FTC Announces Rulemaking and Request for Public Comments on Deceptive and Unfair Marketing Using Earnings Claims
March 2, 2022
On February 17, 2022, the Federal Trade Commission (FTC) published an Advance Notice of Proposed Rulemaking (ANPR) and a request for public comment regarding a proposed rule to address what the agency calls “deceptive or unfair marketing” that relies upon false claims about potential earnings. The FTC launched the proceeding to challenge “bogus” money-making claims that lure consumers, workers and prospective entrepreneurs into “risky business ventures that often turn into dead-end debt traps.”
Businesses that engage in marketing by using earnings projections or that utilize marketing companies that may make such projections on behalf of a business should follow this FTC rulemaking closely, as it is likely to expand the current understanding of what constitutes deceptive or unfair statements about earnings in the marketplace. In particular, statements about earnings outcomes are already high-risk for educational service entities subject to oversight by the U.S. Department of Education and/or individual states’ unfair and deceptive trade practice laws, but the FTC’s powers of enforcement could lead to additional consequences and liability for such statements and influence other enforcement agencies’ interpretation of what constitutes an actionable statement.
