New FTC Guidelines

The FTC is at it again. Yes the same organization that brought you the General Price List and has come up with a new way to protect consumers from unscrupulous business practices.

It is important for you to know that these new regulations are not directly targeted at the funeral home industry; they are far broader reaching than that. In fact, these new regulations have the power to impact every business that advertises (which means just about every business out there).

First and foremost, I must say that I am not a lawyer and therefore the information provided in this newsletter is my opinion only and not legally binding or legal advice. It is solely your responsibility to ensure you interpret the FTC guidelines for yourself. Here is a link to the FTC site for you: FTC Guidelines and also read the guidelines here: FTC PDF

A lot of my marketing friends believe that the primary motivator behind these new rules is the blatant lies being told in too many internet advertisements. You know…they are the ads that describe how a busy working mom was able to lose 100 pounds by following 2 simple rules.

FTC has had rules for advertisements for years but by tightening up the rules they have changed the face of advertising significantly.

Here’s the main gist of the changes…. (and please read the FTC guidelines yourself)

The first major change involves the use of testimonials or endorsements in your advertisement. Here’s how a lawyer friend explained it to me….

The revised FTC guide has deleted the “safe harbor” that has long allowed advertisers to use testimonials who reported specific successful experiences with an advertised product or service as long as the advertiser included a disclaimer such as “Results not typical.” Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.

So if you ad for your funeral home includes a testimonial from a family you have served, you will have to examine the guidelines very carefully and make sure you are in compliance.

If the family in the ad says that they were “extremely pleased with your service” you need to be prepared to prove that the average family was also extremely pleased otherwise you are running a misleading ad.

Failure to comply….means a $11,000 fine per incident!

The second major change to the FTC guidelines involves the full disclosure of all material connections.

Basically the FTC is attempting to create a very transparent environment in which a consumer always knows when someone is making money.

There are some nuances to the guideline that make it kind of tricky to interpret. For example if you are endorsing a particular urn in a cremation ad, that ad is probably in compliance because the consumer would normally expect that there is a commercial relationship between you and the urn manufacturer.

However, let’s say you have a link on your website that directs families to a local florist’s website where they place an order. If the florist pays you a commission you need to disclose this relationship on your website.

In general, if there is a link on your website that results in you making money….you must disclose that fact to your website visitors.

Here’s the link again to the FTC guidelines FTC PDF. If you are the owner of a funeral home you need to read the document and decide how it impacts your advertising including your newspapers ads, radio ads, and your website.

Remember, as the business owner you are the one who is liable for your ads (even if an agency creates them for you). For years you have had to comply with the FTC’s GPL guidelines, you now need to make sure that every ad you run is in compliance with their new set of rules.

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