TAILIEUCHUNG - Advertising Practices FREQUENTLY ASKED QUESTIONS Answers for Small Business

At KPMG, we encourage businesses to understand this system of forces; we help them assess the implications for their own organizations and to devise strategies for managing the risks and harnessing the opportunities. We can never know the future. But it is good business sense to be prepared for the possibilities: to expect the unexpected. This report cannot provide all the answers, and does not set out to, but it does suggest approaches that we believe will help to build business value in a changing world. We hope it provides a useful springboard for new thinking, debate and above all. | Advertising PrACTices Answers for Small Business Federal Trade Commission GENERAL ADVERTISING POLICIES What truth-in-advertising rules apply to advertisers Under the Federal Trade Commission Act advertising must be truthful and non-deceptive advertisers must have evidence to back up their claims and advertisements cannot be unfair. Additional laws apply to ads for specialized products like consumer leases credit 900 telephone numbers and products sold through mail order or telephone sales. And every state has consumer protection laws that govern ads running in that state. What makes an advertisement deceptive According to the FTC s Deception Policy Statement an ad is deceptive if it contains a statement or omits information that is likely to mislead consumers acting reasonably under the circumstances and is material that is important to a consumer s decision to buy or use the product. What makes an advertisement unfair According to the Federal Trade Commission Act and the FTC s Unfairness Policy Statement an ad or business practice is unfair if it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid and it is not outweighed by the benefit to consumers. For The Consumer

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