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Advertising Substantiation: Legal Insights and Implications
Definition & Meaning
Advertising substantiation is a principle established by the Federal Trade Commission (FTC) that requires advertisers to have a reasonable basis for the claims they make in their advertisements. This means that before an advertisement is published, the advertiser must ensure that the statements made are truthful and can be supported by evidence. For instance, if an advertisement claims that "eight out of ten individuals who tried the new product preferred it over their regular brand," the advertiser must have data to back up this assertion.
Table of content
Legal Use & context
This principle is primarily used in the field of advertising law, which falls under consumer protection regulations. It is relevant for businesses and advertising agencies to ensure compliance with FTC guidelines. Advertisers must be diligent in verifying the accuracy of their claims to avoid legal repercussions, such as fines or mandated corrections. Users can manage their advertising practices using legal templates from US Legal Forms to ensure compliance with advertising substantiation requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A beverage company claims that its drink helps people lose weight. Before making this claim, the company must conduct studies to prove that the drink is effective for weight loss.
Example 2: A skincare brand advertises that "90% of users saw improvement in their skin within two weeks." The brand must have conducted a survey or clinical trials to support this statement. (hypothetical example)
Relevant laws & statutes
The primary law governing advertising substantiation is the Federal Trade Commission Act, which prohibits unfair or deceptive acts in commerce. Additionally, the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising provide further clarity on substantiation requirements.
Comparison with related terms
Term
Definition
Difference
False Advertising
Making misleading claims about a product or service.
False advertising is a violation of advertising substantiation, as it involves claims that cannot be proven true.
Deceptive Practices
Actions that mislead consumers regarding a product's quality or value.
Deceptive practices encompass a broader range of misleading actions beyond just advertising claims.
Common misunderstandings
What to do if this term applies to you
If you are an advertiser, ensure that all claims made in your advertisements are backed by credible evidence. Consider using legal templates from US Legal Forms to create compliant advertising materials. If you are unsure about the legality of your claims, consult a legal professional for advice.
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