October 2, 2014

FTC Operation Full Disclosure: Mission Possible

Seller Beware: Consumer Protection Insights for Industry

The Federal Trade Commission (FTC) receives information about consumer protection issues from various sources, from consumer and competitor complaints, to referrals from states and self-regulatory bodies, to the agency's own monitoring initiatives. It was the latter -- named Operation Full Disclosure -- that resulted in the FTC sending warning letters to over 60 companies about their advertising disclosure practices. Although the FTC didn't name names, it did say that among the recipients were 20 of the top 100 advertisers and advertisers of a wide range of products and services. According to the FTC, the ads of companies receiving letters failed clearly and conspicuously to disclose material information necessary to avoid misleading consumers, such as conditions for receiving the advertised price, the presence of an automatic renewal feature, the basis for product comparisons, representative results in testimonials, or safety issues.

Even if your company did not receive a warning letter, now is a good time to take the time to see how your companies' ads stand up to the FTC's guidance for clear and conspicuous disclosures. Operation Full Disclosure may foreshadow additional enforcement action in this area, and it may prompt consumers, competitors, and others to be more vigilant. Indeed, during the opening day of the National Advertising Division's annual conference on September 29, FTC Chairwoman Ramirez said that if advertisers do not voluntarily make changes to their disclosure practices where needed, the agency will bring enforcement actions.

© Arnold & Porter Kaye Scholer LLP 2014 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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