Ad Agency Settles with FTC for $2 Million in Deceptive Ads Case

The Federal Trade Commission has reached a $2 million settlement with Marketing Architects, Inc. in a case involving false and deceptive radio advertisements. The FTC and the state of Maine had filed a complaint alleging that Marketing Architects, an advertising agency specializing in direct response radio and TV ads, aired false or deceptive radio advertisements promoting weight loss supplements over a period of approximately three years. The government agencies alleged that Marketing Architects concealed some of these advertisements as news reports or public service announcements, and made unsubstantiated scientific claims about the products’ effectiveness.

Marketing Architects, one of the largest direct response ad agencies, generated more than $16 million in gross sales for the sellers of the weight-loss supplements advertised. In addition to the fine, the company has agreed to comply with strict rules governing the future content of weight-loss supplement ads.

Broadcasters should be aware of the potential for this type of advertising content liability. The FTC and state agencies can initiate these actions independently and have successfully levied large fines against promoters of false or deceptive claims.

If you have any questions regarding advertising laws, please contact any attorney in our office.