Deceptive_False_Unfair Advertising

Deceptive/False/Unfair Advertising
Emma KazaryanStreet Law
Introduction to Consumer Law
Consumers are people who buy or use goods or servicesIn the US federal and state laws exist to protect consumers from businesses that want to trick or take advantage of them
Deceptive Advertising - Federal Law
The Federal Trade Commission (FTC) is responsible for consumer protection at the federal levelThe FTC has rules for “truth-in-advertising” that require that advertising:-must betruthfulandnon-deceptive-must haveevidenceto back up its claim-cannot beunfair
What Makes Advertising Deceptive?
An advertisement is deceptive if it contains a statement (or omits information) that:is likely tomisleadconsumers acting reasonably under the circumstancesismaterial, which means its important to the consumer’s decision to buy or use the product
What Makes Advertisement Unfair?
An ad or business practice is unfair if:is likely to cause substantial consumerinjurywhich a consumer could not reasonably avoid; andit isnotoutweighed by the benefitto consumers
What Kind of Evidence Must a Company Have to Support an Advertisement Claim?
Before a company runs an ad, it has to have a "reasonable basis" for the claims; this means objective evidence that supports the claimThe kind of evidence depends on the claimAt a minimum, an advertiser must have the level of evidence that it says it hasCustomer testimonials are usually not enough to support a claim
Ads the FTC Is Most Skeptical Of
Ads that make claims about health or safety; for example:-ABC Sunscreen reduces the risk of cancer-ABC Water Filters remove harmful toxins from water-ABC Chainsaw’s safety latch reduces the risk of injuryAds that make claims that consumers would have trouble evaluating for themselves; for example:-ABC Gasoline decreases engine wear-ABC Hairspray is safe for the ozone
Penalties for False/Deceptive Ads
Cease and desist ordersCivil penalties, consumer redress and other monetary remediesCorrective advertising, disclosures and other informational remedies
Steps FTC Takes to Determine Whether an Ad is Deceptive
How would areasonableconsumer view this ad?What are theexpressandimpliedclaims made in the ad?Is/are the claim(s)material?Is theresufficient evidenceto support the claim(s)?
Note on Washington State Law
The Washington Legislature enacted the Consumer Protection Act (CPA) which is modeled after the FTC ActThe law says: "Unfair methods of competition and unfair ordeceptiveacts or practices in the conduct of any trade or commerce are hereby declared unlawful."TheAttorney Generalis authorized to enforce the Act
Deceptive Advertising in Action, in Washington
http://www.king5.com/news/get-jesse/WA-attorney-general-T-Mobile-contract-free-204765901.html
RCW 9.04.050False, Misleading,DeceptiveAdvertising
“It shall be unlawful for any person to publish, disseminate or display, or cause directly or indirectly, to be published, disseminated or displayed in any manner or by any means, including solicitation or dissemination by mail, telephone, electronic communication, or door-to-door contacts, any false, deceptive or misleading advertising, with knowledge of the facts which render the advertising false, deceptive or misleading, for any business, trade or commercial purpose or for the purpose of inducing, or which is likely to induce, directly or indirectly, the public to purchase, consume, lease, dispose of, utilize or sell any property or service, or to enter into any obligation or transaction”
RCW 9.04.050: Read Between the Lines
“It shall be unlawfulfor any personto publish,disseminate or display, or cause directly or indirectly, to be published, disseminated or displayed in any manner or by any means, including solicitation or dissemination by mail, telephone, electronic communication, or door-to-door contacts,any false, deceptive or misleading advertising, with knowledge of the facts which render the advertising false, deceptive or misleading,for any business, trade or commercial purpose orfor the purpose of inducing,or which is likely to induce, directly or indirectly, thepublic to purchase, consume, lease, dispose of, utilize or sell anyproperty or service,or to enter into any obligation or transaction”
RCW 9.04.050 Decoded
“It shall be unlawful topublishanyfalse, deceptive or misleading advertising,withknowledgeof the facts which render the advertising false, deceptive or misleading for the purpose ofinducing the public to purchaseproperty or service”
T-Mobile Commercial
http://www.youtube.com/watch?v=ZuJPXdj7cDI
Applying the Statute
DidT-Mobilepublishor display an advertisement?Wasthe advertisementfalse,deceptiveormisleading? [Remember FTC guidelines]DidT-Mobileknowthat the advertisement was deceptive?DidT-Mobileintendto inducepeople to buy something?
Filing a Complaint - FTC
Federal Trade Commissionhttp://www.ftc.gov/faq/consumer-protection/submit-consumer-complaint-ftcNote: the FTC does not resolve individual complaints.Your contact information: name, address, phone number, emailThe type of product or service involvedInformation about the company or seller: business name, address, phone number, website, email address, representative’s nameDetails about the transaction: the amount you paid, how you paid, the date
Filing a Complaint – WA State AG
WA State Attorney Generalhttp://www.atg.wa.gov/fileacomplaint.aspx#.UwROhoXj7X5Your name, address, phone number, emailThe type of product or service involvedInformation about the company or seller: business name, address, phone number, website, email address, representative’s nameDetails about the transaction: the amount you paid, how you paid, the dateDeclaration and signature