|
Fraudulent claims can show up in ads for a
wide variety of products and services. Most use similar terms and techniques to entice a reader,
listener, or viewer to respond favorably to an ad. This publication includes general tips on how to
screen ads effectively and particular tip-offs - "buzz words" or techniques - to help you identify
some of the most common types of deceptions that are found in ads for get-rich-quick schemes,
weight loss fraud, health fraud, credit repair and loan scams, travel fraud and product
misrepresentations. By learning to spot the tell-tale signs of fraudulent advertising, you can
protect your customers, your bottom line, your reputation, and the good name of your legitimate
advertisers.
One evaluation standard applies to all ads: Does the offer, promotion, payoff,
or benefit sound too good to be true? If you use this standard, and if you exercise caution when
you spot some of the buzz words and techniques revealed in this booklet, there's a good chance that
you'll be able to spot a questionable ad or promotion with just a quick look, and an even better
chance that you'll be able to stop it before it gets into print, on the air, or in the mail to your
customers.
All Purpose Advertising Screening Tips
- If an advertiser refuses to answer your questions or to make changes in
the ad, it may be a tip-off to a deception. You have the right to reject an ad for any
reason.
- Trust your gut: experience sharpens intuition. If you have a feeling that
you should check out an ad, do it. Don't let it slip by.
- Don't let your guard down around deadline time. Fraudulent advertisers
know when you're at your busiest and may try to slip one past you at the last minute.
- Ask to see a sample of the merchandise if the ad is even slightly
suspicious. Legitimate advertisers usually welcome the opportunity to show you their products.
Get a production sample, not a handmade mockup. If the advertiser cannot submit the sample
before the closing date, pass up the ad until the next closing date.
- If an ad is unclear to you, it will be unclear to your readers, listeners
or viewers. If you don't know the nature of the product or service offered, ask the advertiser
for clarification. Your request for information may deter some unscrupulous advertisers and may
help legitimate businesses clarify any unintended vagaries before an ad is disseminated to
their customers (and yours).
- Is the copy outlandish? Are the claims too good to be true? Perhaps the
advertiser's creative team needs a refresher on the "rules of the road."
- Verify the integrity, stability, and performance of new advertisers,
especially when they make an unusually large media buy. Scam artists are in it for the short
term. Once they've made a quick buck, they often skip town, leaving dissatisfied customers and
unpaid bills in their wake. So check out the credit. Check out the source.
- Check out the fine print. Dense blocks of tiny text and fleeting TV supers
aren't just annoying - they may be illegal. The law requires disclosures and disclaimers to be
"clear and conspicuous." That means big enough for consumers to read and understand.
- Watch out for the asterisks and footnotes. A disclosure at the bottom of a
page won't cure an otherwise deceptive ad.
- Ads with glowing consumer testimonials, whether they deal with dramatic
weight loss, disease cures, or extravagant financial success, can sometimes be a tip-off to
deception. This can be true for before-and-after photos, too. Under truth-in-advertising laws,
advertisers must have proof that consumers who use the product at home will get the same
results as the endorsers featured in the ad or they must clearly disclose the results consumers
will get. When you see a testimonial, ask the advertiser for proof that consumers generally
will achieve the level of success described or depicted. A fine-print disclosure that "Your
results may vary" isn't enough.
- Get the street address and telephone number of every advertiser. In many
cities - New York, for example - a post office box number must be accompanied by a street
address. If the company is small, get the home address and telephone number of the
principal.
- Check out street addresses. Knowing that a post office box may arouse
suspicion, some unscrupulous advertisers may use the street address of a private mail receiving
company as their own. Keep a list of the street addresses of the private post offices in your
area. Ask any advertiser who offers an address that is a private post office location to
provide the company's actual street address and phone number.
- Be careful of advertisements without an address that require consumers to
use a toll-free number and credit card to order merchandise. This method of payment may be an
attempt to avoid using the mail as a way around the jurisdiction of the Postal
Service.
