Strict federal and state rules and regulations apply to both the advertiser and the advertising agency with regard to prohibitions against deceptive advertisements generally, as well as with regard to specific types of advertisements.
Under Federal Trade Commission (“FTC”) rules advertising must be truthful and non-deceptive, advertisers must have evidence to back up their claims, and advertisements cannot be unfair.
According to the FTC’s Deception Policy Statement, an ad or business practice is:
if it contains a statement (or omits information) that is iikely to mislead consumers acting reasonably under the circumstances, and is “material” that is, important to a consumer’s decision to buy or use the product.
if it has no “reasonable basis” for its claims. A “reasonable basis” means objective evidence that supports the claim. The kind of evidence depends on the claim.
if it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid; and it is not outweighed by the benefit to consumers.
Additional federal laws and regulations apply to ads for certain types of businesses, business practices, and specialized products. Also, every state has consumer protection Laws that govern ads running in that state
Businesses, business practices, and specialized products that are regulated include, without limitation:
