Watch out for false claims in advertising

By Anthony GiorgianniConsumer Reports

The Federal Trade Commission recently announced that it had sent letters to more than 60 companies, including 20 of the 100 largest advertising firms in the country, warning about missing or hard-to-read disclosures. The agency did not identify the advertisers or the advertised products or services.

But it serves as a good warning for consumers to make sure they’re not duped by some glitzy advertisement for a product or service. The FTC's letters recommend that companies review their ads “to ensure that any necessary disclosures are clear and conspicuous” and inform FTC staff of the actions they plan to take to address the issues.

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Among the concerns, the agency said the ads failed to adequately disclose:

  • That customers needed to buy an additional product or service to obtain an “included” accessory or to use a certain product capability
  • A requirement that customers pay initial or return shipping on products advertised as risk- or worry-free
  • The basis for claiming that a product was unique or superior in its category
  • The conditions for obtaining advertised prices, including automatic billing

The agency also took on ads for weight-loss products. Among the issues, it said that some ads focused on atypical results without disclosing the amount of weight customers actually could expect to lose. The FTC said some ads didn’t properly disclose safety or legal issues with some weight-loss products or services.

Companies that engage in false advertising can face action by federal and state authorities.

In September, the FTC gave final approval to a proposed settlement with the cosmetics maker L’Oréal USA Inc., which the agency accused of making false and unsubstantiated claims that its Génifique and Youth Code products provided anti-aging benefits by targeting users’ genes. Although the L’Oréal did not acknowledge wrongdoing, it agreed, among other things, not to represent that any of its products can boost the activity of genes or target specific genes and, as a result, make skin look or act younger or respond five times faster to aggressors such as stress, fatigue, and aging.

Watch out for deceptive advertising for credit card balance transfers. And don't be mislead by the word "free."

What to do

Don’t simply believe what you see and hear, especially if you’re planning to buy an unfamiliar product or service or do business with a company you don’t know. As difficult as it may be, read the fine print, and be sure to keep a copy. Ask about anything you don’t understand or that’s missing, and get the answers in writing.

Be on guard for poorly disclosed requirements, such as automatic billing or free trials that can lead to your being charged automatically if you don’t cancel within a certain period. For “risk free” offers, find out what you have to do to get your money back if you’re not satisfied. Ask whether the company will refund any shipping charges and pay the cost of returning a product. Don’t be misled by testimonials that promise great results, as with many weight-loss and cosmetic products. Be suspicious of anything that seems too good to be true or that’s advertised at a price that’s far below what others are charging.

Check for a company report at the Better Business Bureau if you are planning to buy from a company you haven't heard of or haven't work with before. Use a Web search to find user reviews and any complaints about the company and its products or services. Reviews may alert you to hidden gotchas.For the best protection, use a credit card when making a purchase so you can dispute a charge if there’s been fraud or misrepresentation. If you’re relying on a print, Web, or e-mail advertisement, keep a copy so you can prove misrepresentation, if necessary.

If you believe an ad is deceptive, complain to the Federal Trade Commission, your state or local consumer protection agency, and the Better Business Bureau.

—Anthony Giorgianni

Copyright © 2005-2014 Consumers Union of U.S., Inc. No reproduction, in whole or in part, without written permission. Consumer Reports has no relationship with any advertisers on this site.