- Watch out for ads that use international telephone numbers. Some
international numbers look like domestic numbers. For example, dialing "809" and a seven digit
number reaches the Dominican Republic. Because each country sets its own telephone rates and
may have substantially higher rates than in the U.S., consumers may unknowingly end up with
hefty phone bills. Keep a list of U.S. area codes handy or look up unfamiliar codes in the
phone book to check whether a number is domestic or international. Make sure that all ads for
international calls clearly state that international long distance rates apply, even though the
calls look like domestic numbers. Don't accept cryptic and possibly misleading disclosures like
"LD rates apply" or "toll line."
- Be leery of ads that suggest or imply product endorsement, approval or
testing by a government agency or other nationally known firm or organization. This technique
often is used to lend credibility to fraudulent operations. Most government agencies do not
approve or endorse specific products. And in some cases, it's a crime to suggest a government
affiliation or misuse an official symbol. Question ads that:
a. Use graphics that copy the look of an official government notice or
announcement. Sometimes these ads depict the Statue of Liberty, eagles, official-looking seals,
or other government symbols;
b. Use an official-sounding name (like Commission, Society, or Institute) or a name that sounds
or looks like a well-known national firm or organization.
c. Be wary of an advertiser who pays you with a bounced check. Even if they come up with the
cash later, it may signal a disregard for ethical business practices. At the same time, just
because the check clears doesn't mean the company is legit. Your reputable advertisers, as well
as your subscribers or viewers, are counting on you to say no to the scam artists - even the
ones smart enough to pay their media costs upfront.
- The Better Business Bureau where the company is based might be able to
alert you to consumer complaints. Steer clear of companies that have already racked up a list
of dissatisfied customers.
- Some credit groups and other organizations issue up-to-the-minute alerts
about scam artists and advertisers that aren't creditworthy. Media that subscribe to these
services also can call to check on complaints about a particular company.
- Get-Rich Quick Schemes
Deceptive investment, business opportunity or employment ads capitalize on consumers' financial
needs, naivete, and optimism - and their widespread fantasies of hitting the jackpot. The level
of risk usually is proportional to the size of the return. Any representation of high earnings
with little or no risk, skills, or training is likely to be false and misleading. In short, in
the world of investments, there's no such thing as a sure thing.
The Buzz Words
 |
Anybody Can Do
it
|
|
Quick and
Easy
|
|
Big, Fast
Profits
|
|
No Experience
Needed
|
|
Work in the Comfort
of Your Home
|
|
Work in Your Spare
Time
|
|
Make Big Money
Working as Your Own Boss
|
|
No
Risk
|
|
You Purchase at
Wholesale, Then Resell at a Huge Profit
|
|
Absolutely
Guaranteed
|
|
No
Selling
|
|
Get in on the
Ground Floor of this New Technology
|
|
Nothing
Illegal
|
|
Learn the Secret
the 'Big Boys' Don't Want You to Know |
Types of Scams
Many business opportunites and investments - including some listed below - can be legitimate. But
scam artists have been known to operate in these areas:
- Work-at-home promotions
Display rack or vending machine businesses
- Invention promotion
Art, coins, stamps, or other "collectibles"
- Prize promotions
Services offering scholarships, grants, or student loans
Gold, silver, platinum, and "strategic metals"
- Recovery room operations - firms that claim they will recover investments
or money lost in earlier scams
- "Government products" - auctions featuring cars or real estate at
"bargain" prices and services that claim to have the "inside scoop" on government jobs,
government contracts, or small business loans.
Techniques to Watch Out For:
- Ads that tout seminars promising "no money down" real estate investments,
the "secrets" of day trading, or other "systems" for quick and easy financial success.
-
Graphic depictions of fists full of dollars, mansions, yachts, or other trappings of "the
good life." The bolder the picture or claim, the less legitimate the ad is likely to be.
