Truth in advertising.
Our industry is under the impression that the FTC, as a governing and regulatory body, has been doing a fine job of policing advertisers under the following mandate:
Under the Federal Trade Commission Act:
· Advertising must be truthful and non-deceptive
· Advertisers must have evidence to back up their claims; and
· Advertisements cannot be unfair
The ads are ubiquitous.
LifeLock, the identity theft protection company guarantees your personal identity will be safe from identity theft, backed by a million dollar “guarantee”.
Richard Todd Davis, CEO of LifeLock Inc., was so confident in his company's ability to protect his identity that he publicly revealed his Social Security number: 457-55-5462.
But according to a new class-action lawsuit filed last week in Jackson County, West Virginia, LifeLock's identity theft protection services were so inept that Davis' personal information was stolen repeatedly.
"While LifeLock has only publicly acknowledged that Davis' identity was compromised on one occasion, there are more than 20 driver's licenses that have been fraudulently obtained [using his personal information]," states the suit, which now includes New Jersey and Maryland, states.
What penalties can be imposed against a company that runs a false or deceptive ad?
The penalties depend on the nature of the violation. The remedies that the FTC or the courts have imposed include:
· Cease and desist orders. Ordering companies to pay a fine of $11,000 per day per ad if the company violates the law in the future
· Civil penalties, consumer redress and other monetary remedies ranging from thousands of dollars to millions of dollars
· Corrective advertising, disclosures and other informational remedies