FTC Issued Policy Statement on Deception (October 14, 1983)

The FTC released a FTC Policy Statement on Deception

October 14, 1983

The Federal Trade Commission (“FTC”) issued a Policy Statement on Deception in response to inquiries about its enforcement policies concerning deceptive practices. This statement clarifies the definitions and principles surrounding deception as outlined in the FTC Act, specifically Sections 5 and 12, which deem unfair or deceptive acts unlawful and prohibit false advertising for certain products.

The FTC emphasizes that to qualify as deceptive, there must be a representation, omission, or practice that is likely to mislead a reasonable consumer. Key elements in determining deception include whether the act is misleading, the perspective of the reasonable consumer, and the materiality of the information in question. Misleading representations can take many forms, including false claims, misleading price information, and failures to disclose important details about a product or service.

The Commission evaluates claims based on how a typical consumer would interpret them, noting that not every misinterpretation constitutes deception. Instead, liability arises when a reasonable interpretation leads to a false belief about a product. The context of the advertisement, including its overall impression and the target audience, plays a crucial role in this evaluation. The FTC also specifies that certain practices, such as bait and switch tactics, can lead to a finding of deception.

Materiality is another critical aspect, meaning the misleading information must likely affect a consumer's decision regarding a product. The FTC presumes that express claims are material, especially when they relate to health, safety, or central product characteristics. The agency emphasizes that injury to consumers, stemming from deceptive practices, often accompanies material misrepresentations.

In conclusion, the FTC intends to rigorously enforce its deception standards and ensure that consumers are not misled. The Policy Statement aims to provide clarity on how the FTC will apply its authority regarding deceptive advertising, reinforcing its commitment to consumer protection.

 

For more information, see here: https://www.ftc.gov/public-statements/1983/10/ftc-policy-statement-deception

 

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