Just how did some of these advertisers make their fortunes? You guessed it:
 |
Selling
phony get-rich-quick schemes to unsuspecting consumers.
|
|
Employment
ads that offer the "inside track" on government jobs, promise salaries of
"up to" thousands of dollars per month, or guarantee high-paying careers in
"glamour" industries like cruise lines, modeling, or international
business.
|
|
Consumer
testimonials detailing fabulous success stories. This kind of advertising
implies that the experience is typical for consumers using the product or
service. When you see a testimonial, ask to see the advertiser's proof that
consumers in general will achieve the level of success described or
depicted in the ad. For every success story, how many others lost their
life savings?
|
|
Ads that
focus on doomsday warnings about the predicted "collapse" of the economy
and promise financial security in gold, silver, or "strategic metals."
|
|
Ads for
coins, stamps, art or collectibles that promise overnight profits and offer
unlimited buy-backs and unconditional guarantees.
|
|
Ads that
promise big money from "no risk" investments in the Internet or other "high
tech" opportunities.
|
|
Ads that
promote distributorships or "exclusive territories" for name-brand
merchandise.
|
|
Ads that
promise financial freedom for restocking display racks in shopping malls or
convenience stores.
|
|
Weight Loss
Fraud
|
|
Despite
claims to the contrary, there are no magic bullets or effortless ways to
burn off fat. The only way to lose weight is to lower caloric intake and
increase physical activity. Claims for diet products or programs that
promise weight loss without sacrifice or effort are bogus. And some can
even be dangerous. |
These facts do not keep fraudulent advertisers from preying on consumers and
reaping billions of dollars each year. While the scams may vary (for example, pills, patches,
clips, body wraps, insoles or "diet teas"), the claims are almost always the same - dramatic,
effortless weight loss without diet or exercise.
The Buzz Words
|
No Diet! No
Exercise!
|
|
Lose 30 Pounds in
30 Days
|
|
Eat Your Favorite
Foods and Still Lose Weight
|
|
Shrinks Inches Off
Your Stomach, Waist and Hips
|
|
Scientists Announce
Incredible Discovery!
|
|
Revolutionary
European Method! Ancient Chinese Secret!
|
|
Turn on Your Body's
Fat Burning Process
|
|
Automatically
Convert Fat to Lean Trim Muscle!
|
|
Absorbs Fat
|
|
Developed After
Years of Secret Research
|
|
New
Scientific/Medical Breakthrough |
Techniques to watch out
for:
- Extravagant claims of dramatic, rapid weight loss.
- Testimonials from "famous" doctors, researchers or other medical
experts.
- Dramatic before-and-after photos depicting substantial weight
loss.
- Ads that tout the latest trendy ingredient in the headlines.
- A footnote hidden somewhere in an ad noting "diet and exercise
required."
- Remember: You can't cure an otherwise misleading ad with a buried
"disclosure" or a fleeting video super.
- Health Fraud
- No product on the market can guarantee sexual prowess, erase wrinkles, or
cure cancer, Alzheimer's disease, arthritis, or AIDS and HIV infection. And yet vulnerable
consumers fall prey everyday to unscrupulous marketers who exploit their fears and boost their
hopes, all in the name of a fast buck. In addition to wasting their money, these consumers may
be wasting valuable time before they seek proper treatment. Even worse, some products may cause
serious harm and endanger lives.
That's why it's important to approach ads that tout treatments or cures for
serious conditions or diseases with particular caution. Ask to see an advertiser's support for
extravagant claims. By law, advertisers must have solid evidence for health claims BEFORE they run
an ad. And ask yourself this question: If a medical breakthrough has occurred, would you be hearing
about it for the first time from someone placing an advertisement?
