The Federal Trade Commission (FTC) recently announced that it has sent refund checks totally $9.3 million to nearly 200,000 consumers who bought the “Ab Circle Pro” device. The company claimed that exercising on the device for just three minutes a day would cause consumers to lose 10 pounds in two weeks. The day before, the FTC issued a press release about cactus juice marketers having to pay $3.5 million in refunds to consumers after making deceptive claims that the product treated diseases.
What is deceptive advertising? Advertising must be truthful and non-deceptive; advertisers must have evidence to back up their claims; and advertisements cannot be unfair. Advertising is considered deceptive if it is likely 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.
Does all advertising have to be “true”? Puffery is a legally permitted exaggeration that no reasonable person would take literally. The distinction between puffery and false advertising is that puffery is subjective while false advertising consists of objective statements. Objective statements are statements that can be verified. The line between subjective and objective is not always an easy one to draw. The FTC is in the process of settling a claim that it brought against L’Oréal. Products in the Lancôme Génifique line sold for as much as $132 at upscale department stores. According to the FTC, the ads went beyond subjective beauty claims, emphasizing instead the supposed science behind the products: “Genes produce specific proteins. With age, their presence diminishes. Now, boost genes’ activity and stimulate the production of youth proteins.” The product promises “visibly younger skin in just 7 days.” In analyzing the issue, Lesley Fair of the FTC warns:
“Ads that focus on users’ dewy visage or angelic glow are probably just puffery. But once companies make objective product representations, long-standing substantiation principles apply.”
Another issue that comes up in the context of deceptive advertising is testimonials. If there is a material connection between your endorsing “consumers” and the marketer of the product or service – disclose it! And, check out my blog post on the subject: HERE.