Ohio Advertising Regulations: Consumer Products and Transactions

Generally no, if the station’s employees are not actually aware that an advertisement violates the law.

The Ohio Consumer Sales Practices Act, R.C. Chapter 1345 (the “OCSPA”), governs the relationship between consumers and entities engaged in consumer transactions. The OCSPA places certain restrictions on “suppliers” of consumer transactions, including a prohibition on unfair, deceptive or unconscionable sales practices. R.C. §§ 1345.02 and 1345.03. A “supplier” is defined as a “seller, lessor, assignor, franchisor, or other person engaged in the business of effecting or soliciting consumer transactions, whether or not the person deals directly with the consumer.” R.C. § 1345.01(C).

A radio or television station is not a supplier when it merely broadcasts an advertisement. Further, R.C. § 1345.12(B) expressly exempts broadcasters from the requirements of the OCSPA as long as they have no knowledge (defined as “actual awareness” in R.C. § 1345.01(E)) that the information disseminated or reproduced for others violates Chapter 1345. Thus, broadcasters do not appear to generally have a duty under the OCSPA to verify the accuracy of statements, including product claims made in advertisements for others.

The OCSPA may, however, be applicable to promotions conducted by a station. It is also not clear whether this section protects a station if the station produces the advertisement or the copy for an ad, rather than merely airs an advertisement prepared by others. If a claim under the OCSPA is asserted against a broadcaster, there may be a factual question regarding what the station’s employees knew. Therefore, it is recommended that broadcasters familiarize themselves with Ohio’s consumer protection laws and regulations.

Broadcasters should also keep in mind that Federal law gives the FCC the power to suspend a broadcaster’s license where it has knowingly transmitted “false or deceptive signals or communications.” 47 U.S.C. § 303(m)(1)(D)(1).

In addition, R.C. § 1345.02(C) provides that, in construing what constitutes an unfair or deceptive consumer sales act or practice, a court shall give “due consideration and great weight” to orders, rules and guides of the Federal Trade Commission (“FTC”), as well as federal court interpretations of the Federal Trade Commission Act. The FTC may issue a cease and desist order to an advertiser it deems to be engaging in false or misleading advertising.

An example of such an FTC guide, which deals with deceptive weight loss advertising, is a Reference Guide for Media on Bogus Weight Loss Claim Detection, which applies to non-prescription products such as over-the-counter drugs, dietary supplements, creams, wraps, devices, patches and similar products, and is available online. While broadcasters’ compliance is voluntary, the FTC Chairman at the time this guide was issued suggested that the FTC may consider legal action against stations that broadcast deceptive weight loss ads.

The FTC on its website at http://www.ftc.gov/tips-advice/business-center/advertising-and-marketing has advertising and marketing legal resources available to broadcasters.

To summarize, while broadcasters are generally not required under Federal or Ohio law to investigate the accuracy of advertisements they air, advertisers must be able to substantiate their claims. If an advertising claim seems “too good to be true,” it is good practice for the broadcaster to request supporting documentation from the advertiser and to consult with the station’s legal counsel before running the advertisement.

Under R.C. § 1345.02(B), it is a deceptive act or practice for a supplier to represent, among other things, any of the following:

• The consumer good/service has sponsorship, approval, performance characteristics, accessories, uses, or benefits that it does not have.
• The consumer good/service is of a particular standard, quality, grade, style prescription or model, if it is not.
• The consumer good/service is new or unused, if it is not.
• The consumer good/service is available for a reason that does not exist.
• A specific price advantage exists, if it does not.
• The consumer good/service has or does not have a warranty or other rights or remedies, if the representation is false.

