In a new initiative, dubbed “Operation Full Disclosure,” the Federal Trade Commission sent warning letters to more than 60 companies the agency claimed did not make adequate disclosures in either print or television ads. The recipients of the letters tucked their disclosures away in fine print or otherwise made them easy to miss and hard to read, even though they had important information for consumers, the agency said. The letters identified a broad array of disclosure failures in products and services ranging from food and drugs to consumer electronics to personal care products, household items, and weight loss products.
Twenty of the 100 largest advertisers in the country were among the recipients, the agency said, but did not disclose the identity of the companies involved.
Disclosures in print advertisements should appear in a font that is easy to read and in a shade that stands out against the background, the FTC said. They should not be hidden or buried, but located close to the claims to which they relate. Disclosures for television ads should be on screen long enough to be noticed, read, and understood, without being obscured by other elements of the commercial.
Some of the problematic ads quoted the price of a product or service, for example, but failed to disclose the necessary conditions to obtain that price or that automatic billing was required. Other advertisements failed to disclose that an additional product or service must already be owned before the product advertised could be used.
Advertisements claiming a unique or superior product did not adequately disclose how the advertiser defined the category or the basis of the comparison, while “risk-free” or “worry-free” trial period claims cited in some letters failed to disclose that consumers had to pay for certain expenses, such as initial or return shipping.
The agency also targeted weight-loss ads featuring testimonials with “outlier results” that did not adequately disclose the amount of weight loss consumers could generally expect to achieve. Some ads failed to disclose that a product demonstration had been materially altered. Finally, some companies were told that their contradictory disclosures could not cure the false claims made in their ads.
The letters advised recipients to review all of their advertising to ensure that any necessary disclosures were truly “clear and conspicuous” and stood out in the ads without consumers having to conduct a search.
To read the FTC’s press release about Operation Full Disclosure, click here.
Why it matters: Operation Full Disclosure focused exclusively on print and television ads, but it seeks to achieve goals similar to those achieved with the release of last year’s updated Dot.Com Disclosures. “Consumers depend on information in advertising to make their buying decisions – whether it’s computers or cleaning products, televisions or tools, hotel rooms or hair care,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a press release about the operation, which noted that the response to the letters has been “extremely positive.” The agency added that “advertisers who did not receive a letter should not assume that their advertisements are fine,” so marketers may want to review their disclosures to ensure compliance with the FTC’s “clear and conspicuous” standard.