The Federal Trade Commission was created in 1914 with the Federal Trade Commission Act. While the Federal Trade Commission has any number of different functions, ranging from attempting to eliminate identity theft fraudprevention

Fraud of a “deceptive” nature best fits the rest of this discussion of false advertisingvague terms

Nonetheless, the Federal Trade Commission has enforced its stand against deceptive practices in prosecuting such actions as the use of small printF.T.C. v. Cyberspace.com, when the FTC argued that an agreement to pay a monthly fee was hidden from consumers on a $3.50 check that Cyberspace.com sent out. This, however, was a clearly deceptive instance, as the check was an attempt to trick consumers into agreeing to pay a monthly fee.

Unfair practices are slightly different from deceptive practices; the basic idea of unfair practices is that they damage consumers in some substantive fashion, or that they are unethical or unscrupulous.

The point remains to protect the consumer from the business practices employed by companies simply seeking profits. Unfair practices could easily also apply to false advertising, as unfair practices would cover those times when a company makes a completely false claim on a given product, resulting in countless purchases of that product, all of which would be done wrongfully. Such an instance would likely both fall into the domain of unfair practices and deceptive practices.

The Federal Trade Commission’s role in such fraud cases is to investigate and then prosecute them in court, to the full extent of the law. While this may vary in any given situation based upon the exact decisions issued by the court, the main point is that the Federal Trade Commission will not allow any company to get away with any kind of fraud of such a blatant nature as the deceptive and unfair practices of false advertising.

The only way to prevent false advertising from cropping up is to enforce the penalties imposed to punish perpetrators. But these penalties differ from the penalties surrounding many other types of fraud

 

 

The Federal Trade Commission was established in an effort to have a regulatory organization, the sole purpose of which would be to protect consumers from fraudulent acts. This includes protecting consumers from false advertising by investigating cases of false advertising and prosecuting the perpetrators. The FTC does not pursue such cases with an intent to press criminal charges, but instead it seeks to pursue a civil court case.

 

 

Such cases specifically focus on remedying an unjust situation as opposed to punishing the parties involved. This reflects one of the most important qualities of the FTC: its role is to protect consumers, not to punish falsely advertising companies.

 

 

The FTC's two primary criteria for determining whether a given case deserves prosecution are (1) whether or not the false advertising was deceptive, and (2) whether or not the false advertising was unfair. The difference between these two cases is that a deceptive piece of false advertising misleads the consumer in a significant way, while the unfair piece of false advertising damages the consumer in a significant way. It is possible for a given instance of false advertising to fall under the purview of both possibilities. To find out more about the FTC and its role in stopping false advertising, follow the link.

 

 

Most of the charges involved in a false advertising case are not criminal, as criminal charges are used to prosecute only cases of a significantly more injurious nature than most false advertising cases. The FTC levels charges of false advertising against perpetrators who create advertising that falls into either or both of the FTC's two main categories of false advertising, which are "deceptive" advertising and "unfair" advertising. But these charges are civil, and are most often focused on obtaining a court-enforced injunction against such advertising, without seeking any kind of monetary fine. Civil class action lawsuits represent another type of false advertising lawsuit.

 

 

The charges of such a class action lawsuit will be similarly civil, but can often focus significantly more on monetary damages, in order to provide some form of remuneration for deceiving all the plaintiffs of the class action lawsuit. These lawsuits are moderately rare, however, if only because it is difficult to assemble enough such plaintiffs to make such a lawsuit work.

 

 

Prevention

 

 

The prevention of false advertising relies primarily upon deterrence, as well as upon the FTC's enforcement of its policies against false advertising. The FTC attempts to quickly pounce on and end any instances of false advertising which fall into its purview, and will often make sure that some form of agreement is signed by the perpetrator, ensuring that the perpetrator will commit no further acts of false advertising.

 

 

But even more often than this, a given company will sue another company for false advertising, because the defendant makes some false claim about the efficacy of its product, or makes a false claim about the efficacy of the plaintiff's product, or even defames or insults the plaintiff's product or company in some significant way. Companies suing each other for false advertisement stands as one of the primary deterrents to false advertising, as losing such a case is undoubtedly damaging for the defendant.

 

 

A losing defendant will likely be required to pay some kind of compensation to the plaintiff, and will also likely at the very least have to retract the entire false ad campaign, costing that company a tremendous amount of money. Furthermore, the very presence of the lawsuit will likely do much to hurt the credibility of the defendant company. To find out more about how the prevention of false advertising is brought about by the deterrence posed by other companies, follow the link.