Markets Wired

After reviewing numerous national television and print advertisements, staff of the Federal Trade Commission has sent warning letters to more than 60 companies – including 20 of the 100 largest advertisers in the country – that failed to make adequate disclosures in their television and print ads. The initiative – Operation Full Disclosure – is the FTC’s latest effort to ensure that advertisers comply with federal law and do not mislead consumers.

Operation Full Disclosure focused on disclosures that were in fine print or were otherwise easy to miss or hard to read, yet contained important information needed to avoid misleading consumers. In the warning letters, staff identified problematic ads, recommended that advertisers review all of their advertising to ensure that any necessary disclosures are truly “clear and conspicuous,” and asked them to notify the staff of the actions they intended to take with respect to their advertising. The response to staff’s letters has been extremely positive.

“Consumers depend on information in advertising to make their buying decisions – whether it’s computers or cleaning products, televisions or tools, hotel rooms or hair care,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Through efforts like these, the Federal Trade Commission ensures that consumers can have confidence that the ads they see are not hiding important information.”

The FTC’s longstanding guidance to companies is that disclosures in their ads should be close to the claims to which they relate – not hidden or buried in unrelated details – and they should appear in a font that is easy to read and in a shade that stands out against the background. Disclosures for television ads should be on the screen long enough to be noticed, read, and understood, and other elements in the ads should not obscure or distract from the disclosures.

The staff letters advised advertisers that to meet the “clear and conspicuous” standard, their disclosures should use clear and unambiguous language and should stand out in the advertising – consumers should be able to notice disclosures easily; they should not have to look for them.

FTC staff directed the warning letters to advertisers in a wide range of industries, covering English- and Spanish-language advertising for many different types of products. Staff attempted to identify a representative sample of advertisers making inadequate disclosures; advertisers who did not receive a letter should not assume that their advertisements are fine. Staff is not disclosing the recipients of the letters at this time.

The inadequate disclosures staff identified in the ads it reviewed fell into many different categories. Many ads quoted the price of a product or service, but did not adequately disclose the conditions for obtaining that price, while others did not adequately disclose an automatic billing feature. Other ads claimed a product capability or that an accessory was included, but did not adequately disclose the need to first own or buy an additional product or service.

In some ads, the advertiser claimed that a product was unique or superior in a product category, but did not adequately disclose how narrowly the advertiser defined the category, while other comparative ads did not adequately disclose the basis of their comparisons.  Ads promoting a “risk-free” or “worry free” trial period did not adequately disclose that consumers would need to pay for initial and/or return shipping. Numerous other ads made absolute or otherwise broad statements and had inadequate disclosures explaining exceptions or limitations.

Weight-loss ads featuring testimonials claiming outlier results did not adequately disclose the weight loss that consumers generally could expect to achieve. A handful of ads did not adequately disclose issues related to the safety or legality of a product or service. Several ads included a demonstration that was materially altered and did not adequately disclose the alteration. A couple of ads made false claims that the advertisers attempted to cure with contradictory disclosures, which are not sufficient to prevent ads from being deceptive.

While Operation Full Disclosure focused on television and print advertisements, it follows a recent FTC effort to address online disclosures in new media. Last year, the staff issued .com Disclosures: How to Make Effective Disclosures in Digital Advertising, which provided new guidance for mobile and other online advertisers on how to make online disclosures clear and conspicuous to avoid deception. Like the .com Disclosure Guidance, Operation Full Disclosure underscores that consumer protection laws apply equally to marketers across all media, whether delivered on a desktop computer, a mobile device, or more traditional media like television or print.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.