- August 20, 2012
- Posted by: Seth Heyman
- Category: Business Law
Putting that belief into practice is never a good idea. Deliberately misleading customers for the sake of a sale may rise to the level of fraud, which no one looks upon kindly. Nevertheless, you want to describe your product in the best light possible, by stressing its benefits and skirting around its pitfalls, but how do you do that without crossing the line? Advertisers often do this by including a disclaimer in their ads.
Any advertisement that is likely to be seen as deceptive to the average consumer requires a disclaimer. Federal and state laws govern the use of advertising claims, and are enforced on the federal level by the Federal Trade Commission (FTC). Deceptive advertising can also lead to class action lawsuits against the advertiser, so a well written and properly placed disclaimer can be powerful protection.
There are basically two steps determine whether your ad requires a disclaimer. First, examine the statements made regarding your product to see whether they might be viewed as deceptive. Regardless of whether it’s a print ad, radio spot, or TV commercial, the advertisement should be viewed from the perspective of an ordinary consumer acting reasonably in the circumstances. This can be challenging, especially when you may be more sophisticated than the ordinary consumer, which is often the case when the targeted demographic is uneducated and unsophisticated by definition. Ads directed to young adults (i.e., acne medicine) may fall within this category.
Advertising claims don’t have to be untrue in order to be seen as deceptive. Situations in which an ad might be considered deceptive include “actual customer experiences” that describe results that are not typical of those achieved by the average consumer. The same goes for “bait and switch” ads that advertise a product at a certain price, without telling consumers that only a small number of them are available at that price, while the rest are far more expensive.
The next step is to determine whether the potentially deceptive claim is a material one; that is, likely to affect a consumer’s decision to purchase the product. A good example of this type of claim would be one in which a particular result can be achieved by using the product (i.e., a 20 pound weight loss).
If your ad includes a material statement that can be viewed as deceptive, your ad likely requires a disclaimer that discloses unstated facts that may affect a consumer’s purchase decision. The challenge to advertisers is to be able to create a proper disclaimer that doesn’t diminish the effectiveness of the advertisement. As any experienced advertising attorney can attest, this is often more art than science.
The FTC has provided some guidance in its Statement of Enforcement Policy regarding clear and conspicuous disclosures, which explains how long disclaimers should appear on screen and how to use disclaimers on websites. Following these guidelines to the letter will lead to an effective disclaimer; however it may wind up too effective and the ad will hurt sales instead of help them.
Fortunately, these are only guidelines, and an advertiser may stray from them to a certain degree without running into trouble. Just be sure to make a clear, concise, and truthful qualifying statement addressing the potentially deceptive statement. In many cases, reasonable consumers do not read the entirety of an ad, or are directed away from the importance of the qualifying phrase by the acts or statements of the seller. This may render a well drafted disclaimer useless, so make certain your qualifying disclosure is legible, audible, and understandable, and placed in reasonable proximity to the claim that requires it.