Before you launch your next small business advertising campaign, make sure it is compliant with US laws to avoid legal pitfalls. False advertising is any type of advertising that deceives or misleads prospects. In most cases, false advertising leads your prospect to believe he or she is getting a good deal or saving money when the reality is the company is benefiting.
Two key examples of false advertising include:
- Hidden fees or surcharges – The company advertises a specific price but fails to disclose added fees and surcharges.
- “Going out of business” sales – Sometimes, the liquidators hired to sell the closing store’s merchandise will actually raise the prices before discounting them.
False advertising is regulated by the US Federal Trade Commission (FTC). If your prospects feel they have been misled, they can send a copy of the original ad to the FTC, which will then determine if they can get their money back or if changes must be made to your advertising campaign.
To protect yourself against false advertising, follow these guidelines:
- Be truthful. - Keep your ad truthful and only make claims you can back up.
- Use accurate pricing. – The price you advertise is the price you must honor. Don’t try to deceive prospects by including hidden fees or surcharges.
- Don’t put down competitors. Don’t make misleading or erroneous claims about competitors or alter their logos or trademarks.
- Use legitimate testimonials. The testimonial must come from someone who used the product the way it was intended to be used. Disclose if you paid for any endorsements or if results are not typical. See the FTC’s guidelines for using testimonials and endorsements for further information.
- Get permission. Make sure you have the rights to use photography and graphics.
- Get releases. Make sure to have written releases for anything or anyone in your ads.
If you blog, make sure you disclose if you got any product for free that you might review. See Wired’s article FTC Tells Amateur Bloggers to Disclose Freebies or Be Fined for more information.
Disclaimer: This article is not intended to provide legal advice.
