The truth in advertising is that sometimes there is no truth in advertising. Unscrupulous business owners often make big promises (that they can’t actually keep) or just flat-out lie about their product in order to lure in more customers.
My advice? Don’t be that guy. Making false or misleading statements about your business, no matter how innocuous they seem, can land you in some seriously hot water with the FTC.
If you’re not sure of exactly what you can and cannot say, keep reading for more details. And remember: When in doubt, err on the side of caution!
Deceptive Practices in Advertising
It’s easy to understand why some business owners fudge the facts a little in their advertising, especially when it comes to online marketing. It’s the internet: People can just do whatever they want!
Lie a little about your results. Fib about how many people you’ve worked with. Casually make up an impressive education. No one is going to check the facts anyway, right?
The Federal Trade Commission (FTC) regularly monitors advertising for deception, and they say that many ads feature empty promises and false claims that most people would never realize. But they know when something smells fishy.
As a business owner, it’s important to always be honest about your products and services, yourself, and the results your customers can expect (not just because you might get in trouble, but because it’s the right thing to do!)
Some giant red flags the FTC looks out for, and things you should avoid, include:
- Fake offers (Don’t promise a give-away or add-on features and benefits if you can’t actually provide them)
- Misleading promises (“Guaranteed to double your sales within 90 days!”)
- Unqualified statistics (Don’t say over 10,000 people have lost 50 pounds or more using your supplements if you can’t prove it)
- “No risk guarantees”
- Much more
Advertising Rules and Regulations
Now that you know some of the things the FTC looks for in advertising, what are the actual rules and regulations? Can you absolutely not use a phrase like “Guaranteed to double your sales?” What if you actually CAN double their sales?
The law says that sellers are responsible for claims they make about their products or services. Third-party agencies, such as advertising firms, may also be held responsible for false claims or advertising.
In theory, you can say anything you want about your business . . . as long as it’s true. According to the FTC, a representation, omission, or practice is deceptive if it is likely to:
- mislead consumers and
- affect consumers’ behavior or decisions about the product or service.
In addition, an act or practice is unfair if the injury it causes, or is likely to cause, is:
- not outweighed by other benefits and
- not reasonably avoidable.
How the FTC Works
The FTC closely monitors advertising which may affect consumers’ well-being, whether it’s on the internet, radio, television, or anywhere else – and they’re especially vigilant about claims concerning food, over-the-counter drugs, dietary supplements, alcohol, or other products that may impact health.
The commission is made up of three different bureaus, each with a different role. The Bureau of Consumer Protection is the arm of the FTC that protects consumers against unfair or deceptive acts or practices in commerce. As part of their role, they investigate issues raised by reports from consumers and businesses, pre-merger notification filings, congressional inquiries, or reports in the media.
When a case of advertising fraud is discovered, the FTC “files actions in federal district court for immediate orders to stop scams, prevent perpetrators from perpetrating scams in the future, freeze their assets, and get compensation for victims.”
Still concerned that you may be doing social media wrong as an influencer or online business? Then check out my list of the Top 5 DON’Ts of Social Media and Online Marketing.
Building your online presence can be lucrative in more ways than one, but it’s important to be cognizant of potential legal concerns. For more information on this and other topics like it, subscribe to my newsletter for weekly updates straight to your inbox.