Labor laws are passed and amended in every state and every nation for the protection of the rights of human beings in their ability as workers, wage earners or members of the work force. Classification of workers varies extensively depending on the type of industry that is being covered. However, there are some universal practices that apply no matter what industry you fall under like minimum wage, good working conditions, fair labor practices for women and children and the likes.
The advertising industry is no exception to this. One of the things that distinguish the advertising industry from other forms of businesses is that it actually is part and parcel of every other business endeavor. And since the advertising industry uses more mediums than any other industry, it also has the widest range of labor workforce and falls under all legislation dealing with human labor.
Laws governing advertising differ depending on the media used. The Internet currently has the widest reach of all. Due to the flexibility of this medium to host video, text, audio, pictures and others, it is doubly important that they implement rules to ensure that consumer protection.
Sellers are responsible and accountable for the claims made by the services or products they present. Liabilities are not however limited to them. Third parties such as marketers, website designers and advertising agencies are liable for making false statements. Advertising must not mislead and claims must be substantiated is the basic premise to follow.
Advertisements on the Internet are subject to the same laws as traditional advertising. All claims made on Internet advertisements have to be substantiated and truthful. Advertisers also need to be aware of privacy issues in internet marketing. The FTC encourages marketers and companies to implement four fair information practices:
1) Give consumers notice about the website’s information practices
2) Offer consumers the choice as to how their identifying information can be used by the website
3) Provide consumers with access to the private information the website collected about them
4) Ensure the security of all private information collected
Marketers also need to be aware of the Children’s Online Privacy Protection Act, which requires verifiable parental consent before using, collecting, or disclosing any personal information about minors.
Ad agencies behind infomercials must need proof that will back up all implied and express claims made by the advertisement about the product. Besides that, the infomercial must not deliberately copy the format of talk shows, news reports, or other independent programs. The FTC also requires that the ad agencies disclose that the program is a paid advertisement during the start of the infomercial and before the ordering information is shown. Since most infomercials feature endorsements from experts and consumers, the FTC also has regulations about the use of endorsements and testimonials. Should the infomercial fail to comply with the FTC’s regulation, the manufacturer and marketer are both held liable.
The Federal Trade Commission Act can impose the following penalties on a deceptive ad, depending on the nature of the violation.
Cease and desist. This legally-binding order requires the company to stop running the ad and/or the practice, to pay a fine of $11,000 per day if the company violates the law, to have substantiation for any claims made in future ads and to report these to the FTC.
Civil penalties. This can range from thousands to millions of dollars, depending on the violation. Some advertisers give partial or full refunds to those who purchased their product.
Corrective advertising. Advertisers are required by the law to take down the new ad, correct the misleading information, notify consumers about the deceptive claims, and include disclosures in future ads.
E-mail is a cheap and quick way to promote a product or services, but advertisers should remember that the claims they make for the product or the service must be truthful. This includes honoring any promises made to remove subscribers from their mailing list.
If the e-mail claims that the person can unsubscribe and no longer receive any future messages by following instructions like “click here to unsubscribe”, all removal options must work as claimed. This means that the process of unsubscribing must successfully work. All removal claims in the email must be reviewed to make sure that any representations being made is complied with. If the e-mail includes a hyperlink to unsubscribe, the hyperlink should be accessible and functional. If the individual needs to contact an e-mail address to unsubscribe, the address must be able to receive removal requests.
Advertisers need to inform consumers about all the claims the ad conveys. When claims are being identified, the advertiser should single out not just individual statements, but also the ad as a whole, including the copy, product name and description. If the ad makes any misleading claims without qualifying information, this information needs to be disclosed. The advertisers need to determine which claims need to be qualified and which should be provided in disclosure. All disclosed information must be clear and conspicuous to keep the ad from being misleading.
The function of disclosures is to put limits on a claim in an advertisement. Disclosures cannot fix false claims. If the disclosure contradicts the claim made in the ad, it’s not enough to keep the ad from being deceptive; the claim itself must be changed.
CAN-SPAM stands for Controlling the Assault of Non-Solicited Pornography and Marketing Act. This act establishes laws for those who advertise through e-mail, imposes penalties for spammers and companies who advertise their products in spam mail. CAN-SPAM has the following provisions:
Bans false sender information. The e-mail’s “from” information, including the e-mail address and the domain name, should be accurate and should identify the person or company who sent the email.
Prohibits misleading subject lines about the content of the e-mail.
Requires an opt-out method. A return e-mail address must be provided that allows the recipient to ask the company to not send any more e-mails to that address.
Requires the e-mail to identify itself as an advertisement or solicitation. It should also include the physical postal address of the company.
The Internet provides unprecedented opportunities for the collection and sharing of information
from and about its consumers. But recent studies show that consumers have very strong concerns about the security and confidentiality of their personal information in the online marketplace. Many consumers also report being doubtful of engaging in online commerce, in part because they fear that their personal information can be misused.
These consumer concerns present an opportunity for you to build on consumer trust by implementing effective voluntary industry-wide practices to protect consumers’ information privacy. The FTC has held a number of workshops for industry, consumer groups and privacy advocates to explore industry guidelines to protect consumers’ privacy online.
(Source:FTC.gov)
The Franchise and Business Opportunity Rule strictly requires franchise and business opportunity sellers to give and inform its consumers a detailed disclosure document at least 10 days before the consumer pays any money or legally commits to a purchase. The document must include:
- the names, addresses, and telephone numbers of other purchasers;
- a fully-audited financial statement of the seller;
- the background and experience of the business’s key executives;
- the cost of starting and maintaining the business;
- the responsibilities of the seller and purchaser once the purchase is made.
Moreover, companies that make earnings representations must give consumers the written basis for their claims, including the number and percentage of owners who have done at least as well as claimed.
(Source:FTC.gov)