A store cannot advertise a sale on products it does not carry.
The federal government and each state have laws to protect consumers from deceptive advertising. The Federal Trade Commission Act is the national law for "truth-in-advertising" guidelines. Although special laws apply to advertisers of certain products or services, such as credit, mail order and telephone sales, and consumer leases, basic rules apply to all categories over which the FTC has regulatory powers. Advertisers may face substantial penalties for violating the law.
Deception
Advertising is deceptive if it materially influences a consumer's decision about the product and the ad is misleading to a consumer who is exercising reasonable judgment. When deciding whether advertising is deceptive, the FTC evaluates all aspects of the ad, including images, phrasing and words. Since it is illegal for advertisers to make implied or direct claims without supporting proof, the FTC examines whether the company has such proof. The advertiser cannot omit information that might influence a consumer's decision if it were disclosed. The deception must also be important enough to influence the purchasing decision, such as promises about a product's effectiveness.
Advertiser's Proof of Claim
Before an advertisement appears, a company must have substantiating proof of any claims it makes in its ad. The FTC asses whether there is a reasonable basis or objective evidence for the claim. The exact proof varies by the type of claim, but at a minimum, the evidence must be what the company states it has. For instance, if an ad states that "Four out of five pediatricians recommend our vitamins," the support might consist of a reliable and competent survey that substantiates the claim. Studies and tests must use methods accepted by experts as accurate, and those reviewing the evidence should be qualified to perform the evaluation. The FTC does not have to prove that the advertising was intentionally deceptive or that the company was aware that its claims were untrue.
Ads Most Scrutinized by the FTC
Although the FTC can examine any type of claim, it tends to pay the most attention to advertising that makes claims about safety or health, or those that would be difficult for a consumer to evaluate without assistance. For example, an advertisement assuring consumers that a certain type of sunglasses will protect the eyes from damage or an ad claiming that using a particular brand of motor oil will extend the life of a car would receive more attention that an ad claiming that one company's pizza tastes better than another's.
Examples of Deceptive Advertising
It is illegal for a company to advertise its product as someone else's. For example, a company selling replicas of a famous designer's handbags cannot advertise them as the genuine article. A company cannot misrepresent a country of origin or sell a used product as new. It is a violation to represent a product as containing any ingredient that it does not have. An advertiser cannot make misleading or false statements about the products or business practices of another. If an advertised good is available in limited quantities, the advertiser must disclose the limit in the ad; otherwise, he must have sufficient stock to meet reasonable demand.
