FTC IDs Deceptive Advertising/Marketing Practices as Key Enforcement Target7 May, 2013 By: John Waller, Blank Rome LLP, Jeffrey Richter
In summarizing the achievements of the Federal Trade Commission (FTC) during the past year, Edith Ramirez, the newly appointed chair of the FTC, identified 11 different areas in which the FTC has been, and expects to continue, concentrating its enforcement efforts. One of those areas of concentration is deceptive advertising and marketing practices. As the FTC’s website explains, “Consumers should get what they pay for. The FTC works to ensure that national advertisers can back up the claims they make for their products, especially health and safety claims.”
As examples of its recent enforcement efforts in this area, the FTC’s website identifies the actions it filed against POM Wonderful (false and unsupported health claims for its pomegranate juice and supplements) and Your Baby Can Read (a program that allegedly falsely promises to teach infants and babies to read), as well as the settlements it obtained with Ab Circle Pro (misleading advertising regarding exercise equipment) and Skechers (misleading advertising regarding shoes). The FTC’s website also identifies its cooperation with state consumer protection agencies in targeting get-rich-quick and business opportunity scams under its recently updated Business Opportunity Rule (BOR), as another highlight of its enforcement activities in this area.
The BOR requires business opportunity sellers to provide specific types of information to prospective entrepreneur/investors to assist them in evaluating a business opportunity. It also provides a disclosure form to be used by marketers of business opportunities to inform consumers about some of the specific risks involved.
While the FTC could change its enforcement priorities at any time, over the years it has consistently pursued deceptive advertising and marketing practices as one its primary enforcement targets and shows no signs of changing its priorities. Furthermore, its recent efforts to more aggressively partner with state consumer protection agencies in order to pursue more deceptive advertising and marketing practices may signal the FTC’s intent to share its expertise and to broaden its enforcement impact during a period of federal budgetary constraints.