The Use of Proper Disclaimers in Ads

We review many ads that contain very prominent headlines designed to catch the consumer’s attention and draw her into the ad to buy the advertised product.  You might ask, “What good is an ad that does not contain a prominent headline, intended to attract attention and draw in the consumer to purchase the advertised product?”  Fair question.

But from time to time we see ads that really do not deliver what they purport to offer to the consumer; ads that employ both a bold headline to suck in the consumer and a disclaimer of the offered deal in the fine print, not proximate to the headline, to tell the consumer that what is advertised is not going to be provided.  For example, a headline that offers a savings of 20% OFF EVERYTHING IN THE CATALOG, when, in fact, that ad contains a disclaimer, buried at the bottom of the ad in fine print that not “everything in the catalog” is 20% off; “restrictions apply.”

The Federal Trade Commission (“FTC”) takes a very dim view of an advertiser’s use of a disclaimer that is likely to cause deception among consumers.  The FTC, in its Advertising FAQs: A Guide for Small Business, writes:

When the disclosure of qualifying information is necessary to prevent an ad from being deceptive, the information should be presented clearly and conspicuously so that consumers can actually notice and understand it.  A fine-print disclaimer at the bottom of a print ad, a disclaimer buried in the body of text unrelated to the claim being qualified, a brief video subscript in a television ad, or a disclaimer that is easily missed on a website, are not likely to be effective.

On the issue of fine print, the FTC further admonishes, or guides, that “advertisers [cannot] use fine print to contradict other statements in an ad or to clear up misimpressions that the ad would leave otherwise.” (source)

The FTC has frequently taken action against these deceptive trade practices, and there is no doubt in our minds that the FTC’s enforcers will continue to do so.  The FTC does not like deceptive practices, nor do the Attorneys General of many states. Although consumers do not have standing to bring a claim for violation of the FTC Act, consumers have other remedies for deceptive ads.  These include state consumer protection laws, such as Maryland’s Consumer Protection Act, California’s Consumer Legal Remedies Act and others.  A deceptive practice creates the possibility of consumers bonding together to form a class to pursue their claims.

The FTC has no hard and fast rule when it comes to type, size or disclaimer placement.  An advertiser should test its copy by asking itself whether it might be considered by a consumer reading the ad for the first time as deceptive, or even confusing.  If the answer is a “yes,” or even a “maybe,” the ad should be revised.

If you have questions about an advertisement, Goodell DeVries can help.  Contact Jim Astrachan at 410-783-3550 or