By UpCounsel Attorney Seth Heyman
Any company that advertises a product or service using email, internet, telemarketing, print, TV or radio should have at least some familiarity with the most important advertising statutes, many of which are enforced by the Federal Trade Commission, the primary agency in charge of federal advertising law. The FTC (and to a lesser extent, the Federal Communications Commission, or FCC) creates and enforces rules that advertisers have to follow to comply with the law.
Taking the time to understand how these statutes and rules might affect your business will help avoid costly mistakes. Rest assured, regulators will not hesitate to impose hefty fines for violations – up to $16,000 for each one. Regulators will not hesitate to impose hefty fines for violations – up to $16,000 for each one.
1.) Section 5 of the Federal Trade Commission Act
Section 5 prohibits advertisers from engaging in unfair or deceptive acts or practices in interstate commerce. Basically, advertising must be truthful, fair and substantiated. According to the FTC, an ad is deceptive if it contains a statement or omits information that (a) is likely to mislead consumers acting reasonably under the circumstances and (b) is “material” in that it influenced a consumer’s decision to buy.
2.) The Telephone Consumer Protection Act of 1991
The TCPA restricts telemarketers from calling residential numbers unless “the telemarketer has instituted written policies and procedures for maintaining a Do-Not-Call list for subscribers who request not to receive further solicitations.” The TCPA also regulates and limits the use of automated dialing equipment and fax broadcast devices. Congress mandated that the FCC also develop regulations implementing the TCPA.
3.) The Telephone Disclosure and Dispute Resolution Act of 1992
This law requires the FTC to enact and enforce certain regulations regarding advertising and operating for, operation of, and billing and collection procedures for pay-per-call (“900 number”) telephone services. The regulations must include certain provisions, such as price disclosure requirements, mandatory warnings on services directed to children and certain disclosures in billing statements.
4.) The Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994
Under this law, the FTC developed additional regulations to prevent telemarketers from employing practices that a reasonable consumer would consider coercive or abusive of their right to privacy. These rules establish restrictions on the hours during which unsolicited telephone calls can be made to consumers, for example, and establish how disclosure of these rules must be made. There are laws that establish restrictions on the hours during which unsolicited telephone calls can be made to consumers.
5.) The FTC’s Telemarketing Sales Rule
The TSR implements the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994. After undergoing several amendments, the TSR (among other things) helped create the FTC’s Do-Not-Call program; mandated a 3 percent abandonment rate for predictive dialers, severely restricted the use of prerecorded marketing messages and mandated that all telemarketers transmit Caller ID information.
6.) The Do-Not-Call Registry Act of 2003
This law created the federal “DNC” List to better facilitate compliance with the TCPA. Both the FTC and the FCC enforce the Act. Placing one’s number on the National Do-Not-Call Registry will stop most, but not all, unsolicited calls. The DNC Registry Act was strengthened in 2007 by allowing consumers to register only once to maintain their phone numbers on the registry indefinitely.
7.) The CAN-SPAM Act
The CAN-SPAM law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them and spells out tough penalties for violations. The Act isn’t limited to unsolicited spam e-mails; it applies to all commercial e-mail messages that promote a product or service, including email that promotes content on commercial websites. The law makes no exception for business-to-business email. This means that all email – even messages to existing customers – must comply with the law. For additional guidance on complying with CAN-SPAM Act, click here. The CAN-SPAM law gives recipients the right to have you stop emailing them and spells out tough penalties for violations.
8.) The Children’s Online Privacy Protection Act
COPPA applies to the online collection of personal information from children under 13. It also sets forth rules enforced by the FTC that spell out what a website operator must include in a privacy policy, when and how to seek verifiable consent from a parent, and what responsibilities an operator has to protect children’s privacy and safety online. You must comply with COPPA if you operate a commercial website or an online service directed to children under 13 that collects personal information from children, or if you operate a general audience website and have actual knowledge that you are collecting personal information from children.
The Takeaway
One thing you can do is check out a useful guide for businesses published by the FTC. It provides further details on how to comply with the laws mentioned above.
And if you’re considering any marketing campaign that might cross state lines, you should also consult with an attorney who specializes in advertising law to help fine-tune your campaign before you launch it. After all, what good is a successful marketing campaign if you can’t keep the money you make?
