15 Sep 23

How the FTC Conducts False Advertising Probes

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Last Updated on: 2nd October 2023, 05:35 pm

How the FTC Conducts False Advertising Probes

The Federal Trade Commission, or FTC for short, is the government agency that enforces truth-in-advertising laws in the United States. Their job is to make sure ads are truthful and not misleading to consumers. This includes ads in newspapers, magazines, online, radio, TV, mail, billboards – basically anywhere you can think of!

When an ad seems fishy or makes claims that don’t seem quite right, the FTC may start an investigation called a “probe” to get to the bottom of it. Probes help the FTC decide if an ad has crossed the line into being illegally false or deceptive. If so, the FTC can take the company to court and make them stop running the ad. They can even make the company pay money back to any customers who were tricked.

The FTC takes false advertising seriously, especially when it comes to stuff that really impacts our lives – like health products, prescription drugs, weight loss supplements, COVID treatments, and so on. Basically anything that seems too good to be true probably is, and will catch the FTC’s attention!

How Does the FTC Start Probes?

The FTC gathers tips about shady advertising from lots of sources:

  • Complaints submitted by consumers on the FTC’s website or hotline
  • Referrals from other government agencies like the FDA
  • Monitoring the marketplace themselves for ads that seem suspicious
  • Tips from consumer advocacy groups and industry competitors

When complaints start piling up about a particular ad campaign, the FTC takes notice. If the issue seems serious enough, they’ll open an investigation.

What Happens in a Probe?

An FTC probe aims to get evidence to determine if an ad campaign is illegally deceptive. Investigators will:

  • Review the ads themselves – print, digital, TV, radio, etc.
  • Interview the company and ad agency behind the campaign
  • Request to see any studies, surveys, or other proof the company has to back up the ad claims
  • Consult with outside experts to assess if the claims are scientifically valid
  • Talk to independent researchers and people in the industry

The FTC will spend weeks or months gathering this info. Their goal is to determine if the advertiser had adequate evidence to make the claims in their ads at the time the ads were created.

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When Do Ads Cross the Line?

There’s no simple answer, but here are some red flags that may lead to an FTC probe and enforcement:

  • “Too good to be true” claims – like miracle cures, instant weight loss, or get-rich-quick schemes
  • Health claims that could impact consumer safety if false
  • Ads aimed at kids, seniors, or other vulnerable groups
  • Claims not backed by scientific proof
  • “Fine print” disclosures that contradict the main ad claims

And of course, outright lying – like making up fake doctor endorsements or research results – is a surefire way to get busted.

What Happens After the Investigation?

If the probe reveals an ad campaign is illegally misleading, the FTC has a few options to make the company pay:

  • Negotiate a settlement requiring the ads to be removed and preventing similar ads in the future
  • File civil charges and take the company to court
  • Refer the case to criminal authorities if fraud is involved

Settlements often include money for refunds to any consumers who were harmed. For example, in 2021 the FTC made Weight Loss Company X refund $20 million to customers after a false advertising probe.

What About Free Speech?

Doesn’t the First Amendment protect advertisers’ right to free speech? Yes, but…

False or deceptive claims are not protected speech. And ads must meet a higher standard than just “not illegal.” The FTC expects claims to be truthful, not misleading, and scientifically backed.

Advertisers do have a right to use creative license and exaggeration (“puffery”) in ads. But there’s still a line. Play it safe by sticking to claims that can be supported!

Takeaway for Consumers

Watch out for ads that seem too good to be true or make bold claims out of nowhere. Check multiple sources before trying a heavily advertised product, especially health or money-related ones. And consider filing a complaint with the FTC if an ad seems fishy – you might help launch the next big false ad probe!