Under R.C. § 1345.03(B), it is an unconscionable act or practice when a supplier does any of the following:

• Knowingly takes advantage of the inability of a consumer to reasonably protect the consumer’s interest because of the consumer’s physical or mental infirmities, ignorance, illiteracy or inability to understand the language of an agreement,
• Knowing at the time of the consumer transaction that the price for property or services is substantially in excess of the price at which similar property or services is readily obtainable in similar transactions by like customers,
• Knowing at the time of the consumer transaction of the inability of the consumer to receive a substantial benefit from the subject of the consumer transaction,
• Knowing at the time of the consumer transaction that there is no reasonable probability of payment of the obligation in full by the consumer,
• Requiring the consumer to enter into a consumer transaction on terms the supplier knows are substantially one-sided in favor of the supplier,
• Knowingly making a misleading statement of opinion on which the consumer is likely to rely to the consumer’s detriment, or
• Without justification, refusing to make a refund in cash or by check for a returned item, unless the supplier had conspicuously posted, at the time of the sale, a sign stating the supplier’s refund policy.

OAC Rule 109:4-3-02(B) provides that advertisements broadcast on radio, television or an online or digital medium must be preceded or immediately followed by a conspicuously clear oral or written statement of material exclusions, reservations, limitations, modifications or conditions. Oral disclosures in audio or audiovisual advertisements must be spoken with sufficient deliberateness, clarity, and volume so as to afford a consumer a reasonable opportunity to hear and understand them. Written disclosures in audiovisual advertisements should appear in a form and for a duration sufficient to afford a consumer a reasonable opportunity to read and understand them.

The following are examples of the types of material exclusions, reservations, limitations, modifications, or conditions of offers which must be clearly stated:

• In the case of a motor vehicle, the amount of any additional charge for features displayed in the advertisement;
• In the case of clothing, any additional charge for sizes above or below a certain size;
• In the case of floor covering, any additional charge for room sizes above or below a certain size;
• In the case of consumer goods/services sold from more than one outlet under a supplier’s control, which outlets within the advertisement’s coverage area (i) have or do not have features mentioned in the advertisement and (ii) charge rates higher than the rate mentioned in the advertisement;
• In the case of consumer goods/services sold from outlets not under the supplier’s control, a statement that the item is only available from participating independent dealers;
• If an advertised price is available only during certain periods, that fact must be stated along with the days and hours when such price is available;
• If more than one item is featured and the advertised price applies only if all items are purchased (for example, a table and chairs), that fact must be stated;
• If a minimum or maximum amount must be purchased to receive an advertised price, that fact must be stated;
• If the advertised price includes a trade-in, that fact must be stated;
• Any additional charges for delivery or mail orders must be disclosed; and
• If the advertisement offers a rebate that requires repeat purchases by the consumer, that information must be disclosed, including the required number of purchases, the amount of each purchase, the period during which the purchases need to be made and any other actions required by the consumer to redeem the rebate.

On any online or digital medium, the material exclusions, reservations, limitations, modifications or conditions should be as near to, and if possible on the same screen, as the offer (see OAC Rule 109:4-3-02(D)).

Yes, but only in conformity with OAC Rule 109:4-3-04. This Rule provides, among other things, that:

• The word “free” is not to be used if the cost of the offer is passed on to the consumer by raising the regular (base) price of the goods or services that must be purchased in connection with the “free” offer.
• All terms and conditions upon which receipt of “free” consumer goods/services are contingent must be set forth clearly and conspicuously at the outset of the offer.
• The regular quality of the consumer goods/services cannot be reduced.
• Continuous or repeated “free” offers are prohibited, but nondeceptive, “combination” offers in which two or more items of goods/services are offered as a single unit for a single price are permitted.

Further, a station should be aware of 16 C.F.R. § 251.1 (set forth in the Appendices at the end of this section), which provides similar federal law restrictions on the use of the word “free.”

Yes.  OAC Rule 109:4-3-06(A) states that it is a deceptive act or practice for a supplier, in connection with a consumer transaction, to notify a consumer or prospective consumer that he or she has won, been selected, or is eligible, to win a prize or receive anything of value if the receipt of the prize or thing of value is conditioned upon the person listening to or observing a sales promotion or entering into a consumer transaction unless the supplier clearly and conspicuously discloses at such time that an attempt will be made to induce the person to undertake a monetary obligation, and the market value of the prize or thing of value.

