4 Marketing Mistakes That Can Get You in Legal Trouble

used with permission from SBA.gov
by Rieva Lesonsky

Advertising and marketing is regulated by federal law, and if you’re not on top of the regulations that apply to you, your ads could end up costing you more in fines than they bring in business. The Federal Trade Commission regulates and enforces advertising laws. Here are some key advertising and marketing mistakes small business owners should avoid.

Mistake #1: Sending SPAM email. No one likes to receive spam, but you’ll b really unhappy if you are accused of sending it. If enough of your business emails get marked as spam, the recipients’ ISPs could block your emails, or your email service provider could shut off your campaign. But that’s the least of your worries, because breaking CAN-SPAM laws could cost you as much as $16,000 for each spam email.

You can’t get off the hook by using an email marketing service to send out your emails, either. Even if an intermediary handles the sending, you’re still responsible for making sure they follow the rules. The most important rules to follow are identifying your email as advertising, avoiding deceptive subject lines, including the physical address for your business in the email, and including a link to unsubscribe. Get the full details about spam at the Federal Trade Commission website.

Mistake #2: Using someone else’s trademarked or copyrighted material. Thanks to the internet, it’s easier than ever to accidentally use someone’s trademarked or copyrighted property in your own marketing and advertising materials—and easier than ever for them to find out about it. For example, if you have a business blog, are you just searching for photos online and pasting them into your blogs? Unless you get permission from the photographer, you just infringed on his or her copyright. This might not be a big deal if it’s a random individual, but if the photo is the property of a professional photographer, company or publication, you could face hefty fines. Visit the U.S. Patent and Trademark Office website and do a trademark search to be sure.

Mistake #3: Defaming a person or company. Defamation is making a statement that harms someone’s reputation. However, you can also be sued for defamation if you harm a business’s reputation. This is why you should never attack a competitor in your marketing or advertising materials. Nor is it a good idea to draw direct comparisons between your products or services and the competition’s, unless you have independent data to back up your claims, such as a rating from a consumer organization. Even in this situation, though, it’s best to simply toot your own horn and refrain from criticizing your competitor. If the competitor sues you for defamation, and what you said is ruled false, you could be liable for slander (verbal defamation) or libel (written defamation).

Mistake #4: Using false or misleading advertising. Whether you own a corner store or a nationwide retail chain, all businesses must follow the same rules regarding false advertising. Advertising can be ruled deceptive if it either contains false or misleading information or leaves out information that’s important to whether customers decide to buy. Claims about health benefits or safety of a product or service are regulated especially strictly. For example, if your ad says the majority of pediatricians recommend your children’s vitamins, you need to have an actual survey to back up that claim. Penalties for false advertising vary depending on the scope of the ad and the potential harm it could do; there are also different rules for specific industries. Learn more about how the FTC defines false advertising.