Details - Between the Devil and the FTC

By Jon Lee Andersen

          While working this past month, switching back and forth among several email accounts I have, I noticed that at almost every website, I was a winner of something. While most of the “prizes” were junk that had little interest for me, on several of the notices the prize was a new computer, complete with a keyboard, speakers and a monitor. A DELL, no less.  Being somewhat skeptical about my good fortune, and remembering my father’s frequent reminder that there are no “free lunches”, I decided to examine the deal more closely. When I finally got to the details surrounding the “free” computer, I learned that I would be signing up for several credit cards and transferring balances to these new cards, for about 10 years of internet service at a price far in excess of my current arrangements, and a lifetime of email on forthcoming special offers.

             This little exercise prompted me to discuss briefly what the rules and regulations are for advertising offers of this type.  The Federal Trade Commission in one of its “FTC FACTS for Business” publications addresses the situation straight on. Here are the salient points of the FTC’s policies:

• Where the offer involves a rebate arrangement, the advertising must prominently state the before-rebate cost of the item, as well as the amount of the rebate. This is the only true way to provide a consumer with the necessary information to analyze an offer and to comparison shop.
   

• Requirements to purchase Internet services must also be prominently (that word again!) disclosed.  The disclosure should cover the cost of the service, the duration of the required commitment, any penalties of fees associated with early cancellation, any additional connection charges, and whether local internet service is available.
   

• The components of an offer should match any visual representations of the offer.  For example, if the picture of the computer shows the CPU, a monitor, keyboard and speakers, the offer should include all of these components.  If it does not, any of the items not included must be described very clearly and prominently.
   

• Important information concerning an offer must be conspicuously placed in the advertising. For example, terms about the basic cost of the product must be located near the advertised price. And of course there are the usual precautions against hiding details in obscure locations, burying them in densely packed lines of fine print or obscuring them in small-type footnotes.
   

•  Information concerning details of an offer should also be disclosed on the same electronic page as the offer, not on a pop-up window or in a hyperlink. Where hyperlinks are used, the link should be labeled so that it shows the importance, nature and relevance of the information in the hyperlink, i.e. “Early cancellation of Internet Service resulting in substantial penalties. Click Here”

Most of these rules and guidelines are pretty self evident and should be standard practices for advertisers.  However, reviewing them when planning a promotion is still a good idea.

 It’s like this: 

When a promotion involves something free
Most consumers react with great glee
And if terms and conditions
Are prominently mentioned
There’s no fuss from the old FTC