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Seven Rules for Legal Advertising
Be sure you comply with laws against deceptive or misleading advertising.
Advertising is regulated by both federal and state law. Under the law, your ad is unlawful if it tends to mislead or deceive. Your intentions don't matter. If your ad is deceptive, you'll face legal problems even if you have the best intentions in the world. In addition, if your ad contains a false statement, you have violated the law. The fact that you didn't know the information was false is irrelevant.
The Federal Trade Commission (FTC) is the main federal agency that takes action against unlawful advertising. State and local governments also go after businesses that violate advertising laws; usually this is the responsibility of the state attorney general, the consumer protection agency, and the local district attorney. Consumers and competitors may also be able to proceed directly against the advertiser.
The Federal Trade Commission
For the most part, the FTC relies on consumers and competitors to report unlawful advertising. If FTC investigators are convinced that an ad violates the law, they usually try to bring the violator into voluntary compliance through informal means. If that doesn't work, the FTC can issue a cease-and-desist order and bring a civil lawsuit on behalf of people who have been harmed. The FTC can also seek a court order (injunction) to stop a questionable ad while an investigation is in progress. In addition, the FTC can require an advertiser to run corrective ads -- ads that state the correct facts and admit that an earlier ad was deceptive.
Over the years, the FTC has taken action against many businesses accused of engaging in false and deceptive advertising. A significant number of those administrative actions have been tested in court. By and large, courts have upheld even the most stringent FTC policies.
State Laws Against False Advertising
Most states also have laws -- usually in the form of consumer fraud or deceptive practices statutes -- that regulate advertising. Under these laws, state or local officials can seek injunctions against unlawful ads and take legal action to get restitution to consumers. Some laws provide for criminal penalties -- fines and jail -- but criminal proceedings for false advertising are rare unless fraud is involved.
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