Further, OAC Rule 109:4-3-06(D) states that a supplier cannot notify a consumer or prospective consumer that he or she has won a prize or will receive anything of value, if such is not the case, or has been selected, or is eligible, to win a prize or receive anything of value, if the receipt of the prize or thing of value is conditioned upon the payment of a service, handling, mailing or similar charge or unless the supplier has clearly and conspicuously disclosed all conditions necessary to win the prize or receive anything of value.

Yes.  The Ohio Attorney General has promulgated rules specific to the sale of motor vehicles. “Motor vehicle” is broadly defined in R.C. § 4501.01(B) and includes automobiles, motor homes, recreational vehicles and motorcycles. A motor vehicle may also be considered a “good” within the meaning of the rules, and, therefore, the general provisions also may be applicable. OAC Rule 109:4-3-01.

Under OAC Rule 109:4-3-16(B), it is a deceptive and unfair practice for a dealer, manufacturer, advertising association or advertising group in connection with the advertisement or sale of a motor vehicle to:

• Advertise an interest rate where the extension of credit is contingent upon qualification without including the disclosure “subject to approved credit” or words of similar import.
• Misrepresent the size, inventory or nature of the dealer’s business including the expertise of the dealer or a dealer’s, manufacturer’s, advertising association’s or advertising group’s ability or capacity to offer price reductions.
• Advertise in a way which could create in the mind of a reasonable consumer a false impression as to any material aspect of the advertised vehicle, or to convey or permit an erroneous impression as to which vehicles are offered for sale at which prices.
• Advertise any motor vehicle for sale at a specific price or on specific terms if the dealer is not in possession of, or has not ordered, said vehicle unless the advertisement clearly and conspicuously discloses that the specific price applies to a vehicle which must be ordered.
• Advertise any motor vehicle for sale at a specific price or on specific terms and subsequently fail to show and make available for sale said vehicle as advertised. (A dealer is required to show and make available its vehicles as advertised regardless of whether the consumer knew about or relied upon such advertisements. Motzer Dodge Jeep Eagle v. Ohio Attorney General, 95 Ohio App.3d 183 (Butler Cty. 1994).)
• Misrepresent the availability of an advertised motor vehicle, or fail to clearly and conspicuously disclose, in any advertisement, that a particular advertised vehicle is not available in stock and must be ordered.
• Represent that advertised motor vehicles are in stock or previously ordered and expected for delivery within a reasonable time unless the dealer has or will have on hand a sufficient supply of the advertised vehicles to meet reasonably anticipated demand, unless the advertisement clearly and conspicuously discloses the exact number of said vehicles on hand as of the last date on which any change can be made in the advertisement.
• Use the terms “MSRP,” “list” or “sticker” in any advertisement except in reference to the manufacturer’s suggested retail price.
• Compare an advertised price for a new motor vehicle to any other price unless the other price is “list,” “sticker,” or “invoice.” An advertised price for a used motor vehicle may not be compared to a “list,” “sticker” or “invoice” price.
• Represent, state or imply in any advertisement that the purchase price is a “savings,” “discount” or like words unless it is a “savings” or “discount” from the “list” or “sticker.”
• Use the word “cost” or words or concepts of similar import, inference, or implication, except “invoice,” which relate to any reference price other than “list” or “sticker” in any advertisements. If a dealer uses the word “invoice” in any advertisement, the dealer must clearly and conspicuously disclose in the advertisement that the invoice price may not reflect the dealer’s actual cost of the vehicle, and must make the actual invoice or a copy thereof available to consumers upon request.
• Fail to disclose, in any advertisement, the model, year and, for current and previous model year vehicles, the fact that the vehicle is used.
• Advertise a price of a motor vehicle unless it includes all costs to the consumer except tax, title and registration fees, and a documentary service charge. A dealer may advertise a price which includes a deduction for a discount or rebate which all consumers qualify for, provided that such advertisement clearly discloses the deduction of such discount or rebate.
• Advertise the price such dealer will pay for any trade-in vehicle unless (i) the price of motor vehicles offered for sale are within the range of prices at which the dealer usually sells said motor vehicles and is not increased because of the amount offered for the trade-in and (ii) the advertised trade-in price will be paid for all vehicles regardless of their condition or age, unless additional conditions are clearly and conspicuously disclosed in the advertisement.
• Advertise the price to be paid for trade-in vehicles as a range of prices.
• Fail to disclose the beginning and ending dates of any sale or other offer for the sale of a motor vehicle. If the dealer states the specific quantity of vehicles available for sale, the dealer is required to disclose only the beginning date of the sale and may disclose the ending date by use of the phrase “while supply lasts.” A dealer is not required to list a beginning date for a sale, if such sale begins on the date the advertisement appears.
• Advertise, represent or offer a rebate, interest reduction program or similar program or procedure in which the dealer financially contributes without the following clear and conspicuous disclosure: “dealer contribution may affect consumer cost,” or other words or terms which convey to the public the effect on consumer’s cost.
• Advertise a price for a conversion van without setting forth separately the “list” price for the vehicle, along with the price for the conversion package or fail to show the discounts or other deductions which are being applied to each of these prices to arrive at the overall advertised price of the vehicle.
• Advertise the price of a new motorcycle or other similar type of new vehicle that is not subject to the Automobile Information Disclosure Act of 1958, without clearly and conspicuously disclosing (i) that the advertised price includes a freight charge and enumerates the amount of the charge or (ii) if the advertised price does not include a freight charge, that such charge will be assessed and enumerates the amount of the charge. If either (i) or (ii) applies, the dealer must make the actual invoice, or a copy thereof, or other documentation furnished by the manufacturer or distributor available to the customer upon request.

