Fact Check – Vendor Claim Standards

The first post in the Fact Check category covered the motivation and goals for creating a category of posts that will evaluate vendor, and enthusiast, claims related to performance parts and services.

This post will cover some of the standards that will be referenced when evaluating vendor claims. Identifying these standards will help with assessing how well vendors are meeting the expectations of trade governing agencies.

The United States Federal Trade Commission Truth in Advertising guidelines are a good reference for evaluating vendor advertising material and claims.

The guidelines from the FTC help vendors to understand what is expected of them when they are deciding what content to include in their advertising, and what they should not be putting in their advertisements.

In a future post I will look into the standards Canada has for Canadian vendors and those doing business in Canada, I will also look into advertising standards that exist in the UK.

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The FTC advises:

When consumers see or hear an advertisement, whether it’s on the Internet, radio or television, or anywhere else, federal law says that ad must be truthful, not misleading, and, when appropriate, backed by scientific evidence.

Federal Trade Commission

I’ve added the emphasis that these guidelines are United States Federal Law.

The FTC states in Advertising and Marketing Basics:

Under the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based.

Federal Trade Commission

From the FTC guidance on internet advertising:

Advertising must tell the truth and not mislead consumers. In addition, claims must be substantiated.

ADVERTISING AND MARKETING ON THE INTERNET: RULES OF THE ROAD

Getting into some details:

The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair acts or practices. In interpreting Section 5 of the Act, the Commission has determined that a representation, omission or practice is deceptive if it is likely to:

mislead consumers and

affect consumers’ behavior or decisions about the product or service.

More:

The FTC Act prohibits unfair or deceptive advertising in any medium. That is, advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that’s not true.

In addition, claims must be substantiated, especially when they concern health, safety, or performance. The type of evidence may depend on the product, the claims, and what experts believe necessary. If your ad specifies a certain level of support for a claim – “tests show X” – you must have at least that level of support.

Sellers are responsible for claims they make about their products and services.

Advertising agencies or website designers are responsible for reviewing the information used to substantiate ad claims. They may not simply rely on an advertiser’s assurance that the claims are substantiated. In determining whether an ad agency should be held liable, the FTC looks at the extent of the agency’s participation in the preparation of the challenged ad, and whether the agency knew or should have known that the ad included false or deceptive claims.

To protect themselves, catalog marketers should ask for material to back up claims rather than repeat what the manufacturer says about the product.

Disclaimers and disclosures must be clear and conspicuous. That is, consumers must be able to notice, read or hear, and understand the information. Still, a disclaimer or disclosure alone usually is not enough to remedy a false or deceptive claim.

Testimonials and Endorsements

Testimonials and endorsements must reflect the typical experiences of consumers, unless the ad clearly and conspicuously states otherwise. A statement that not all consumers will get the same results is not enough to qualify a claim. Testimonials and endorsements can’t be used to make a claim that the advertiser itself cannot substantiate.

Summary of key points:

• Ads must be truthful, not misleading, and when appropriate, backed by scientific evidence.
• Claims must be substantiated, especially when they concern performance.
• If a consumer is mislead, affecting their decision about a product or service, deception has occurred.
• A claim can be misleading if relevant information is left out or if the claim implies something that’s not true.
• Sellers are responsible for claims they make about their products and services.
• Catalog marketers should ask for material to back up claims rather than repeat what the manufacturer says about the product.
• A disclaimer or disclosure alone usually is not enough to remedy a false or deceptive claim.
• Testimonials and endorsements can’t be used to make a claim that the advertiser itself cannot substantiate.