You Must Have a Reasonable Basis for Your Advertising Claims
When you prepare your advertisements, you should keep in mind the underlying legal requirement of advertising substantiation. This means that you must have a reasonable basis for your ad claims before they're disseminated.
You should thoroughly familiarize yourself with the FTC Policy Statement Regarding Advertising Substantiation (Appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1984), aff’d, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987).)
And this is true whether you're an advertiser or an advertising agency. And it's true if the product you advertise is food (e.g., health claims), cosmetics, drugs (e.g., doctor recommended claims), or virtually any other product or service. If your product is regulated by the Food and Drug Administration (FDA), you should also familiarize yourself with that agency's rules pertaining to advertising.
The Main Point
The main point is that you need to substantiate (i.e., back up) the claims in your advertisements (utilizing expert testimony, extrinsic evidence, tests, studies, etc.). And this is so whether the type of claim you're making, or plan to make, is express or implied. Yes, you should be aware of what your ad may imply. So review your ads carefully--preferably with a lawyer with expertise in this area--and be sure that you can back up your ad claims.
Several Recent Articles
But learning the policy of the Federal Trade Commission (FTC), while important, is not enough. As an advertiser -- or advertising agency -- you should institute an ongoing advertising substantiation program. Optimally, that should include regular discussions with a law firm that has attorneys who specialize in advertising law. And it should include keeping pace with the many FTC decisions and rulings, court decisions, NAD/NARB self-regulatory rulings, and other important developments. The reference service, Advertising Compliance Service already does exactly that--and has been doing so for all of its 25-year history. This page provides brief summaries of several recent articles that appeared in Advertising Compliance Service and explored this critical advertising substantiation topic, specifically in this publication's Tab #5, Substantiation:
(Tab #5, Substantiation, Article #125):
- "FTC Targets Claims For Pill Advertised To Make Kids Taller."
A business and its owner marketed purported height-enhancing pills for kids and young adults. That business and owner recently agreed to pay $375,000 to settle charges that their advertising claims were deceptive. FTC charged these defendants with making false and unsubstantiated claims for HeightMax, as well as for two other supplements, Liposan Ultra Chitosan Fat Blocker and Osteo-Vite.
(Tab #5, Substantiation, Article #124):
- "Spanish-language Weight-loss Claims Are False And Unsubstantiated: FTC"
FTC charged the sellers of the "Centro Natural de Salud Obesity Treatment" with making false and unsubstantiated claims that their product causes rapid, substantial and permanent weight loss. The "treatment" consists of three different pills, taken with breakfast, lunch and dinner, and a bar of "special soap" to "reduce dress sizes."
(Tab #5, Substantiation, Article #123):
- "Court Orders Defendants To Pay Up To $87 Million In Bracelet Case"
A federal district court ruled in FTC's favor in its case against the marketers of the Q-Ray ionized bracelet following a bench trial earlier this summer. On September 8, 2006, the court found that advertising by a company official and his companies was false and misleading in representing that the bracelet provides immediate, significant, and/or complete pain relief, and that scientific tests proved that it relieves pain.
(Tab #5, Substantiation, Article #122):
- "Large Weight-Loss Marketers Agree To Pay $3 Million"
Sellers making "questionable" weight-loss and fat-loss claims to market skin gels and diet supplements agreed to pay $3 million to settle FTC charges. The settlement bars future unsubstantiated claims and bars the marketers from misrepresenting studies or endorsements.
(Tab #5, Substantiation, Article #121):
- "Can You Prove It?" By Stephen R. Bergerson
[Note: Here is a brief excerpt from that article:]
"The Federal Trade Commission - known to some as the national nanny of advertising - enforces Section 5 of the Federal Trade Commission Act, which prohibits `unfair or deceptive acts and practices in commerce.'
THE DOCTRINE OF SUBSTANTIATION
When creating the Commission, Congress gave it the power to define both `unfair' and `deceptive.' The most far-reaching concept to emerge from the Commission's effort to do that is its Doctrine of Substantiation.
The doctrine emerged in 1971, when the Commission instituted a program that allowed it to require advertisers to submit documentation to support ad claims."
(Tab #5, Substantiation, Article #120):
- "Dietary Supplement Maker Settles FTC Charges"
An operation marketed dietary supplements that were sold at Whole Foods Market, GNC, the Vitamin Shoppe and on the Internet. Garden of Life, Inc. -- a dietary supplement company -- and its founder and owner, Jordan S. Rubin, settled FTC charges that they made deceptive advertising claims about their supplements.
FTC charged that the dietary supplement marketer made unsubstantiated claims that their supplements treated or cured ailments ranging from colds to cancer, and also made false claims of clinical proof.
NOTE: Consent agreements are for settlement purposes only and do not constitute an admission by the defendant of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
JLCom Publishing Co., LLC is the publisher of Advertising Compliance Service. For over 27 years, Advertising Compliance Service has been the authoritative, comprehensive source of information for advertisers and advertising agencies--and their attorneys--in the advertising law area. One of the 27 areas regularly covered by this newsletter/reference service focuses on advertising substantiation.
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