automated Text Messages;
- The National Do Not Call Registry List
- When and how a telemarketer may contact you
Franchise & Business Opportunity Rules
If you’re like me, you have seen a fair share of advertisements claiming to offer business systems for quick profits or franchises “guaranteed” to make you rich.
Many of these are just scams, creating profits only for the deceitful marketers selling the deceitful schemes.
The FTC has taken note.
The Consumer Protection Bureau has cracked down on such fraudulent business and their franchise opportunities. One way they have done this is by requiring sellers to provide all prospective buyers with what is known as a disclosure document.
A disclosure document outlines 23 specific points of information a business must disclose into potential buyers to remain compliant. Details include business and income claims and must provide evidence to support those claims.
This restricts sellers from making hyped-up income or business claims which could hurt the consumer while protecting otherwise unsuspecting individuals looking for a better life.
Consumer Protection Laws and Technological Changes
Keep in mind; Consumer Protection laws aren’t stagnant. They are always evolving to meet changes in technology and society.
The most significant change in recent years has, of course, been the worldwide adoption of the internet.
This change has created many new threats to consumer’s privacy and protection, spurring the creation of new consumer protection laws specifically designed to protect consumer’s privacy and rights online.
Now, for the final section of this guide: