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Example research essay topic: Federal Trade Commission Commercial Speech - 1,351 words

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... is case Screen Test USA claimed that after signing the contract individuals gave up their right to return or request refund on products and services received. This Notice of Cancellation must be included in any direct marketing or door to door business, with two copies given to the buyer. In this case not only were individuals not given this information when they contacted the organization they were denied the right to cancel.

The Federal Trade Commission makes decisions on cases everyday. How this decision is reached requires not what the advertiser meant but instead what is implied. The FTC considers the person delivering the statement, a normal speaker of English, using the words in circumstances in which they were used, then decide if deceit was implied (Posner, 1995). The FTC has the dilemma of reviewing advertisements, and stating what can and can not be practiced in advertising. In the case FTC v. National Scholarship Foundation the FTC intends to secure injunctive and other equitable relief, including rescission, restitution and disgorgement, against defendants for violations including deceptive acts and practices.

The FTC reports that National Scholarship Foundation violated Section 5 of the FTC Act by misrepresenting material facts in connection with the offer and sale of their college scholarship search services. NSF falsely represent that consumers will be provided with a portfolio of scholarship and grant resources from which they are likely to obtain at least $ 1000 in grants and scholarships. NSF would falsely state that it would refund its fee if $ 1000 in grants and scholarships were not received. The fact is that NSF does not readily refund its fee if the consumer does not obtain $ 1000. NSF also encourages consumers to check with the National Business Reporting Bureau to check on the validity of NSF. NSF directly or by implication reports that NBRB is a separate entity that reports objective and reliable results.

NSF never informs the consumer NBRB is owned and controlled by the same individuals that own NSF. In the case FTC v. NSF the FTC intends to prove that the defendants have injured, and will continue to injure consumers, this is in direct violations with the FTC Act section 5 (a). Due to NSF deceptive acts or practices consumers have lost all or part of the fees they have paid to defendants. The FTC finds that unless these practices are discontinued consumers will continue to suffer financial injury. In researching these cases we have found that it would be impossible to adequately state in words exactly what an implied deception consist of.

In all of these cases it is blatant that deception has occurred, now the decision must be made in stopping these practices. Unless the companies Screen Test USA, National Scholarship Foundation, and U. S. Marketing Inc. are completely and permanently cited for violating the FTC Act will these practices stop?

If we examine the case with Kevin Trudeau, his separate businesses were Edens Secret Natures Purifying Product, Sable Hair Farming System, Jeanie Ellers Action Reading, Dr. Callahan's Addition Breaking Technique, Kevin Trudeau's Mega Memory System and Howard Bergs Mega Reading. If the FTC cited him in the first business would he have gone on to create 5 more companies using the same deceptive techniques? The FTC Act is challenged on a daily basis.

If we can recall just five deceptive promotions or advertisements without much effort we can only imagine the vast number of cases pending at this moment. This act was established in an effort to protect consumers. The FTC enforces Section 5 of the FTC Act that prohibits deceptive acts or practices in affecting commerce. The Commission may initiate federal district court proceedings to appoint violations of the FTC Act. The FTC also secures such equitable relief as is appropriate in each case. The FTC regulations of deceptive and unfair advertising may in some instances collide with the First Amendment protection of commercial speech.

The First Amendment is titled Religious establishment prohibited. Freedom of Speech, of press, right to assemble and to petition. Amendment is defined Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise there of, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. However, the First Amendment has not been a major obstacle for the Commission because the constitutional protection given to commercial speech does not extend to false and misleading statements. Therefore, the First Amendment does not protect deceptive advertising. Commission requirements for sellers to substantiate objective claims about their products by showing that they have a reasonable basis for making such claims.

The reasonable consumer test protects the seller from liability and the consumer from every outrageous misconception they may entertain. For instance, this test would protect seller from liability if an American company advertised they were selling Belgium waffles, and the consumer wanted to sue based on the argument that Belgium waffles can only come from Belgium. Material information is essential to the consumer who will buy products according to product differentiation. When material information is omitted, the FTC is there to regulate and ensure that the public is not deceived. Deception usually occurs in warranty, safety, cost and effectiveness of the product. Another aspect of the FTC Section 5 is governing unfair acts or practices.

The FTC reviews behaviors that are not exactly deceptive acts, but is more concerned about consumer safety. To qualify as an injury, the FTC would have to prove three things. First they must prove substantial monetary losses or safety risks have occurred. Second the FTC must prove a sellers failure to give the consumer proper information on the product or service.

This could give the seller an inappropriate advantage over the competition. Thirdly the FTC must prove the consumer could not have avoided an injury, either from high-pressure sales tactics or proving the seller did not make all information available to the consumers. The FTC can enact proceedings to protect against deceptive acts or unfair behavior. Sometimes while protecting or reviewing unfair or deceptive practices, the FTC will propose an order to cease engaging in the deceptive or unfair acts.

This action is called a remedy. Other examples of remedies would be for the company to do corrective advertising. The sellers future advertising must correct false impressions that were created by past advertising. Sometimes after it has proven that a seller has been deceptive, the seller will have to comply for all of their products including new introduction s of products. This would be considered an extreme case, but not unheard of.

The FTC is important to business because they create an even playing field. Their rules and regulations provide needed guidelines and promote fair trade practices among other businesses that may be competing for the same consumer dollar. Our group is in agreement with the FTC regulations. We appreciate that the FTC is interested in fighting unscrupulous advertisers for our consumer protection. We find this body of government a necessity in todays society. The FTC helps police questionable and corrupt business advertising practices.

Bibliography: Deception 12 References Barnes James A. , Bowers Thomas, Langvardt Arlen W. , Major Jane P. , & Phillips Michael J. (1998) Business Law and the Regulatory Environment: Concepts and Cases. United States: Irwin/McGraw-Hill. Damtoft R. W. , Page C. B. , McGrew T. M. , & Tortorice M.

E (1998) Northern District of Illinois Eastern Division Federal Trade Commission v. Kevin Trudeau individually. Available: web Davidson Virginia A. (1999, July 27) District of New Jersey Federal Trade Commission v. Screen Test USA, Inc. [Online]. Available: web Federal Trade Commission. (1999, August 11). [Online].

Available: web Posner Richard (1995) The Problems of Jurisprudence Cambridge, MA. Harvard University Press. Rucoba Laurie E. (1997) Southern District of Florida Federal Trade Commission v. National Scholarship Foundation, Inc. ; D.

B. F. National Business Reporting Bureau, Inc. [Online]. Available: web Thorleifson, Tracy S. (1998).

Central District of California Federal Trade Commission V. U. S. Marketing Inc. , and North American Charitable Services, Inc. [Online]. Available: web


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Research essay sample on Federal Trade Commission Commercial Speech

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