44.1 Advertising, Marketing, and Sales

Bait -and- switch advertising

Advertising a product at a very attractive price (the bait) and then informing the consumer, once he or she is in the store, that the advertised product is either not available or is of poor quality: the consumer is then urged to purchase (switched to) a more expensive item.

Deceptive advertising

Advertising that misleads consumers, either by making unjustified claims, concerning a product's performance or by omitting a material fact concerning the product's composition or performance.

The Federal Trade Commission has issued guidelines to help online businesses comply with deceptive advertising laws. These guidelines require that ________advertisements be truthful and not misleading. Claims in an ad must be __________ . They cannot be ________ and must disclose _______limitations and qualifiers about the claims being made. Finally, the disclosures must be _________________.

All Substantiated Unfair Relevant Clear and Conspicuous

State and federal laws relating to the ability to cancel sales contracts from door-to-door salespersons are called

Cooling Off Laws

Consumer Law

The body of statues, agency rules, and judicial decisions protecting consumers of good and services from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and so on.

In an online advertisement, any disclosures should be placed as close as possible to the claim being qualified or be included within the claim itself.

True

The federal agency that has the broad goal and authority to prevent unfair and deceptive advertising is the: a. Federal Advertising Protection Agency (FAPA). b. Federal Trade Commission (FTC). c. Federal Truth in Advertising Agency (FTAA). d. Truth in Advertising Administration (TAA).

b

After it determines that an advertisement is deceptive or unfair, the Federal Trade Commission's first step is to: a. require the advertiser to counteradvertise. b. issue a cease-and-desist order. c. draft a formal complaint.

c

Consumer protection laws regulate all of the following except: a. unfair trade practices. b. product safety. c. secured transactions. d. unreasonable credit requirements

c

Unwanted and unsolicited advertising sent via a fax machine may violate the: a. Products Labeling Act. b. Food, Drug, and Cosmetics Act. c. Telephone Consumer Protection Act. d. Telephone Promotion Act.

c

According to the Federal Trade Commission, any of the following practices constitute bait-and-switch advertising except: a. the seller refuses to show the advertised item. b. the seller fails to have a reasonable quantity of the item in stock. c. the seller fails to promise to deliver the advertised item within a reasonable time. d. the seller fails to state an unambiguous price in advertising. e. the seller discourages employees from selling the item.

d

A business can sue another business for lost sales due to false advertising under the Lanham Act if it can show that false advertising caused an__________ to reputation or sales and a loss of business from buyers who were_______________ .

injury, deceived

Vague generalities and obvious exaggerations in advertising are permissible and are known as

Puffery

Some advertisements contain "half-truths," meaning that the presented information is ______and therefore leads consumers to a false conclusion.

true but incomplete

After the Federal Trade Commission (FTC) files a formal complaint, the advertiser may agree either to settle the complaint or to proceed to: a. federal district court. b. a state court. c. arbitration. d. a hearing conducted by the FTC.

d

The Federal Trade Commission receives deceptive advertising complaints from many sources including all of the following except: a. competitors of alleged violators. b. consumers. c. trade associations. d. federal judges. e. Better Business Bureaus. f. government organizations. g. government officials.

d

Cease-and-desist order

An administrative or juridical order prohibiting a person or business firm from conducting activities the an agency or four has deemed illegal.

Multiple-product order

An order issued by the Federal Trade Commission to a firm that has engaged in deceptive advertising by which the firm is required to cease and desist from false advertising not only in regard to the product that was the subject of the action but also in regard to all the firm's other products.

Couteradvertising

New advertising that is undertaken pursuant to a Federal Trade Commission order for the purpose of correcting earlier false claims that were made about a product or service.

Advertising that _____ to be based on factual evidence, but is not reasonably supported by some evidence, will be deemed deceptive.

Appears

Federal laws are nearly always more sweeping and significant in their protections than state laws.

False