What is Advertising Law?
When most businesses set out to sell their product or service, the main focus is on selling their product and little thought is paid to the laws governing how they advertise. However, failing to follow federal and state laws can be costly. I work with businesses to craft advertising that still conveys their message but will keep them out of trouble in print, social, and electronic mediums.
Each state has its own set of consumer protection laws that generally governs what can and cannot be advertised. However, all states and the Federal Trade Commission prohibit unfair or deceptive advertising. Essentially, if a third grader cannot understand your message, its unfair or deceptive. But, more specifically, states may:
- Prohibit simulated checks on prize notices. N.Y. Gen. Bus. 369-ee(d).
- Prohibit cash prizes. O.C.G.A. 10-1-393(b)(16).
- Prohibit more than 10% of entrants from winning a sweepstakes. G.S. 75-32.
- Require specific prize disclosure language. N.Y. Gen. Bus. 369-ee (c), Wis. Stat. 100.171 (3), O.C.G.A. 10-1-393(b)(16), etc.
- Require all disclosures to be in at least 10 point type. Conn. State Agencies 42-110b-28(5).
Do you have questions about:
- Social media compliance?
- Dot com disclosures?
- Promotional law?
- Endorsement law?
- Advertising compliance?
- CAN SPAM compliance?
If so, contact me. I will work with you and your business to ensure your advertisements, in whatever medium, comply with federal and state laws and regulations.
Frequently Asked Questions
It depends on what states the recipient of the advertisement lives. Merriam Webster’s dictionary defines “win” as “to get (something) by effort.” Some states, by statute or by interpretation, have interpreted win to mean that only a small portion of entrants will “win.” In states with such an interpretation, win would not be permissible if every recipients wins some prize. However, all participants could receive a free gift (a small prize), while larger prizes were limited to few people.
Every person has a common law privacy right to their name or likeness. If someone uses their name and likeness without permission, it is an actionable tort. To shield your business from liability, its advisable to have every customer sign a release.
The Federal Trade Commission recently updated its “dot com disclosure guide” which updated its advise on online advertising to include social media. First, just because you are using social media doesn’t mean that no rules apply – the same rules still apply. However, required disclosures can be made by using a clear and conspicuous hyperlink that a consumer can readily find. Second, if your promotion requires customers to re-post items, the post should also contain a disclosure that it is part of a promotion. I recommend using #promo with all social contests or sweepstakes.
The federal Truth in Lending Act (“TILA”) and the Consumer Leasing Act govern finance and lease offers respectfully. If a monthly payment or a down payment amount is offered, TILA requires the (a) monthly payment, (b) number of payments, (c) amount of down payment and (d) interest rate be disclosed, and (e) total amount of all payments. For lease offers, anytime a monthly lease price or amount due at inception is disclosed, CLA requires the following to be disclosed: (1) amount due at inception, (2) monthly payment amount, (3) number of months, and (4) end of lease liability. I always recommend stating “with approved credit” next to every TILA or CLA disclosure, otherwise, the offer appears to be generally applicable and not contingent on a customer’s creditworthiness.