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OptiBit | Full Service Advertising Agency has its new offices in Iasi and Bucharest, Romania. The dedicated team of professionals at OptiBit develop highly integrated cross-platform/media solutions for clients around the globe.
What truth-in-advertising rules apply to advertisers?
- Advertising must be truthful and non-deceptive;
- Advertisers must have evidence to back up their claims; and
- Advertisements cannot be unfair.
Additional laws apply to ads for specialized products like consumer leases, credit, 0900 telephone numbers, and products sold through mail order or telephone sales. There are consumer protection laws that govern ads running in Romania.
What makes an advertisement deceptive?
An ad is deceptive if it contains a statement – or omits information – that:
- Is likely to mislead consumers acting reasonably under the circumstances; and
- Is “material” – that is, important to a consumer’s decision to buy or use the product.
What makes an advertisement unfair?
An ad or business practice is unfair if:
- it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid; and
- it is not outweighed by the benefit to consumers.
What kind of evidence must a company have to support the claims in its ads?
Before running an ad, it has to have a “reasonable basis” for what it claims. That means objective evidence that supports the claim. The kind of evidence depends on the claim. At least, an advertiser must have the level of evidence that it says it has. For example, the statement “Two out of three doctors recommend ABC Pain Reliever” must be supported by a reliable survey to that effect. Ads that make health or safety claims must be supported by tests, studies, or other scientific evidence that has been evaluated by people qualified to review it. In addition, any tests or studies must be conducted using methods that experts in the field accept as accurate.
Are letters from satisfied customers sufficient to substantiate a claim?
No. Statements from satisfied customers usually are not sufficient to support a health or safety claim or any other claim that requires objective evaluation.
What penalties can be imposed against a company that runs a false or deceptive ad?
The penalties depend on the nature of the violation. The remedies that 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.
- Civil penalties, consumer redress and other monetary remedies. Civil penalties range from thousands to millions, 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.
What can my company do if a competitor is running an ad that I think is deceptive?
- Explore your legal options that protect businesses from unfair competition.
- File a complaint with the National Authority for Consumer Protection in Romania or a similar authority in your country, if your competitor’s ad is running nationally or regionally. It investigates allegations of deceptive advertising and gives advertisers a mechanism for resolving disputes voluntarily.
- 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.
Are there limits on where ads for alcoholic beverages can run and what they can say?
Like ads for all other products, ads for alcoholic beverages must be truthful and any claims must be substantiated. In addition, alcohol ads by their content or placement may not be directed to underage consumers. Some broadcasters and publishers place additional restrictions on where or when alcohol ads can run.
Bait and Switch Advertising
It’s illegal to advertise a product when the company has no intention of selling that item, but instead plans to sell a consumer something else, usually at a higher price.
What's our responsibility for ensuring the accuracy of what's in a catalog of products manufactured by other companies?
Rather than just repeating what the manufacturer says about a product, catalog marketers – including companies with online catalogs – should ask for material to back up the claims. If the manufacturer doesn’t come forward with proof or turns over questionable material, a catalog marketer should see a yellow “caution light.” This is especially true for products with extravagant performance claims, health or weight loss promises, earnings guarantees, and the like. In writing ad copy, catalogers should stick to the claims that can be supported and avoid embellishing manufacturers’ representations. Most importantly, catalog marketers should trust their instincts when a product sounds too good to be true.
What standards do apply when evaluating claims in ads aimed at children?
We pay particular attention to ads aimed at children because children may be more vulnerable to certain kinds of deception. Advertising directed to children is evaluated from a child’s point of view, not an adult’s.
How we evaluate claims for "health foods," vitamins, dietary supplements, and similar products?
Claims for dietary supplements and similar products must be truthful and advertisers must have substantiation for any objective product claims they make.
How prominent does a disclaimer or disclosure have to be in other kinds of ads?
When the disclosure of qualifying information is necessary to prevent an ad from being deceptive, the information should be presented clearly and conspicuously so that consumers can actually notice and understand it. A fine-print disclosure at the bottom of a print ad, a disclaimer buried in a body of text unrelated to the claim being qualified, a brief video superscript in a television ad, or a disclaimer that is easily missed on a website are not likely to be effective. Nor can advertisers use fine print to contradict other statements in an ad or to clear up misimpressions that the ad would leave otherwise. To ensure that disclosures are effective, advertisers should use clear and unambiguous language, place any qualifying information close to the claim being qualified, and avoid using small type or any distracting elements that could undercut the disclosure. Although there is no hard-and-fast rule about the size of type in a print ad or the length of time a disclosure must appear on TV, a disclaimer or disclosure should not be too small, flash across the screen too quickly, be buried in other information, or is otherwise hard for consumers to understand. Most importantly, if you are concerned that a disclaimer or disclosure may be necessary to clarify a claim, evaluate your ad copy and substantiation carefully to ensure that you are not misleading consumers.
