Five Important Legal Lessons for Advertisers from An FTC Pro
As a veteran advertising lawyer, I generally have two types of clients: those who pay me now and those who pay me later. Or, more precisely, those who pay a little upfront for preventive compliance counseling, and those who pay a lot more after they’ve learned they are in the crosshairs of the Federal Trade Commission (FTC) or a state or local consumer cop. My practice is the financial beneficiary of the second client group. However, I take far greater satisfaction in helping to ensure that those in the first never find themselves staring down the barrel of a regulator hellbent on reining in their advertising and forcing them to turn over their hard-earned money to make amends to injured consumers. Principles of advertising law apply equally across all media, from direct mail to TV to the Internet and social media. Whether you are a digital or TV advertiser or both, you have a legal obligation to advertise truthfully, substantiate your product claims, and disclose all important details affecting a consumer’s purchasing decision before she buys. If you’re a digital advertiser considering a move to TV–a present and growing trend–or vice versa, there are a few rules of the road that are helpful to know before you start the trip. Here are five:
Product ClaimsAny statement about a product or service, including its characteristics, attributes, or popularity, that is “objectively provable” and material to a consumer’s purchasing decision, is a legally actionable claim under federal and state truth-in advertising laws. Everything else is puffery or otherwise legally inconsequential. A common misperception among advertisers is that only expressly false or misleading claims can get them in trouble. For example, while they may realize that a bald statement that a weight loss program will help you “lose 30 pounds in 60 days” is a claim, they may think that showing a graphic of a shrinking waist line or beautiful, slim models in bikinis that suggest the same result is not. They couldn’t be more wrong. The FTC and its state counterparts closely scrutinize advertising for implied messages or half-truths and have full legal authority to stop them if they are untrue or unsupported. And it matters not a whit if the advertiser had no intention to convey the message. If the regulator or the “reasonable consumer” believes it’s there, it’s fair game. It therefore behooves advertisers to examine their ad copy from all angles, using consumer perception experts or focus groups where useful, to help ensure that it contains no unintended claims that could come back to bite them.
Claim SubstantiationAny claim that is objectively provable (not puffery) must be supported by “competent and reliable evidence,” defined by the FTC as:
“tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”If it’s a health or safety claim, it must be supported by “competent and reliable scientific evidence” (CRSE), normally (and especially for disease treatment claims) defined as a randomized human clinical trial, or RCT. While the FDA prohibits disease treatment (drug) claims without pre-market approval, the FTC will allow any health claim so long as it’s backed by CRSE. Anecdotal evidence, fringe theories, animal studies, and shoddy clinical trials won’t cut it with the regulators. The FTC rigorously enforces its substantiation requirements, so take your substantiation obligations just as seriously and invest the necessary time and resources to be able to prove your claims. It could spare you far greater time and expense of an FTC investigation down the road. For more on claim substantiation, see the FTC’s Advertising Substantiation Principles here and the same agency’s Dietary Supplements: An Advertising Guide for the Industry found here.