With this hearing, the committee continues to highlight the Federal Trade Commission’s role in protecting the American people, especially at a time of unprecedented economic crisis. Last week, we explored the increasing frequency and danger of economic fraud and financial scams during tough times.
Today, we will examine deceptive advertising and its power to undermine consumers’ confidence.
Empowering consumers with accurate information is essential to a fair and thriving marketplace. But when that information can no longer be trusted, consumers become vulnerable to manipulation, and bad actors have the opportunity to take advantage of them.
Unfortunately, there is no limit to the tricks and ploys that deceptive advertisers may use to rope consumers into bogus opportunities and dangerous investments: elaborate “bait and switch” techniques, advertisements masquerading as news articles, advertisers paying bloggers to endorse certain products, false or deceptive testimonial advertising, “free” product advertising and false or deceptive marketing of “green” products.
With each false claim or inflated promise, consumers lose faith in the marketplace, the information they use to make decisions and the government they expect to keep these scam artists in check.
The impact of deceptive advertising reaches beyond any one individual who buys into it. Fraud seriously hurts legitimate businesses trying to compete and does lasting damage to our economy.
I hope that with this hearing we can learn more about the Commission’s efforts to crack down on deceptive advertisers and consider whether it has the resources and the authority it needs.
And a special thanks to Subcommittee Chairman Pryor for presiding today and being such an outspoken advocate for the American consumer.
I want to thank our witnesses for sharing their perspective on these issues as we discuss the Commission’s most fundamental responsibility: protecting the American consumer.