Are there any rules on how endorsements may be used in ads?
All endorsements must reflect the honest experience or opinion of the endorser. Endorsements may not contain representations that would be deceptive, or could not be substantiated, if the advertiser made them directly.
- Endorsements by consumers must reflect the typical experience of consumers who use the product, not the experience of just a few satisfied customers. If an endorsement doesn’t reflect users’ typical experience, the ad must clearly disclose either what consumers can expect their results to be or the limited applicability of the endorser’s experience. Saying “Not all consumers will get these results” or “Your results may vary” is not enough.
- Endorsements by celebrities must reflect the celebrity’s honest experience or opinion. If the endorsement represents that the celebrity uses the product, that celebrity actually must use the product. Once a celebrity (or expert) has endorsed a product, the advertiser has an obligation to make sure the endorsement continues to reflect the endorser’s opinion.
- To give an expert endorsement, a person must have sufficient qualifications to be considered an expert in the field. But just being an expert isn’t enough. Expert endorsements must be supported by an actual evaluation, examination, or testing of the product that other experts in the field normally would conduct to support the conclusions in the endorsement.
Advertisers also must disclose any material connection between a person endorsing a product and the company selling the product. A “material connection” is defined as a relationship that might affect the weight or credibility of the endorsement. For example, if an endorser is an employee or relative of the advertiser, that fact must be disclosed because it is relevant to how much weight a consumer would give to the endorsement. Similarly, an advertiser must disclose if a consumer has been paid for giving an endorsement.
When can a company advertise something as "free"?
When a “free” offer is tied to the purchase of another product, the price of the purchased product should not be increased from its regular price. In addition, if you’re advertising a product as “free” or offering it at a low cost in conjunction with the purchase of another item, the ad should clearly and conspicuously disclose the terms and conditions of the offer. Disclose the most important information – like the terms affecting the cost of the offer – near the advertised price.
What are the rules on advertising rebates to consumers?
Ads that include rebate promotions should prominently state the before-rebate cost, as well as the amount of the rebate. Only then will consumers know their actual out-of-pocket cost and have the information they need to comparison shop. Rebate promotions also should clearly disclose any additional terms and conditions that consumers need to know, including the key terms of any purchase requirements, additional fees, and when consumers can expect to receive their rebate.
Is advertising on the Internet subject to the same laws as other advertising?
Yes. Ad claims on the Internet must be truthful and substantiated. Online advertisers need to make sure that any disclaimers and disclosures in online ads are clear and conspicuous. It addresses ‘Net specific issues such as banner ads, pop-up windows, scrolling, hyperlinks, etc.
Is it okay for a company to "dry test" a product?
“Dry testing” describes the practice of placing an ad for a product to see if there is sufficient consumer interest before actually going to the expense of manufacturing the item. Such ads must clearly disclose to consumers the fact that the merchandise is only planned and may not ever be shipped.
When can a company advertise a product as "new"?
The answer depends on how the ad uses the word “new.” For example, under the rules governing the identification of textiles, fabric cannot be advertised as “new” if it has been reclaimed or respun. The rules governing advertising claims for tires prohibit the use of the word “new” to describe retreads. However, when no specific regulation applies, each case must be considered within the context of the ad. At least a six-month limit on the use of the word when advertising the introduction of a “new” product not previously on the market.
What responsibility does a company have to make sure that prices are accurate?
In many jurisdictions, companies are legally required to charge no more than the advertised or shelf price for a product, so good pricing practices are important for both customer satisfaction and a company’s bottom line.
Is it legal to use subliminal advertising techniques?
It would be deceptive for marketers to embed ads with so-called subliminal messages that could affect consumer behavior. However, most consumer behavior experts have concluded that such methods aren’t effective.
How are regulated the ads for cigarettes, cigars, and smokeless tobacco?
The law is applied if an ad for cigarettes, cigars, or a smokeless tobacco product is deceptive or unfair In addition, the law prohibits the advertising of cigarettes, smokeless tobacco, and little cigars on radio, TV, or other forms of electronic media, also enforces various requirements mandating health warnings on advertising, point of purchase displays, and packaging of tobacco products.