Answers

What can you claim in your ads: 'best', 'guaranteed', 'lowest price', or naming a competitor?

Anything truthful that you can back up before the ad runs, with nothing misleading left out. The FTC says ads must be truthful and not deceptive, and advertisers must have evidence for their claims. Its guide says opinions people can judge for themselves draw less attention than claims they would have trouble checking. An ad that mentions a guarantee must make its conditions clear, and naming a competitor is legal when the comparison is truthful. This is a plain summary, not legal advice.

The FTC's basic rules

This is a plain summary, not legal advice. The FTC's "Advertising FAQ's: A Guide for Small Business" says that under the FTC Act, advertising must be truthful and non-deceptive, advertisers must have evidence to back up their claims, and ads cannot be unfair. It says "The law requires that advertisers have proof before the ad runs."

The guide says the FTC looks at implied claims and at what an ad leaves out, not only at its exact words, and that every state has consumer protection laws for ads that run there.

Number one, fastest and lowest price

The guide says claims people can judge for themselves, such as a drink that "tastes great", get less attention from the FTC, and that it pays closest attention to health and safety claims and to claims consumers would have trouble checking themselves. It says an advertiser must have at least the level of evidence it claims to have, and that letters from satisfied customers usually are not enough to support a claim that needs objective evaluation.

As general advice, "friendly" or "careful" is opinion, while "number one in the county", "fastest response in town" or "lowest price" is a claim someone can measure, so keep the proof (a survey, your own records, a dated price check) before you use it, or say something you can show instead. The related answer on unique selling propositions covers claims built from what you already do, and the one on putting customer reviews on your website covers quoting customers.

Guarantees, free offers and sales

  • Guarantees: the guide says an ad that mentions a guarantee or warranty should clearly say how to get the details, and any conditions or limits, such as a time limit, must be clearly disclosed. It adds that a money-back guarantee is not a substitute for proof of your claims.
  • Free: when a free item is tied to buying something else, the guide says the price of what is bought should not be raised from its regular price, and the terms should be clear, with the most important ones near the advertised price.
  • Sales and price comparisons: the guide says the same truthfulness standards apply, and points to the FTC's Guides Against Deceptive Pricing.
  • Bait and switch: the guide says it is illegal to advertise something you do not intend to sell in order to sell the customer something else, usually at a higher price.
  • Limited-time offers: as general advice, end the offer when the ad says it ends; a deadline that keeps renewing can mislead.

Naming a competitor

The guide says comparative advertising is legal as long as it is truthful. The FTC's policy statement on comparative advertising, 16 CFR 14.15, says the Commission encourages naming or referring to competitors but requires clarity and, if necessary, disclosure to avoid deceiving consumers, and it supports comparisons where the basis of comparison is clearly identified. It says disparaging a competitor is permissible so long as it is truthful and not deceptive.

As general advice, compare something measurable, such as hours, response time or warranty length, say what you compared and when, and keep the record. Using another company's logo or suggesting a link with it can raise other legal questions, so ask a lawyer first.

Sources

  1. Federal Trade Commission, "Advertising FAQ's: A Guide for Small Business"
  2. eCFR, 16 CFR 14.15, "In regard to comparative advertising" (Federal Trade Commission policy statement, 1979)

Related answers

Websites, upgraded or built

Most businesses do not need a new website. They need the one they have to load fast, say clearly what they do and ask the visitor to take one step.