A manufacturer may be deemed to be engaging in deceptive and unfair acts or practices in connection with the sale of a motor vehicle if it:

• Advertises the price of a vehicle and represents or implies that it is available at a specific dealer, unless a sufficient number of vehicles is available at each specified dealer to meet reasonably anticipated demand or unless the advertisement clearly and conspicuously discloses that said vehicle is not immediately available for delivery and must be ordered.
• Advertises the price of a vehicle unless the advertised price includes all charges to be paid by the consumer including freight, handling and dealer preparation or the advertisement clearly and conspicuously discloses that the advertised price is a suggested base price or that the advertised price does not include charges for freight, handling, dealer preparation or any optional equipment.
• Advertises, represents or offers a rebate, interest reduction or similar program in which the dealer financially contributes without the following clear and conspicuous disclosure: “manufacturer’s condition of dealer contribution may affect consumer cost,” or other words or terms which convey to the public the effect on consumer’s cost.

Finally, the rules state that, in advertising a closed-end credit (purchase) transaction on radio or television, a dealer, manufacturer or advertising association or group must comply with Regulation Z of the federal Truth-In-Lending Act and must clearly and conspicuously disclose the amount of any down payment, the number of payments, the monthly payment and the annual percentage rate (which may be abbreviated as A.P.R.).  OAC Rule § 109:4-3-16(D).

The Ohio Attorney General has issued “Guidelines for Motor Vehicle Advertising,” which can be found at https://www.ohioattorneygeneral.gov/Files/Publications-Files/Publications-for-Business/Guidelines-for-Motor-Vehicle-Advertising-(PDF).

Advertisements of leases must comply with Regulation M of the federal Truth-In-Lending Act, and must clearly and conspicuously disclose the fact that the transaction is a lease, the amount due at lease inception, the number of payments and the monthly payment (“All remaining required disclosures may be set forth in a footnote to such advertisement, which must be in close proximity to the advertised vehicle in any printed or television advertisement.” § 109:4-3-16(D).)

