Who Regulates the Advertising Industry?

We have all made purchase decisions influenced by advertising. However, if an ad is misleading or untruthful who is responsible for making it right?

From a legal standpoint, the Federal Trade Commission (FTC) is the government entity that creates and enforces laws that involve deceptive, unfair or illegal commercial practices. The intent is to protect consumers from false and misleading advertising. Nutrition and pharmaceutical labeling/advertising are enforced by The Food and Drug Administration (FDA). All categories are monitored – from print to TV to social media. On the state level, attorney generals enforce their laws regarding illegal or untruthful practices to protect their consumers.

The National Advertising Division (NAD), part of the Better Business Bureau, provides independent self-regulation. It is not based on law but upholds industry standards for truthful advertising and claims substantiation. NAD actively monitors the marketplace and accepts challenges brought by individuals and organizations who feel that a brand or competitor is making false claims or engaging in unfair practices.

Civil lawsuits brought by eagle-eyed plaintiffs, along with FTC, state and NAD enforcement keep the space remarkably busy with complaints. Regardless of the origin, penalties for unfair practices or untruthful claims can include fines, cease & desist orders, civil penalties, expensive settlements as well as serious harm to brand reputation.

The key to avoiding any headache or heartache is simple: ensure your advertising is truthful with fully supported claims.