Federal advertising regulations - what you need to know.
Advertising is an excellent way to obtain new customers. However, if your business advertises to customers in more than one state - your advertisements must comply with both state and federal advertising laws.
The Federal Trade Commission (FTC) is the agency which enforces advertising laws passed by Congress. The FTC has an entire division, called the Division of Advertising Practices, who is tasked with reviewing advertisements and stopping campaigns that violate federal advertising laws.
The primary federal law regulating advertising is the Federal Trade Commission. Under this Act:
- Advertising must be truthful and non-deceptive. This means that you cannot mislead consumers by making dishonest statements that are material to the customer's decision to purchase your product or service.
- Advertisers must have evidence to back up their claims. If you make a specific claim about your product or service, you must have evidence to support that claim. However, the types of acceptable evidence is broad. Examples include customer testimonials, testing you've done with customers, and actual data.
- Advertisements cannot be unfair. You cannot cause substantial economic injury to consumers that buy your product.
The crux of this law is the idea that businesses cannot lie about their products or services, nor can they be deceptive by leaving out information the consumer would find important.