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Operation Full Disclosure: FTC Issues Warning Letters to Numerous Advertisers
Practical Law Legal Update 7-582-9265 (Approx. 4 pages)
Operation Full Disclosure: FTC Issues Warning Letters to Numerous Advertisers
by Practical Law Commercial
| Published on 30 Sep 2014 • USA (National/Federal) |
As part of its Operation Full Disclosure, the Federal Trade Commission (FTC) has sent warning letters to over 60 companies that failed to make adequate disclosures in their print and television advertisements.
On September 23, 2014, the Federal Trade Commission (FTC) announced in a press release that it has sent warning letters to more than 60 companies across various industries, including 20 of the country's 100 largest advertisers, that failed to make adequate disclosures in their television and print advertisements. These letters are part of the agency's broader initiative, Operation Full Disclosure, to ensure that companies comply with federal advertising laws.
These warning letters targeted advertisements with disclosures that contained important information necessary to clarify misleading claims, but were either:
- In fine print.
- Hard for consumers to read.
- Otherwise easy for consumers to miss.
For example, the FTC negatively commented on advertisements that:
- Quoted a product or service's price, but did not adequately disclose the conditions for obtaining that price.
- Claimed a product capability, but did not adequately disclose that the consumer had to first buy another product or service.
- Made absolute or broad statements without explaining exceptions or limitations.
- Made comparative claims without disclosing the basis for those claims.
- Did not adequately disclose issues related to the safety or legality of a product or service.
The letters reiterated the FTC's rule that necessary disclosures should be clear and conspicuous, which means that these disclosures should use clear and unambiguous language and should stand out in the advertising. In general, disclosures should be:
- Close to related claims.
- Not hidden or buried in unrelated details.
- Appear in easy-to-read font and in a shade that stands out.
- Appear on screen long enough to be noticed, read and understood, if the advertisement is on television.
The FTC asked letter recipients to notify the agency of actions they will take to correct their advertising problems. However, the FTC also stated in its press release that companies that did not receive letters should not assume that their advertisements are acceptable. All companies must continue to ensure that their advertisements, whether online, on television or in print, comply with FTC rules and regulations.
For more on the FTC's disclosure rules, see Practice Note, Advertising: Overview: Clear and Conspicuous Disclosures and Legal Update, FTC Releases Revised Online Advertising Disclosures.