OAC Rule § 109:4-3-16(D); see 15 U.S.C. § 1667c (Federal law requires, among other things, clear and conspicuous disclosure that “the transaction advertised is a lease; the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later; that a security deposit is required; the number, amount, and timing of scheduled pay­ments; and with respect to a lease in which the liability of the consumer at the end of the lease term is based on the anticipated residual value of the property, that an extra charge may be imposed at the end of the lease term.” 15 U.S.C. § 1667c(a).)

Yes.  Generally speaking, motor vehicles may not be displayed for sale or offered for sale anywhere except at a licensed motor vehicle dealer. R.C. 4517.02.

There are several exceptions to this general rule:

(1) At a motor vehicle show (as defined in R.C. 4517.22), the primary purpose of which is the display of multiple competitive makes and models. C. 4517.22(B) (set forth in the Appendices at the end of this section).

(2) At a manufacturer’s display at which only a single make of vehicle may be displayed. Written permission from the Ohio Bureau of Motor Vehicles must be sought 30 days prior to such a display by a manufacturer of motor vehicles, and no sales activity may take place in connection with such a display. C. 4517.22(E) (set forth in the Appendices at the end of this section).

(3) At an annual county fair according to the provisions of R.C. 4517.22(K) (set forth in the Appendices at the end of this section).

(4) At a location other than the dealer’s established place of business, provided that the purpose of the display is to promote or benefit a charitable or civic purpose, not more than six vehicles are displayed, and the other provisions of R.C. 4517.221 (set forth in the Appendices at the end of this section) are complied with.

The FCC has taken no position on the advertising of fireworks and, generally, the advertising of fireworks is a matter of state law assuming that the fireworks which are being advertised are legal under the Federal Hazardous Substance Act (the “FHSA”). If a station aired an advertisement for the sale of fireworks and those fireworks were subsequently found to be illegal under the FHSA, then the station could be found liable for aiding and abetting the sale of illegal fireworks or possibly a FTC claim for false, misleading or deceptive advertising.

There are no provisions in the Ohio Revised Code or the Ohio Administrative Code which prohibit the advertising of the sale of fireworks. A retailer of fireworks must be licensed with the Ohio Division of State Fire Marshal, and a station should confirm that a specific retailer is so licensed prior to running an advertisement for that retailer. Lastly, the Ohio Division of State Fire Marshal has informed the OAB Ohio Info-Line, that there can be no internet sales of fireworks or sales of commercial grade fireworks; accordingly, the advertisement cannot indicate or imply otherwise.

Despite the fact that there are no State of Ohio laws or regulations prohibiting the advertising of the sale of fireworks, stations should be aware that cities and townships may have ordinances which prohibit any person from advertising the sale of fireworks.

While the sale of firearms is regulated by federal law, no federal laws specifically apply to broadcast stations. Instead, federal law applies to persons and entities that engage in firearms transactions. At the state level, R.C. §§ 2923.11 through 2923.25 govern the possession of firearms in Ohio, but there are no provisions in the Ohio Revised Code or the Ohio Administrative Code which prohibit the advertising of the sale of firearms. Although neither federal nor Ohio laws place any affirmative duty on broadcasters, it is good policy to confirm whether a potential advertiser of firearms is appropriately licensed. If they are not so licensed, broadcasters should consider whether it is prudent to run the advertisement, especially given the geographic restrictions unlicensed sellers of firearms face. Additionally, a station may wish to consult with its legal counsel regarding the content of the advertisement and the potential public relations implications of airing a firearms advertisement in its target market.

Yes.  Other rules specifically regulate:

• Bait advertising/unavailability of goods. OAC Rule 109:4-3-03
• New for used. OAC Rule 109:4-3-08
• Failure to deliver; substitution of goods or services. OAC Rule 109:4-3-09
• Price comparisons. OAC Rule 109:4-3-12
• Motor vehicle repairs and services. OAC Rule 109:4-3-13
• OAC Rule 109:4-3-14
• Motor vehicle rust inhibitor. OAC Rule 109:4-3-15
• Distress sale. OAC Rule 109:4-3-17