FTC FACTSfor Business

BUSINESS

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FEDERAL TRADE COMMISSION FOR THE CONSUMER

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*How to Disclose the Details

Big Print. Little Print.

What’s the Deal?*

ALMOST

FREE!

omputer sellers — online and brick-and-mortar — inundate consumers with advertisements for “free” or low-cost computers. The

offers usually involve rebates of several hundred dollars off the

computer’s purchase price — if the consumer commits to a long-term contract for

Internet service. Some of the offers may be good deals for consumers, but they are

likely to involve complicated transactions.

Some advertisements for “low cost” computers omit important restrictions

or conditions about the “deal,” or bury them in fine print or obscure locations. This

information should be disclosed clearly and conspicuously in the advertising so that

consumers can evaluate the merits of an offer and make an informed purchasing

decision.

C
Facts for Business

Rebated Computers and Internet Service

Many rebate promotions use big print to tout the

after-rebate price of the computer. But often,

the total price the consumer must pay up-front is

buried in the fine print, if it’s included at all.

Your advertisements should prominently state

the before-rebate cost of the computer, as well

as the amounts of the rebates. Only then will

consumers know their actual out-of-pocket cost

and have the information they need to

comparison shop.

In addition, advertisers should prominently

disclose whether the consumer is required to

purchase Internet service to qualify for the “low

cost” deal. The ad should state the key terms of

the purchase requirements, including the cost

and duration of the consumer’s commitment to

the Internet service.

Rebate promotions should clearly detail any

additional terms and conditions that consumers

need to know, like:

 penalties or fees for canceling the Internet

service contract early. Some rebate offers

require consumers to pay back all or a

portion of the rebate; others tack on an

additional fee.

 additional connection charges to access the

Internet service. For example, consumers

should be told that to access the Internet

they may have to pay long distance phone

charges, or expensive hourly surcharges for

use of an 800, 888 or 877 phone number.

This charge is in addition to the basic

monthly Internet service fee. Consumers also

should be told how to find out if local

Internet access is available.

 how long before they will receive the rebate.

Advertisers should tell consumers what

components are included in the offer. For example, if a monitor is pictured in the ad but is

not part of the deal, you must state this fact

clearly and prominently. You also should include

the cost of the monitor if it’s sold as an add-on.

Don’t Bury the Details

Your ads should clearly and conspicuously

disclose all the information about an offer that is

likely to affect a consumer’s purchasing decision.

Disclose the most important information — like

the terms affecting the basic cost of the offer —

near the advertised price.

Print advertisers should not attempt to hide

the real cost or the critical terms or conditions

by:

 putting them in obscure locations, such as the

border area on a print ad;

 burying them in numerous, densely packed

lines of fine print; or

 including them in small-type footnotes.

Television advertisers should not hide key

information in:

 a fast moving “crawl”;

 superscripts or subscripts using small print

sizes or a color that fades into the background;

 type that disappears from the screen too fast

for consumers to read and comprehend; or

 the middle of a long statement that scrolls

vertically on the screen within a short period

of time.

Disclosures in Internet Advertising

Information affecting the actual cost of an offer

should be disclosed close to the advertised price

— that is, on the same electronic page and next

to the price. Advertisers should not use pop-up

windows or hyperlinks to other electronic pages

to display key cost information. Hyperlinks may

be useful to tell consumers about less critical

terms and conditions of an offer, especially when

the information may be extensive. For example,

in rebate offers that require the purchase of

Internet service, the cost of the Internet service

should be disclosed on the same page as the
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advertised price of the computer. But hyperlinks

may be used to direct the consumer to the

cancellation terms and additional Internet

connection costs of many Internet rebate offers.

When using a hyperlinked disclosure,

advertisers should clearly label the hyperlink so

it shows the importance, nature and relevance of

the information to which it links (for example,

“Early cancellation of Internet Service may

result in substantial penalties. Click Here.”). The

hyperlink should be prominent, near the claim it

is qualifying, easily noticeable, and lead directly

to the qualifying information. Vague labels like

“Terms and Conditions” are not enough to direct

consumers to important restrictions or qualifications.

In addition, information that is significant to

the advertised offer should not be buried at the

end of a long web page that requires consumers

to scroll past unrelated information. Consumers

should not have to wander through an electronic

maze to discover important conditions or limitations of an offer.

For More Information

For more information about online disclosures,

including examples, see the FTC publication,

Dot Com Disclosures: Information About

Online Advertising. It describes the

information businesses need to know to ensure

that their ads comply with the law.

The FTC publishes other publications to

help businesses understand compliance requirements. Many are available at www.ftc.gov, click

on Consumer Protection for a list of subjects.

For printed copies, contact the FTC, toll-free,

1-877-FTC-HELP.

The FTC works for the consumer to prevent

fraudulent, deceptive, and unfair business

practices in the marketplace and to provide

information to help consumers spot, stop, and

avoid them. To file a complaint or to get free

information on consumer issues, visit

www.ftc.gov or call toll-free, 1-877-FTCHELP (1-877-382-4357); TTY: 1-866-653-

4261. The FTC enters Internet, telemarketing,

identity theft, and other fraud-related complaints into Consumer Sentinel, a secure,

online database available to hundreds of civil

and criminal law enforcement agencies in the

U.S. and abroad.

Your Opportunity to Comment

The National Small Business Ombudsman and

10 Regional Fairness Boards collect comments

from small businesses about federal compliance and enforcement activities. Each year, the

Ombudsman evaluates the conduct of these

activities and rates each agency’s responsiveness to small businesses. Small businesses can

comment to the Ombudsman without fear of

reprisal. To comment, call toll-free 1-888-

REGFAIR (1-888-734-3247) or go to

www.sba.gov/ombudsman.
Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

June 2000

F C EDERAL RADE OMMISSION T FTC OR HE ONSUMER

1-877-FTC-HELP www.ftc.gov

Facts for Business