The Buzz Words
|
New Scientific Or
Medical Breakthrough
|
|
Tested All Over The
World
|
|
Clinically Tested
In Europe
|
|
Has
Doctors/Researchers Astounded
|
|
Developed After
Years Of Secret Research
|
|
Proven To Provide
Immediate Results
|
|
Secret Cure The
"Medical Establishment" Wants To Suppress
|
Techniques to Watch Out
For:
- Ads for products that promise to treat baldness, relieve stress, cure
impotence, improve eyesight, slow the aging process, or offer other easy answers to difficult
problems.
- Testimonials from "famous" medical experts.
- Case histories from "cured" consumers claiming amazing results. Such
testimonials also imply that their experience is typical for consumers using the product or
service. When you see a testimonial, ask for proof of its "typical" nature.
- Dramatic before-and-after photos.
- A laundry list of diseases or conditions the product cures or
treats.
- Ads that tout the latest trendy ingredient in the headlines.
- Ads that make extravagant claims for doctors or minimize the risk of
medical procedures.
- Ads that offer "natural" treatments for serious conditions like arthritis,
diabetes, cancer, heart disease, or HIV. Remember - "natural" doesn't necessarily mean "safe
and effective."
- Promotions for pills that promise to "cure" kids of hyperactivity, AD/HD,
or learning disabilities.
- Credit Repair and Loan Scams
- No one can legally remove accurate, current and verifiable negative
information from a credit report. In fact, the law does not allow credit repair marketers to
accept payment before they deliver their services. Yet, everyday, companies throughout the
country use advertisements to entice consumers with poor credit histories to buy their "repair"
services.
Some advertisers claim that by continually challenging essentially accurate
information, they can badger credit agencies to remove unfavorable information from a consumer's
credit report. They cannot. Other companies claim that they can create for consumers a whole new
credit file that doesn't contain their credit history. Typically, they promise to beat the system
by getting consumers an Employer Identification Number from the IRS. This dodge doesn't work - and
it's illegal.
Fraudulent advertisers also may prey on consumers or small businesses with
credit problems through "advance fee" loan scams. These ads typically offer "guaranteed" loans
regardless of income or credit history. The catch? They charge a hefty up-front fee to "process"
the loan, but never come forward with the cash. Legitimate lenders don't require up-front payments
before extending credit and they don't promise loans in their ads. So watch out for ads that offer
fast money without regard to credit or collateral. The Buzz
Words
|
Credit Problems? No
Problem
|
|
We Can Erase Your
Bad Credit - 100% Guaranteed
|
|
Create A New Credit
Identity - Legally
|
|
We Can Remove
Bankruptcies, Judgments, and
|
|
Liens From Your
Credit File Forever
|
|
No Credit? No
Income? No Problem!
|
|
$100 To $10,000
With Just Your Signature
|
|
Loans Guaranteed
Regardless Of Poor Credit Or Low Income |
Travel/Vacation Fraud
Fraudulent travel ads usually offer exciting opportunities at unrealistically low prices (Hawaii
for $29.95!). But ads for these "free" or bargain-priced vacations often fail to disclose expensive
"catches" or restrictions that may render the deals worthless.
Techniques to watch out for:
- A vacation offer accompanied by a certificate for free or very low cost
travel.
- Vacations offered as part of a too-good-to-be-true prize promotion. That
"luxury speedboat" may turn out to be an inflatable raft.
- Travel packages that advertise "free" hotel accommodations with the
purchase of airline tickets. A careful look at the fine print may reveal that the offer is good
only with the purchase of expensive "full fare" tickets.
- Vague descriptions of services and accommodations.
- Memberships in "travel clubs" touting suspiciously low rates for airfare
and hotels.
- In ads for timeshares or other vacation property, unrealistic claims about
investment potential or resale value. And watch out, too, for ads that include "artists's
renderings" of "planned facilities."
- Product Misrepresentations
- Product misrepresentations in ads can be difficult to detect. When
in doubt, ask to see a product sample and evidence for the claim.
