5. Regulation of ‘Green’ or Environmental Claims
The FTC has published detailed “guides” on claims regarding purported environmental benefits of products. These guides:
Apply to claims about the environmental attributes of a product, package or service in connection with the marketing, offering for sale, or sale of such item or service to individuals. . . . The guides apply to environmental claims in labeling, advertising, promotional materials and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names or any other means.
In particular, the FTC “Green” guides focus on the following types of environmental claims:
- Carbon offsets
- Certifications and seals of approval
- Compostable claims
- Degradable claims
- Free-of claims
- Non-toxic claims
- Ozone-safe and ozone-friendly claims
- Recyclable claims
- Recycled content claims
- Refillable claims
- Renewable energy claims
- Renewable materials claims
- Source reduction claims
In general, the FTC “Green” guides discourage general environmental claims: “It is deceptive to misrepresent, directly or by implication, that a product, package or service offers a general environmental benefit.” Instead, advertisers should seek to “qualify general environmental benefit claims to prevent deception about the nature of the environmental benefit being asserted.”
According to the FTC, any qualification made to avoid deceptive advertising “should be clear, prominent and understandable,” using “plain language and sufficiently large type” in “close proximity to the qualified claim.” Advertisers should also “avoid making inconsistent statements or using distracting elements that could undercut or contradict the disclosure.”
6. ‘Made in USA’ Claims: When Appropriate, Substantiation Required
With some products, such as automobiles, and textile, wool and fur products, a marketer must disclose U.S. content; with other products, an advertiser may choose to make a “Made in U.S.A.” claim. As with other claims, origin claims may be either express or implied:
- Express: “Made in U.S.A.”; "American-made"; "USA."
- Implied: Use of U.S. symbols or geographic references (such as U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories).
In any case, a product advertised as made in the United States must be "all or virtually all" made in the United States. According to the FTC, “‘[a]ll or virtually all’ means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.”
The FTC looks at a number of factors in determining whether a product is “all or virtually all” made in the United States. At minimum, the final assembly or processing of the product must take place in the United States. Other factors may include the amount of manufacturing costs allocated to the United States and whether any foreign content is integral to — or far removed from — the finished product.
In some cases, an advertiser may make a qualified “Made in U.S.A.” claim, such as “60% U.S. content,” “Made in USA of U.S. and imported parts,” or “Couch assembled in USA from Italian Leather and Mexican Frame.”
In any case, as with other advertising, a marketer must have a "reasonable basis," including competent and reliable evidence, to support the claim at the time of making the claim.
Lastly, all products of foreign origin imported into the United States must designate the name of the country of origin.
7. Guarantees and Warranties Must Meet Certain Requirements
The Magnuson-Moss Warranty/FTC Improvement Act includes provisions governing guarantees and warranties.
For example, materials providing warranties or guarantees, such as by use of the terms “Satisfaction Guarantee,” “Money-Back Guarantee,” or “Free Trial Offer,” should disclose, “with such clarity and prominence as will be noticed and understood by prospective purchasers,” any material limitations or conditions that apply to the “guaranteed” representation. For example: “If not completely satisfied with the product, return the product within 30 days for a full refund.”
In addition, prior to sale of the product, at the place where the product is sold, prospective purchasers should be able to see the written warranty or guarantee for complete details of the warranty coverage.
Moreover, the term “guarantee” has a particular legal meaning, which generally requires the seller to refund the full purchase price of the advertised product at the purchaser’s request.
The above points are not exhaustive of all potential issues that could arise when preparing or reviewing advertising materials. A general rule of thumb, however, emerges: Would a reasonable consumer (or your closest competitor) find an ad objectively misleading or unfair? If so, strongly consider revising.
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