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Complying With The FTC

These rules are applicable to all forms of communication, from print advertising to live demonstrations. Since the dawn of the Internet Age back around 1994, over 100 legal actions have been taken against on-line businesses allegedly engaged in “unfair or deceptive acts or practices.” FTC issues rules, which are clear prohibitions against these acts, and guidelines, which are examples designed to help netpreneurs such as yourself in complying with FTC rules.
Fair Play

The three basic principles of advertising law are no doubt familiar to you, but they bear reviewing:

• Ads must be truthful and contain no misleading material

• The advertiser must provide evidence, or “substantiation” of any claims

• Ads must meet a test for fairness.


Whether you write your own ad copy or hire a professional, you should readily be able to identify any claims of product or service benefits and determine if any express (stated) or implied claims might be misconstrued. Any claims that fall into that category require disclosure, or qualifying information.

Disclosures

It may seem unfair to you as an honest merchant or service provider, but legally, you are required to phrase your advertising message in such a way that it absolutely cannot be misconstrued in any way – and failing to do that can leave you or your company liable.

Fortunately, compliance is not difficult. A common way to fulfill this obligation is to use disclaimers such as: “Your results may vary,” or “not proven to work for all situations.” It is however your responsibility to determine (A) which claims may require substantiation, and (B) what information should be included in any disclosure.

Now, it’s important to understand that a disclosure can only qualify a claim or limit it so your potential customer doesn’t receive a misleading impression. It’s not a license to make a false claim. If a disclosure completely contradicts your claim, that claim is false and requires modification.

Beyond qualifying claims about a given product or service, a disclosure is also required in order to provide your potential client about the terms of the transaction.

You’ll see good examples of this if and when you start searching online for paralegal help in incorporating your business. The most reputable firms will have a clear statement on at least one of their web pages (and usually more) that goes something like this:

“Fees listed here are in addition to required state or jurisdiction fees.”

In other words, while they’re shouting to the heavens that “YOU can INCORPORATE in CORPORATE HEAVEN TODAY for only $99.95!” they’re also letting you know beyond all doubt that it will actually cost you more that that.

You now know a bit about how the FTC helps your business stay safe and fair to customers.
 

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