Report on FTC Workshop on Testing to Make Disclosures More Effective

A continuing issue in consumer protection is that disclosures may convey the required information, but consumers may ignore them, so they have no impact.  The FTC held a workshop last week to look at how to test disclosures to make them more effective.  Ad Law Access has posted a report on the Workshop, Beyond “Clear and Conspicuous”: FTC Workshop Highlights Issues Related to Testing of Consumer Disclosures.   Excerpt:

In opening the workshop, [FTC ]Chairwoman [Edith] Ramirez identified three primary goals of disclosures: (1) ensure that consumers see or hear the disclosure; (2) convey information in a manner that promotes consumer understanding of the disclosure’s content; and (3) facilitate consumer’s use of the information to make informed choices.  * * * 

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Some speakers noted that even disclosures that comply with the FTC’s clear and conspicuous standard may still be ineffective at communicating necessary information to consumers.  Chairwoman Ramirez suggested that use of disclosures in certain areas may be inappropriate altogether, although she declined to specify those areas.  Other speakers emphasized the ways that effective disclosures can benefit consumers by preventing advertisements from being deceptive, communicating privacy policies, and providing consent mechanisms.  Private research also suggests that there may be additional benefits to businesses from effective disclosures through improved market differentiation and customer satisfaction.  Some disclosures, however, may have adverse consequences like increasing complexity, producing consumer confusion, and creating unintended biases.

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