This guide describes laws and rules that govern advertising for consumer goods and services. For additional information about vehicle advertising, please see the Attorney General's rules about advertising vehicle sales.
Advertising downloadables
Deceptive Advertising
- What Is a Deceptive Advertisement?
An advertisement is deceptive in violation of the Maine Unfair Trade Practices Act if:
- It contains a misrepresentation, omission, or practice that is likely to mislead the consumer;
- The consumer is “acting reasonably under the circumstances”; and
- The misrepresentation, omission, or practice is material, meaning that it is likely to affect the consumer’s conduct or decision with regard to a product or service.”
It is not necessary to prove that an advertisement is intended to be deceptive. However, a simple mistake in the advertisement is not usually considered a binding contract offer which the business must honor.
- Advertised Claims Must Be Provable
Sellers cannot make claims in advertisements that are not provable.
For example, if an advertisement claims that an item is “50% off our regular selling price,” then the seller must be able to show that the sale price is in fact 50% less than the regular price. This requirement also applies to claims about quality or performance.
If an advertisement claims health benefits can be realized from a particular diet, then there must be a reasonable basis for such claims.
- Price Comparisons Must Be Fair
An advertisement cannot compare the sale price of an item to a former price unless the product was openly and actively offered for sale:
- at the former price;
- for a reasonably substantial period of time; and
- in the relatively recent past.
The advertiser must not invite price comparisons with competitors unless the higher price is actually being charged by other retailers in the same trade area. The F.T.C.’s guideline in this area states that such price comparisons must be made in “good faith and not for the purpose of establishing a fictitious higher price.”
- Sufficient Quantities of Advertised Goods
A seller should have sufficient quantities of advertised goods on hand to meet reasonably expected demand. If only limited quantities are available, then the advertisement must clearly state that fact. If the advertisement features more than one item, those in short supply should be identified specifically.
- False Prices
Factory outlet stores may not advertise a price as “wholesale” when it is in fact a “retail price” or the same price charged by the large retail outlets in the outlet’s sales area. In addition, a factory outlet may not represent that it is selling at “factory prices” unless it is selling at the prices paid by those purchasing directly from the manufacturer. Confusing statements about prices can also be illegal.
- Free Items That Are Not Free
Sellers should not advertise a product as free in conjunction with the sale of another product unless the sold product costs no more than the price at which it is usually sold. The net result of such a sale would be that you a consumer has not received any item for “free.” The Federal Trade Commission has issued a rule on offers of “free” items and services.
- Zero Interest Financing
Watch out for hidden charges in financing offers that advertise zero interest. Here are some examples:
- Many zero interest offers are for a limited payback period and if you do not pay the full balance within that period, you will be charged interest dating back to the purchase date, even if you have paid off most of the balance.
- In some no interest programs, your payment each month does include an interest charge. If you make all payments on time and pay off the entire purchase price by the agreed-upon date, the interest you have paid is credited back to you. However, if you miss a payment, pay late one month, or do not pay off the whole balance by the end of the agreed-upon period, you will not receive the credit.
- Some sellers may offer zero interest financing but inflate the selling price to make up the difference. In this situation, the interest is baked into the price that you are paying to buy the item.
- Bait and Switch
A “bait and switch” occurs when a seller lures a consumer with an advertisement for a good or service that seems very desirable for the purpose or with the intent to sell an inferior or more expensive good or service to the consumer. A seller may disparage the advertised item or will tell the customer that it is no longer available or that the offer has expired. The Federal Trade Commission has issued a rule on “bait and switch” advertising.