What Penalties Can be Imposed Against a Company that Runs a False or Deceptive Ad?
The penalties depend on the nature of the violation. The remedies that the FTC or the courts have imposed include:
• Cease and desist orders. These legally-binding orders require companies to stop running the deceptive ad or engaging in the deceptive practice, to have substantiation for claims in future ads, to report periodically to FTC staff about the substantiation they have for claims in new ads, and to pay a fine of $16,000 per day per ad if the company violates the law in the future.
• Civil penalties, consumer redress and other monetary remedies. Civil penalties range from thousands of dollars to millions of dollars, depending on the nature of the violation. Sometimes advertisers have been ordered to give full or partial refunds to all consumers who bought the product.
• Corrective advertising, disclosures and other informational remedies. Advertisers have been required to take out new ads to correct the misinformation conveyed in the original ad, notify purchasers about deceptive claims in ads, include specific disclosures in future ads, or provide other information to consumers.
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For more information, see here: http://business.ftc.gov/documents/bus35-advertising-faqs-guide-small-business
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