Legal Eagle: Rules for Business

Straight-forward legal tips for Military and Veteran Business Owners

By Kelly Bagla, Esq.

ESSENTIAL ADVERTISING RULES FOR BUSINESSES

ADVERTISING KNOW THE RULES!

Go Legal Yourself ®

Know Your Business Legal Lifecycle

2nd Edition NOW AVAILABLE!

Award-winning attorney, Kelly Bagla Award-winning attorney, Kelly Bagla shows you how to avoid legal pitfalls shows you how to avoid legal pitfalls FROM DAY ONE! FROM DAY ONE!

The last thing an entrepreneur wants is to spend valuable time and resources on legal issues, which is why they often drop to the bottom of the pile. But this can be a COSTLY MISTAKE—and Go Legal Yourself is here to make sure it’s one you avoid. • Gather the right documentation • Protect your brand • Avoid expensive legal pitfalls • Plan and manage growth competatively Rest assured that no nasty legal surprises will stand between you and your success. As we celebrate the birthday of America (Happy www.GoLegalYourself.com Birthday America!), we will all be inundated with sales Get your copy at amazon today! advertisements and as a business owner, you’ll also want to send out your own advertisements for your products or services for July 4th. Whether your business is a mom and pop operation or has a multistate presence, it is important to be familiar with the applicate state and federal advertising laws.

ADVERTISING RULES

The advertising rules that dictate what businesses can and cannot say in ads come from applicable state and federal laws. Typically, these laws focus on truth in advertising, deceptive advertising practices, and unfair advertising. State and federal laws aim to prohibit these advertising practices, require businesses to be truthful about their products or services, and to substantiate claims that they make in advertisements.

The Federal Trade Commission (FTC) enforces advertising laws at the federal level, and every state also has a consumer protection agency which enforces state advertising laws. Additionally, the state attorney general has the power to litigate against companies whose advertising harms citizens within their jurisdiction.

FTC ADVERTISING RULES

Under the FTC, the following general advertising rules must be followed: • Ads must be truthful and non-deceptive • Businesses must have evidence to back up their claims • Ads cannot be unfair, meaning the advertisement cannot cause substantial injury to consumers that consumers cannot reasonably avoid. For example, ads cannot make claims about health benefits that will lead reasonable consumers to buying a product, who only find out later that the product is actually harmful.

STATE LAW

As mentioned, each state also has its own set of consumer protection laws which protect consumers against unfair competition and deceptive advertising practices. Whereas under federal law consumers have very limited rights to sue, under state laws, consumers typically have more power to privately sue companies for false or deceptive advertising. For example, it you own a business and you believe a competitor is using a deceptive ad that could lead consumers to falsely believe that the product they are selling is actually coming from your company, you have several options. You could report the ad to the FTC and they could deal with it, you could sue under the Lanham Act, whether for false advertising or trademark infringement, or both, or you could sue under your state’s unfair competition laws.

DECEPTIVE PRICING

All bargain ads tout extra low sale prices and this is of course allowed. Just be certain that the sale price is actually a lower price than the regular price of the item. If you are selling a shirt on sale for $50, it had better be the sale price and not the regular price. Making up a fictitious regular price in order to say you have lower sales prices is deceptive and you risk not only being sued but losing the faith of your customers. Additionally, do not advertise that something is “free” unless it really is free. If a customer has to pay for any additional service to obtain the free item, state this fact clearly in the advertisement. Advertising that something is free but then charging customers more for regularly priced items in order to collect the free item is deceptive and illegal.

BAIT AND SWITCH

Related to deceptive pricing is the classic bait and switch, where an advertiser lures customers into the store with an offer but does so with no intention or desire to sell that item at that price. All advertisements must be part of a bona fide effort to sell the advertised product. Consumers are very smart so do not insult their intelligence by trying to sell them a substandard product rather than the one advertised.

YOUR COMPETITION

Mentioning your competition in an advertisement in order to compare the products is fine. However, when you make claims about a competitor that has not or cannot be proven, you crossover into dangerous grounds. Your competitor may be able to sue under a variety of federal and state laws.

TESTIMONIALS AND ENDORSEMENTS

Whether you use celebrity endorsements or testimonials of regular customers, make sure that what they are saying is true. Unless the endorser is a celebrity or expert, it you are paying an endorser, it must be disclosed. Additionally, when using a testimonial of a normal user of your products, when showing the product’s use, it must be during the normal use of the product. If you have retouched an important part of a photo or the product is being used in any other manner than its normal intended use, it must be disclosed

POLICY OF TRUTH

Telling the truth is the simplest rule. Slight exaggerations and boasting are expected and for the most part allowed in advertisements, but do not get too tricky with your wording or rely on technicalities to remain truthful. While an element of exaggeration in advertising typically comes with the territory, you must make sure that your claims are not factually false or otherwise unsubstantiated. Happy Advertising!

Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion. Knowing what you’re getting into is smart business because the responsibility of protecting your family and yourself falls on you.

For more information on how to legally start and grow your business please visit my website at

www.golegalyourself.com

Disclaimer: This information is made available by Bagla Law Firm, APC for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Go Legal Yourself ®

Know Your Business Legal Lifecycle

The last thing an entrepreneur wants is to spend valuable time and resources on legal issues, which is why they often drop to the bottom of the pile. But this can be a COSTLY MISTAKE—and Go Legal Yourself is here to make sure it’s one you avoid. • Gather the right documentation • Protect your brand • Avoid expensive legal pitfalls • Plan and manage growth competatively Rest assured that no nasty legal surprises will stand between you and your success.

2nd Edition NOW AVAILABLE!

Award-winning attorney, Kelly Bagla Award-winning attorney, Kelly Bagla shows you how to avoid legal pitfalls shows you how to avoid legal pitfalls FROM DAY ONE! FROM DAY ONE!