Antitrust Lawyer Blog Commentary on Current Developments

FTC Warns Advertisers and Media That Ads May Be Deceptive

The Federal Trade Commission (“FTC”) sent letters on September 27, 2006 to 166 advertisers and 77 media outlets warning them that their advertisements targeting Hispanics are potentially deceptive. The ads were spotted during a one-day surf of Spanish-language newspaper, magazine, Internet, radio, and television advertisements by 60 partners around the United States and Latin America, coordinated by the FTC.
On April 19, individuals from across the United States and in five Latin American countries participated in the Hispanic Multi-Media Surf. The participants focused on identifying potentially deceptive ads aimed at Hispanics in three areas: health, credit, and business opportunities.

Of the potentially deceptive ads found by participants during the surf, over half were health-related, and made dubious claims for weight loss products and “disease cures.” The ads claimed treatments and cures for serious diseases, most often diabetes and cancer. More than half of the weight-loss ads contained false “red flag” claims that cannot be supported, according to the FTC. Work-at-home and business opportunity ads with questionable claims represented the second most common type of ads found during the surf. Some advertised get rich quick schemes for at-home craft assembly and envelope stuffing. Many made extravagant earnings claims that the FTC found few, if any, consumers ever achieve. Participants also found credit-related ads offering credit repair and guaranteed credit, among other services.

167 individuals took part in the surf, including staff at the Food and Drug Administration, United States Postal Inspection Service, and Better Business Bureaus, as well as state Attorneys General offices, state and local consumer protection agencies, community-based groups, and university students, among others. Consumer protection agencies in Colombia, Costa Rica, Mexico, Nicaragua, and Panama also took part in the effort.

The FTC sent letters to 166 advertisers informing them that their ad claims may be in violation of the law, and urged them to review their advertising and promotional materials. The letters also strongly recommend that they review business and consumer education materials on the FTC’s Web site to learn more about relevant laws and requirements. The letters to 77 media outlets advised them that they were running potentially deceptive advertising and offers advice to assist them in screening out advertisements that contain questionable claims.

In addition to the letters, the FTC forwarded Internet ads to 10 international law enforcement partners. Those agencies can review the ads, which originated in their country, and take action as appropriate. The surf also provided law enforcement targets for several cases announced by the FTC at the Hispanic Law Enforcement Forum in New York City.

Authored by

Camelia C. Mazard
202-589-1837
cmazard@dbmlawgroup.com