Ethics Lecture Series: The Truth About False Advertising

Smith students had the opportunity to hear from an expert in the field of ethics in advertising Wednesday, November 08, 2006. Lesley Fair, senior attorney at the Federal Trade Commissions Bureau of Consumer Protection, gave a talk titled, The Truth About False Advertising: Why Ethical Marketing Isn't an Oxymoron.

Fair introduced her discussion by giving examples of consumer behavior in response to false advertising. When a company receives a complaint letter there are an average of nine people who know about that complaint, according to some studies, she said.

Fair then listed the guidelines and best practices for ethical advertising and presented examples of companies that presented false claims with various breaches of ethics.

The first flaw listed was claims that defy scientific principles. Examples here were advertisements for dietary supplements that claimed to eliminate consumers need to diet. Advertising allows for a certain type of exaggeration or puffery. However, objective claims are claims that the FTC takes more seriously, Fair said.

The second flaw listed was claims that contain a disturbing amount of creativity. Nutritional supplements that claim to cure a behavioral condition fall in this category. The third flaw she cited was claims that contain creative engineering or camera work. An automotive advertisement that portrayed an unrealistic amount of durability in an automobile was an example here.

The fourth flaw was a literally truthful claim that is nevertheless deceptive to consumers. This example was a quick service restaurant chains claim that its product was a healthy alternative to another similar product. It met this claim on one measure, while failing in a number of others.

The fifth flaw was deceptive fine print. Here was an example of an automobile that was advertised as zero-down lease, but contained a lease inception fee. An otherwise deceptive ad cannot be cured by fine print. You as a marketer are held responsible not only for the claims you make, but also for what consumers take away. What the headline giveth, the footnote cannot taketh away, Ms. Fair said.

The sixth flaw was ignoring consumers wishes not to be bothered. Here an example was given of a firm that contacted consumers on the do-not-call list by telephone.

The seventh flaw was questionable handling of confidential data. Here the example was a pharmaceutical firm that started an information request service for an anti-depressant medicine and, upon abandonment of the project, sent all of the users e-mails to one another.

The eighth flaw was assuming truth in advertising is someone else's responsibility. Here a firm that refused to pay an advertised rebate was given as an example. Though it knew rebates were still outstanding an unfilled, the firm continued to advertise rebates.

The ninth flaw was mystifying product development. Here a video game was presented that had an inappropriate game embedded in its system which it did not disclose to the regulatory body.

The last ad Fair showed was an example of how the FTC uses cost-effective and creative means to educate consumers about protecting themselves.

If you don't want to deal with regulatory bodies you need to get involved in self-regulating bodies in your industry. Examples of self-regulatory bodies include the entertainment software ratings bureau. If there's effective self-regulation, then law enforcement does not have to be involved, Fair asserted.

Lesley Fair Attorney, Federal Trade Commission Lesley Fair is a senior attorney with the Federal Trade Commissions Bureau of Consumer Protection, where she has represented the commission in numerous investigations of deceptive national advertising. A recipient of the Paul Rand Dixon Award for Law Enforcement and the FTCs Award for Outstanding Scholarship, she now specializes in business education and compliance. Ms. Fair is a vice chair of the Consumer Protection Committee of the American Bar Associations Section of Antitrust Law and served as editor-in-chief of the ABAs Consumer Protection Update. Before joining FTC, Fair practiced criminal law and appeared before the Supreme Court of the United States in Murray v. Carrier. She is a member of the State Bar of Texas and the District of Columbia Bar. She served as staff counsel to the 5th U.S. Circuit Court of Appeals in New Orleans and served as a law clerk to U.S. District Judge Fred Shannon of the Western District of Texas after law school. Fair holds the title of distinguished lecturer at the Catholic University Law School, where she has served as an adjunct faculty member since 1984. She was recently named Outstanding Adjunct Professor for the 2005-2006 academic year. She also has served as a Hearst Foundation Visiting Professional at the University of North Carolina School of Journalism and Mass Communication. Fair attended T. C. Williams High School in Alexandria, Va., during the years depicted in the movie Remember the Titans, graduated from the University of Notre Dame, and received a J.D. from the University of Texas School of Law. She is a resident of the District of Columbia.

» Read about the fall 2006 ethics lecture series.
> Read about Smith's spring 2006 ethics lecture series.
> Read about Smith's fall 2005 ethics lecture series.
> Read about Smith's spring 2005 ethics lecture series.

▓ Mark Mulvanny, MBA Candidate 2007, Smith Media Group