The Federal Trade Commission governs all marketing practices in the United States, whether online or off. Businesses of all sizes must abide by the Federal Trade Commission Act, which prohibits “unfair and deceptive marketing.” Failure to comply with the FTC’s requirements can result in large fines.
This FTC cheat sheet will help merchants and marketers stay up to date on the laws that most closely affect their day-to-day business. If you have more immediate questions about FTC compliance or investigations, please get in touch.
FTC RULES: 35 ONLINE MARKETING DON’TS
- Don’t make false claims in promotional materials, or on websites and labels.
- Don’t make unsubstantiated scientific claims.
- Don’t label something “organic” or “all-natural” if it isn’t. (Follow the Nutrition Labeling and Education Act, in addition to the Dietary Supplement Health and Education Act.)
- Don’t frame atypical product results as typical (we’re looking at you, weight loss product sellers).
- Don’t say a product will cure cancer or another serious disease.
- Don’t say a product will reduce cancer or another serious disease.
- Don’t try to use implicit – as opposed to explicit – language to convey an unsubstantiated scientific claim; in the FTC’s eyes, vague and suggestive language is just as dangerous as inaccurate medical claims.
- Don’t use fake news sites.
- Don’t pay for online reviews.
- Don’t use gag clauses to prevent negative online reviews.
- Don’t use negative-option tactics during the checkout process to trick people into signing up for recurring billing scams.
- Don’t disguise advertisements as content.
- Don’t give away customer data in exchange for “bounties” — or material compensation — without getting permission from the customer.
- Don’t disguise post-transaction add-ons as part of a deal (upsells are fine; just make sure you disclose clearly before charging).
- Don’t charge credit cards without first collecting billing addresses.
- Don’t deploy deceptive, data-collecting pop-up ads onto people’s computers.
- Don’t exaggerate the wealth-building potential of bizopps.
- Don’t send promotional text messages without prior permission. (Adhere to the Can-SPAM and TCPA Acts.)
- Don’t fail to disclose material relationships in endorsements.
- Don’t send users on a link chase, in an attempt to confuse and cheat them out of money.
- Don’t use blockable pop-up disclosures.
- Don’t design a webpage, with lots of white space, as a way to obscure disclosures.
- Don’t hide text disclosures.
- Don’t hide disclosure links.
- Don’t make users scroll to find a disclosure.
- Don’t use incredibly small type for a disclosure.
- Don’t forget to use an #ad, #paid, #spon hashtag when marketing on social media.
- Don’t let incentivized reviewers not disclose that fact in their reviews. (NOTE: Amazon recently changed its rules; incentivized reviews are no longer allowed on that, particular, platform.)
- Don’t leave affiliate marketers to their own devices; brands are responsible for the marketing actions of all freelance promoters.
- Don’t start a matrix (a.k.a., multi-level) marketing scheme.
- Don’t abandon a crowdsourced project, and then abscond with the money.
- Don’t engage in price anchoring (i.e., advertising an inflated original sales price to give the illusion of a deal).
- Don’t neglect your site’s security; in some instances, the FTC can fine businesses that GET hacked.
- Don’t open a business under a family member’s name after losing an FTC investigation and case.
- Don’t play loosey-goosey with user data (a.k.a., personally identifiable information); adhere to privacy parameters outlined in the Fair Credit Reporting Act, Gramm–Leach–Bliley Act, Restore Online Shopper’s Confidence Act, Consumer Review Fairness Act, Health Insurance Portability and Accountability Act, and Children’s Online Privacy Protection Act.
Additional Legal Resources for Brands, Sellers, and Marketers
The above list is fairly comprehensive but certainly not exhaustive. Since every case is different, we have provided additional links and information for marketers in specific niches.
Are you in the e-medical development business? You’re in luck because the FTC developed an automated tool to test the compliance rating of e-medical apps.
The FTC takes COPPA rules very seriously and doles out hefty fines to infringing parties. Familiarize yourself with COPPA standards, doing so could save you millions.
Turn-key operations (a.k.a.,
The bottom line is simple: Don’t collect user data without permission, and whatever you do, don’t sell or exchange it without permission. Click here to read more about FTC rules related to the data brokering compliance.
FTC Rules Blog: Keep Current with Advertising and Marketing Legal News
Reading about the latest case studies and legislative updates is an excellent way to wrap your head around FTC rules. To that end, below are recent posts from our advertising and marketing blog. Dive in!
FTC RULES: Need Assistance?
Ready to consult with an attorney who helps with FTC defense and compliance issues? Good, because we’re ready to lend a hand!