In a competitive marketplace, you need effective marketing and advertising to build your brand, but how do you know when you’ve crossed the line from a persuasive campaign to one deemed deceptive? With the Federal Trade Commission (FTC) and state attorneys general continuing to step up oversight and enforcement activity, at times working together, just a single claim of deceptive and unfair marketing practices can have enormous consequences for your business.
We work proactively with clients to assess risk in their advertising and marketing campaigns, catching potential missteps before they reach the customer or, worse, a regulator. As former consumer protection regulators ourselves, our legal team knows precisely what to look for and can identify issues that only a trained “former regulator eye” will spot.
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From entrepreneurial startups to Fortune 50 companies, our clients operate in highly regulated industries, including financial services, healthcare, automotive, home services, direct-to-consumer marketing, charitable contributions, and more. We work with manufacturers and service providers, advertising agencies, direct marketing and promotion firms, lead generators, and teleservice companies.
We also understand – perhaps better than most – the importance of maintaining positive working relationships with the agencies that regulate our clients. We interact daily with federal and state agencies on behalf of our clients, representing their interests and providing regulatory feedback. We closely monitor enforcement activity and analyze trends to inform our clients’ campaigns, arming them for success against an evolving regulatory landscape that varies state by state.
A primary focus of advertising and marketing laws is to ensure that the practices used by businesses to promote their products and services deliver fair, transparent interactions with consumers. These laws aim to strike a balance between allowing a company to effectively communicate its offerings and protecting consumers from deceptive acts or practices, whether intentional or not. Rules against deceptive marketing apply not only to the companies selling their products and services, but also to the agencies, web designers, contact centers, and other vendors hired to provide marketing services on their behalf.
“Deception” can appear in many forms. It can be an outright untruth or information that is simply misleading. It can be burying important information in the fine print, making opt-out features hard to find, or failing to provide required disclosures upfront. A company can also find itself in trouble if what it claims is exaggerated or not adequately substantiated. Advertising statements regarding a product’s makeup, efficacy, or performance must always be supported by well-founded research, data, or certification.
While these basic principles may seem obvious, there are additional complexities to complying with consumer protection laws. There are industry and product-specific rules that may also apply. For example, there are marketing regulations that are specific to health-related product claims. In this area, the FTC works in coordination with the Food and Drug Administration (FDA) to protect consumers.
As a company experiments with new marketing practices and technology, new challenges and questions can be raised about these laws apply. It can also be difficult for business management to know the ins and outs of what is happening on the ground to ensure that compliance policies are consistently being followed. Experienced counsel can help you develop the protocols and practices to safeguard against missteps. They can also train your marketing team on how to identify issues and correct them before a campaign is launched.
One of the most challenging aspects of marketing and advertising law is its subjective nature. It can take a well-trained eye to spot issues and identify the risk associated with each issue. That’s why it’s important to work with legal counsel that has deep experience across all forms of media, applies a nuanced understanding of how regulators interpret these laws, and has their finger on the pulse of enforcement trends.
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Our clients turn to us for a full range of legal services that cover all facets of Advertising & Marketing compliance and litigation, including the following:
Compliance Analysis of Advertising & Marketing Materials
We review content for advertising and marketing collateral across all media, including but not limited to advertising campaigns, sales scripts, websites, social media, sweepstakes, warranties, and disclosures.
Claim Substantiation
We evaluate product and service claims – both express and implied – to provide the strongest competitive positioning while maximizing defendability against legal or regulatory challenges. The line between effective marketing and regulatory tripwire can be difficult to see. We can show you where it lies.
Consumer Complaint Response
We advise clients in all aspects of consumer complaint handling to minimize the possibility of a governmental investigation or lawsuit. Consumer complaints are often the canary in the coalmine, offering an opportunity to remedy potential issues before they catch the attention of a regulator.
Defense of Class Action & Individual Lawsuits
We defend class action and individual lawsuits involving Unfair & Deceptive Acts or Practices (UDAP) and other consumer protection laws, achieving optimal outcomes for clients that include case dismissals, investigation closures with no action, and favorable pre-litigation settlements. With decades of experience on both sides of these laws, we have built a successful track record both inside and out of the courtroom.
State & Federal Investigations
We manage responses and resolve investigations brought by the FTC, Federal Communications Commission (FCC), and state attorneys general. These investigations are sensitive and complex, requiring a steady and experienced hand to communicate with regulators and guide matters to a favorable outcome.
Due Diligence & Third-Party Agreements
We evaluate and mitigate the regulatory compliance risks presented by vendors and other third-party partnerships, protecting businesses from potential liability resulting from the actions of these parties.
Regulatory Advocacy
We advocate for clients’ interests in matters involving the FTC, FCC, Consumer Financial Protection Bureau (CFPB), and other federal and state regulators. This includes filing administrative petitions or comments on behalf of our clients and meeting with regulatory agencies.
In general, regulators aim to protect consumers by ensuring that sellers are honest and clear in advertisements. This provides individuals with the information they need to make informed buying decisions. Certain disclosures of information are often necessary when marketing to consumers. For example, communication of special offers must include exclusions and any limitations.
Be ready to back up what you say, especially when making claims about safety, performance, the environment, or health-related topics. Focus on what a reasonable consumer would believe you to be claiming, expressly or by implication. If challenged by a regulator or competitor, you will be held to those claims and expected to support them with appropriate data.
The Children’s Online Privacy and Protection Act (COPPA) regulates how businesses collect personal information from individuals under 13 years of age. Implemented by the FCC, COPPA is intended to give parents control over what information is collected from their young children online. Any website directed to children under 13 years of age must comply with COPPA. Likewise, any website directed to a general audience that collects information that establishes a visitor is under 13 must also comply with COPPA.
Dark patterns are attempts by online sellers to manipulate or deceive consumers into buying products or services or giving up their privacy. These tactics – which include hard-to-cancel subscriptions, buried terms and fees, disguised ads, and tricks to obtain personal information – rely on consumer cognitive biases and the limits of human psychology rather than providing clear, upfront, user-friendly information. The FTC is the primary federal regulator for enforcement of dark pattern practices, assessing steep penalties that have reached $100 million.
Marketers who advertise discounts and special prices must be careful not to run afoul of the FTC and state deceptive pricing rules. Deceptive practices include, among others, “bait & switch” offers, misleading price comparisons, and falsely advertising that products are on sale or that a price is reduced or offered for a limited time only when this is untrue. In addition, the terms and conditions of any offer should be disclosed clearly and conspicuously in advertising.
Endorsements have to be forthcoming, not deceptive. An advertisement must disclose information that consumers need to be able to evaluate the endorsement if that information is not obvious. For example, a marketer must disclose if a review is incentivized or written by an employee.
Any kind of representation that a product is free is subject to scrutiny. The conditions for which a consumer would receive the product for free must be clear and conspicuous so as not to mislead.
Businesses are often understandably proud to sell products with one or more components that are made in the United States. But the FTC’s standard for USA-origin marketing claims and product labels is a high bar. We can help you determine if your Made in USA claim is compliant.
Marketing campaigns often involve the collection of personal consumer information. It’s imperative to make sure that your practices for collecting, storing, and using this data are compliant with federal, state, and (if appropriate), global privacy regulations and best practices.
