The Federal Trade Commission (FTC) announced on September 23, 2014 that it recently completed a nationwide advertising review that resulted in warning letters to more than 60 advertisers. The review, termed “Operation Full Disclosure” by the FTC, targeted companies that failed to make proper disclosures in their television and print advertisements. In particular, the FTC sought out ads where important information needed to prevent consumers from being mislead was either contained in the fine print or otherwise hard to locate.
The FTC has consistently stated that advertisements must clearly and conspicuously disclose material information to consumers. Simply put, “consumers should be able to notice disclosures easily; they should not have to look for them.”
The FTC provided some examples of targeted conduct:
- Special or discount pricing without disclosing the requirements for receiving the price;
- Failure to disclose automatic billing mechanisms;
- Claims that a product was capable of a certain action without disclosing that an additional accessory must be purchased;
- Claims that a product was unique or superior in a particular category without disclosing the advertiser’s definition of the category;
- Comparative advertising claims without disclosing the basis of comparison; and
- Broad product claims that did not adequately disclose product limitations or exceptions.
For each of these examples, the FTC found that advertisers failed to provide proper disclosures to consumers. In the warning letters, the FTC recommended that each advertiser review its advertising portfolio to ensure compliance and to notify the FTC of what actions the advertiser intended to take to address the concerns.