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The Federal Trade Commission publishes a summary of advertising rules.  The rules discussed in this FTC FAQ  apply to web site ads.

Advertising Agencies

Are advertising agencies subject to the FTC Act?

Yes. In addition to the advertiser, the advertising agency also may be held legally responsible for misleading claims in ads. Advertising agencies have a duty to make an independent check on the information used to substantiate ad claims. They may not rely on an advertiser's assurance that the claims are substantiated. In determining whether an ad agency should be held liable, the FTC looks at:

Alcohol Advertising

The FTC can take action if an alcohol ad is deceptive or unfair. The Bureau of Alcohol, Tobacco and Firearms (ATF) also has jurisdiction over deceptive or misleading alcohol labeling and advertising.

Until recently, there was a voluntary policy within the distilled spirits industry not to advertise on television. In 1996, the industry repealed that policy. However, many broadcasters still do not accept ads for distilled spirits.

Like ads for all other products, ads for alcoholic beverages must be truthful and any claims must be substantiated. In addition, alcohol ads by their content or placement may not be directed to underage consumers. Some broadcasters and publishers place additional restrictions on where or when alcohol ads can run.

Bait and Switch

It's illegal to advertise a product when the company has no intention of selling that item, but instead plans to sell a consumer something else, usually at a higher price. For more information, see the FTC's Guides Against Bait Advertising.

Catalogs

My company distributes a catalog of products manufactured by other companies. What's our responsibility for ensuring the accuracy of what's in the catalog?

Rather than just repeating what the manufacturer says about a product, catalog marketers should ask for material to back up the claims. If the manufacturer doesn't come forward with proof or turns over questionable material, a catalog marketer should see a yellow "caution light." This is especially true for products with extravagant performance claims, health or weight loss promises, earnings guarantees, and the like. In writing ad copy, catalogers should stick to the claims that can be supported and avoid embellishing manufacturers' representations. Most importantly, catalog marketers should trust their instincts when a product sounds too good to be true. For more information about selling merchandise by catalog or through direct marketing, see the Business Guide to the Federal Trade Commission's Mail or Telephone Order Merchandise Rule and Business Checklist for Direct Marketers.

Children's Advertising

The FTC pays particular attention to ads aimed at children because children may be more vulnerable to certain kinds of deception. Advertising directed to children is evaluated from a child's point of view, not an adult's. The FTC also works with the Children's Advertising Review Unit (CARU) of the Council of Better Business Bureaus. CARU is a private, self-regulatory group affiliated with the BBB that publishes self-regulatory guides for children's advertising.

In addition to the FTC's general concerns about children's vulnerability to deceptive advertising claims and practices, advertisers should be aware of ongoing discussions about privacy on the Internet, especially as it relates to children. For more information about recent FTC conferences on consumer privacy on the Internet, see Privacy Workshop.

The above article was reprinted from the Federal Trade Commission's web site on April 16, 2001.  Check the FTC web site for changes to the article.

This page was last modified on July 22, 2007.

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