Q: What kind of advertising claims does the FTC focus on?
A: The FTC pays closest attention to:

• ads that make claims about health or safety, such as:

ABC Sunscreen will reduce the risk of skin cancer.
ABC Water Filters remove harmful chemicals from tap water.
ABC Chainsaw's safety latch reduces the risk of injury.

• ads that make claims that consumers would have trouble evaluating for themselves, such as:

ABC Refrigerators will reduce your energy costs by 25%.
ABC Gasoline decreases engine wear.
ABC Hairspray is safe for the ozone.

Ads that make subjective claims or claims that consumers can judge for themselves (for example, "ABC Cola tastes great") receive less attention from the FTC.

Q: What penalties can be imposed against a company that runs a false or deceptive ad?
A: The penalties depend on the nature of the violation. The remedies that the FTC or the courts have imposed include:

• Cease and desist orders. These legally-binding orders require companies to stop running the deceptive ad or engaging in the deceptive practice, to have substantiation for claims in future ads, to report periodically to FTC staff about the substantiation they have for claims in new ads, and to pay a fine of $11,000 per day per ad if the company violates the law in the future.

• Civil penalties, consumer redress and other monetary remedies. Civil penalties range from thousands of dollars to millions of dollars, depending on the nature of the violation. Sometimes advertisers have been ordered to give full or partial refunds to all consumers who bought the product.

• Corrective advertising, disclosures and other informational remedies. Advertisers have been required to take out new ads to correct the misinformation conveyed in the original ad, notify purchasers about deceptive claims in ads, include specific disclosures in future ads, or provide other information to consumers.
  

Q: What can my company do if a competitor is running an ad that I think is deceptive?
A: You can:

• Explore your legal options under federal and state statutes that protect businesses from unfair competition. For example, the Lanham Act gives companies the right to sue their competitors for making deceptive claims in ads.

• File a complaint with the National Advertising Division (NAD) of the Council of Better Business Bureaus, if your competitor's ad is running nationally or regionally. The NAD is a private, self-regulatory group affiliated with the BBB. It investigates allegations of deceptive advertising and gives advertisers a mechanism for resolving disputes voluntarily.

• Call your local BBB or file an online complaint with the Better Business Bureau if the ad is local. Many BBBs have procedures for resolving disputes between businesses.

• Contact the radio station, television station, or publication where the ad ran. Let them know that they're running an ad you think may be deceptive.

• Contact your state Attorney General's Office or your city, county, or state Office of Consumer Affairs. To get their phone numbers, check your telephone directory.

• Contact the FTC. By mail: Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, DC 20580; by telephone: toll-free 1-877-FTC-HELP.

Q: If my company files a complaint about a competitor with the FTC, will the FTC resolve the dispute?
A: The FTC is authorized to act when it appears that a company's advertising is deceptive and when FTC action is in the public interest. Although the FTC cannot intervene in an individual dispute between two companies, the agency relies on many sources - including complaints from consumers and competitors - to find out about ads that may be deceptive. To file a complaint against a competitor who you believe has engaged in false advertising, contact:

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580
Toll-free 1-877-FTC-HELP (382-4357)
Online Complaint Form

Q: Can I find out if the FTC already has an investigation against a company?
A: The FTC can tell you if it has already taken formal action (e.g., filed or settled a lawsuit) against a particular company or against similar kinds of advertisements or products. But the FTC cannot disclose whether an investigation is going on. To find out if a company or product has been the subject of a recent FTC action, search the FTC's website (www.ftc.gov).