When you look at the sample, make sure it looks like the depiction in the ad
and performs as stated or shown. When you ask for evidence for the claim, know that the law is on
your side. Broadcasters and publishers have the right to insist on modifications before agreeing to
run an ad or to turn down an ad altogether. Furthermore, the law requires companies to have
adequate support for the claims made in the ad before the ad is run, so legitimate advertisers
won't be surprised by your request to see some back-up information.
A list of agencies that may be able to help you evaluate the validity of
advertising claims is on pages 19-20. Even though these agencies may not be able to tell you
whether a particular company or product is under investigation, they may be able to share
information about previous cases or similar products or claims. Bear in mind that many scam artists
try to outrun the law by changing their corporate name or the brand name of a bogus product. Just
remember that snake oil is still snake oil - even when it's poured into new bottles.
You may want to check out the websites of the agencies and consumer
organizations listed at the back of this brochure. It's an easy way to keep yourself up-to-date on
the latest scams.
Be wary when you see ads that:
Advertise merchandise way below market value for a limited time only. This
technique often is used to advertise electronics, computers, or other high-ticket merchandise that
can be ordered only by phone.
Feature merchandise with names that sound or look like nationally recognized brands.
Offer vague descriptions of products.
Tout name-brand merchandise at ridiculously low prices or through unusual avenues. For example,
does it really make sense that a national retailer would promote its products at cut-rates in a
three-line classified ad?
Complaints: How to Appraise & Handle Them
Consumers often see the publication or station that carries an ad as the messenger of the
advertiser, espe-cially if they are dissatisfied with the product or service. Angry or
disappointed, they may cancel their subscription or tune to a different station. The potential loss
of goodwill may be reason enough to establish a procedure for handling complaints.
If the complaint is nondelivery of merchandise caused by an honest
miscalculation of the success of an offer, a strike, or a production mishap, a straightforward
explanation from the advertiser usually is sufficient. Unfortunately, not all delivery problems
stem from honest mistakes. Sometimes non-delivery issues indicate that the advertiser is in
financial trouble or has decided to "take the money and run."
If merchandise has been misrepresented, check your own screening procedures. Be
aware that for every complaint you receive, more consumers have had similar unhappy experiences.
When the number of complaints is out of proportion to the size of the ad or the size of the
audience, contact the advertiser, advise your credit department, and inform your local Better
Business Bureau or consumer protection agency.
In addition, contact your state consumer protection agency, your state attorney
general, the Federal Trade Commission, or the Postal Inspection Service. Complaints from the public
and media alert these agencies to a pattern of deception that may warrant further investigation.
Their phone numbers are listed at the end of this brochure.
Resources
No publication or station wants to be an unwitting conduit for deceptive claims. Likewise, list
profes-sionals do not wish to unknowingly assist in promoting misleading direct marketing
promotions. The best defensive weapon in your arsenal is your gut instinct that a particular ad
promises more than it could possibly deliver. Your company's own credit department, business
office, or consumer reporter also can be excellent sources. And www.consumer.gov puts a wealth of
information at your fingertips.
To check out the history, business practices, or general reputation of a firm
submitting questionable advertising, contact:
The Better Business Bureau (in the advertiser's area)
State or local consumer agencies
Your state attorney general's office
Postal Inspector (in the advertiser's area)
Trade Associations
Other organizations that may be able to help you evaluate the validity of an
advertising claim include:
Direct Marketing Association, Inc.
1111 19th Street, NW, Suite 1100
Washington, DC 20036-3603
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
United States Postal Inspection Service
P.O. Box 96096
Washington, DC 20066-6096
North American Securities Administrators Association
One Massachusetts Avenue, NW
Washington, DC 20001-1401
Food and Drug Administration
5600 Fishers Lane, Room 1685
Rockville, MD 20857
Council of Better Business Bureaus
4200 Wilson Boulevard
Arlington, VA 22203
Commodity Futures Trading Commission
1155 21st Street, NW
Washington, DC 20581
Securities and Exchange Commission
450 Fifth Street, NW
Mail Stop 11-2
Washington, DC 20549
|
