Full Disclosure: What You Need to Know

by Bill McClellan on Jun 8, 2017 2:17:12 PM FTC, Self Regulation

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One of our featured speakers at this year’s Government Affairs Fly-In was the Federal Trade Commission’s (FTC) Frank Gorman, assistant director, Division of Enforcement. Gorman supervises compliance investigations and enforcement litigation and previously served as the chief of the FTC’s Criminal Liaison Unit.

During Gorman’s presentation, he stressed the importance of being responsive to your customer base and making it easy for customers to cancel your service. Ever try to get rid of a service that you didn’t realize you signed up for and it’s impossible? Well, that company has made a serious error in judgment.

That company may not have realized that they are supposed to have “clear and conspicuous” disclosures available to their customers. A disclosure provides a consumer with all of the necessary and relevant information regarding a purchase or promotion so they can make a well-informed decision. This has nothing to do with how big you can make the font on the page. It’s a standard rule that advertisers need to adhere to.

Why do you ask? The FTC wants to make sure all business is being conducted fairly, and for good reason. I highly recommend checking out their list of Cases and Proceedings. It will certainly change your mind! And as a recent high-profile example, check out the case of Warner Bros. Home Entertainment, Inc. and how they failed to disclose that they paid online influencers such as “PewDiePie” to advertise their products on social media and through YouTube videos.

Just because your business needs to be more cautious, this doesn’t mean it should hinder your creativity in campaigns. It’s amazing how creative companies can be when incorporating important consumer information into their campaigns and websites. For starters, the FTC points out four considerations (P’s) when applying a disclosure:

  • Prominence. Can consumers see the disclosure easily? They shouldn’t have to scan to find what they’re looking for in fine print.
  • Presentation. Is the disclosure legible and worded in a way that can easily be understood?
  • Placement. Is the disclosure easy to find and in a place where consumers would think to look?
  • Proximity. Is the disclosure close to what it’s regarding, such as a promotion or service?

Gorman also pointed out that it is good practice to monitor the effectiveness of disclosures on your website. If you’re hearing complaints from your customers, take note. It’s important to keep track and take notice of how these complaints will affect your business. How many complaints are you getting? Are customer service staff being punished in the process?

And last but not least, don’t make assumptions and don’t take money without your customers’ permission. It’s bad for business!


 About the Author

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Bill McClellan serves as ERA's Vice President of Government Affairs. Prior to joining the association, Bill worked as a lobbyist at the Georgia Automobile Dealers Association, covering the state legislature and Georgia's congressional delegation. Before working for the GADA, Bill managed political campaigns at both the congressional and state constitutional levels.

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