IV. Consumer Products and Transactions
Included below are scenarios and answers to questions about advertising consumer products and transactions, provided by the OAB’s Ohio counsel of Vorys, Sater, Seymour and Pease, LLP.
This Guide does not constitute legal advice from the OAB or its legal counsel with respect to any specific advertisement and does not establish an attorney-client relationship between any member and OAB legal counsel.
If you have any questions about any of the issues raised in this section, or have an issue not covered below, please call the OAB Ohio Info-Line at 866-OAB-5785 (please identify yourself as an OAB member).
1. Are radio and television stations liable under Ohio law for false or inaccurate statements made in advertisements of consumer transactions broadcast by them? 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.
2. What generally constitutes a deceptive or unconscionable act or practice in a consumer transaction under Ohio law? 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: Under R.C. § 1345.03(B), it is an unconscionable act or practice when a supplier does any of the following:
3. Are there specific statements that must be made in certain types of advertisements? 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: 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)).
4. May an advertisement use the word “free” or other words of similar import? Yes, but only in conformity with OAC Rule 109:4-3-04. This Rule provides, among other things, that: 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.”
5. Are there any special rules governing prizes? 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.
6. Are there any special rules governing motor vehicle advertising? 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: 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: 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).)
7. Are there restrictions on the locations at which motor vehicles can be displayed? 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.
8. Are there any restrictions on advertising the sale of fireworks? 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.
9. Are there any restrictions on advertising the sale of firearms? 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.
10. Are there any special rules governing other consumer transaction advertisements? Yes. Other rules specifically regulate:
Appendix E: Excerpts From Ohio Consumer Sales Practices Act →
Appendix F: Selected Provision of Code of Federal Regulations →
Appendix G: Selected Ohio Revised Code Provisions Governing Displays of Motor Vehicles →