A business runs an ad that breaks the law. The last thing a business would want is the have the Federal Trade Commission (FTC) to make a claim against the business for the ads. The consequences of these improper ads can disrupt a business. Not only has the business wasted a large amount of money on ads that need to be stopped, the business may also have to pay additional penalties or spend more money running additional ads to reverse any false impressions made to the customer.
This issue can be prevented just by closely reviewing the ads. In addition, the cost to hire an advertising attorney to review the ads can be a small price to pay to avoid these large headaches.
Consequences
So, what happens if the FTC claims you have made an improper ad. Below is a list of few things that may happen:
Stop Running the Ad: If an ad breaks the law, the FTC will make the business stop running the ad through a “cease and desist order.” A cease and desist order is an order by the FTC the stop the actions that are breaking the law. These orders can disrupt a business, especially if the business has already spent a large amount of money to create and run the ads.
Fix the Ad: Fixing the ads is called a “corrective action.” In some cases, the FTC may require a business to run ads correcting false impressions that were made from an ad that breaks the law. Similarly to the above, this can disrupt a business because the business will have to stop the ads breaking the law and pay to run new ads for the corrective action.
Add Warnings: The FTC can require businesses to add warnings on labels or in advertisements to customers can have more accurate information. These actions can be seen in some health products, where the FTC will require warnings of possible side effects.
Stop the Business: The FTC may ban some people or companies from doing certain actions in the future. For example, the FTC may ban a business from making infomercials to sell the products and similar products.
Pay Customers Back: The FTC may require businesses to return the money for products if the business broke the law. The FTC may require the business pay the FTC a penalty and return some of the money back to the customers who bought the product in question.
Penalties: Additional penalties can be required by the FTC if a business does not comply with the orders made by the FTC.