How to Keep Your Clients Out Of Legal Trouble

It helps to ask the right questions before you work on an advertising campaign. Ignorance of the law has a way of coming back to haunt you.


Bad advertising advice can put you in handcuffs


 Today’s Sales Training Lesson: How I Got Burned in a Presentation


Five years ago, I had a great promotion idea for an auto dealer in San Diego. The dealer was a baseball fan, his brand had a great fit with the sport, and I had a concept that was going to bring it all together.

The presentation got off to a great start, and I went through the details of the promotion flawlessly. I got to the end and asked for the commitment.

That’s when he dropped the bomb: “Nice idea, Phil. But it’s against the law to do a gift-with-purchase on a car sale in California.” Presentation over. Sale denied. It took me a while to get over that one.

It was embarrassing for me, but as an out-of-town consultant I wouldn’t necessarily be expected to know the laws of the state of California. But the account executive – a California resident – didn’t know the rules. And the sales manager – a California resident – didn’t know.

Frankly, we were lucky — somebody knew the law.  It would’ve been much worse if the client had agreed to do the promotion, run a heavy advertising schedule on the station,  and then gotten fined by California regulators.

Traveling the country, I frequently run into account executives and managers who don’t know the rules. In big picture terms, there are three common categories of pitfalls:

  1. Financing Offers: the federal Truth in Lending Act has specific rules governing what you can and cannot say in a finance offer. The most common examples are credit offers for things like automobile and furniture sales. There are specific “TILA Trigger Terms” that require specific disclosures in an ad. In addition to the federal requirements, many states have their own laws regarding this.
  2. Use of Copyrighted Material: It certainly sounds like a great idea to use one of today’s hit songs, or a classic rock tune, as the music bed for your commercial. Unfortunately, you can’t do that unless you have permission, and that permission involves paperwork and often an exchange of money. I ran into this all the time when I was a radio account executive, and it was easy for me then – I just wouldn’t let the client do it. In my current work I see this all the time. While I’m not surprised that, say, a furniture store owner doesn’t know what the rules are, I’m distressed at how many account executives, sales managers, and even production directors have no idea that they can’t do this… or don’t care.
  3. Local Quirks: Dentists in the state of Texas are not allowed to do testimonial advertising. For other doctors this is okay, but not for dentists. As I mentioned earlier, auto dealers in some states can do a “gift-with-purchase” offer, while in other states they can’t. Each locality has its own goofy way of doing business, and you need to know your home states quirks.

[bctt tweet=”Know the rules. The right information can keep your client out of legal hot water.”]

Dan O’Day recently told the story of a radio market manager who knew it was against the law to use a hit song in an ad, and decided to “take his chances”. As O’Day pointed out: “That guy wasn’t taking just his chances. Everyone involved in a violation of someone’s copyright can be held liable — including the huge radio company that owned this guy’s cluster…and that had very deep pockets.”

 Help Your Clients Keep The Advertising Legal

There are places you can go to learn the most important rules:

1. Local or state industry association or trade groups. Ask your client what groups he or she belongs to. Examples: for auto dealers, there may be someone you can talk to it at the New Car Dealers Association for your area. Most states also have a Real Estate Association.

2. Media organizations. For example, if you work in radio or TV, there is usually a state Association of Broadcasting.

3. Your own company’s legal department. This, of course, assumes that your company has one. But most of the big ones do, and they would prefer not to be sued. Talk to your manager and see if there is someone at Corporate who can help you.

4. Government regulators. There is probably someone at the state or local level in charge of consumer fraud issues. Your client may know who that is. Sometimes it’s as simple as asking.

A radio, TV, or digital sales rep is not an attorney, and no one expects you to be one. But you want to avoid nasty surprises whenever possible. A little knowledge can go a long way.

UPDATE 4-10-15: It is important to point  out that I am not an attorney, and I’m not qualified to give legal advice. This is not legal advice. It is just… advice. If you want actual legal advice, the best thing to do is talk to an actual attorney.


Question: What’s the oddest legal quirk in your market? You can leave a comment by clicking here.


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