Risks of False Advertising

January 1, 2004

3 Min Read
Risks of False Advertising

It's the beginning of a new year and the time when storage owners start refreshing their advertising campaigns. Most use some form of advertising to attract new customers and create recognition for their facilities. Whether your advertising is elaborate or subtle, you want to make your dollars stretch by advertising right and avoiding the pitfalls and risks.

Some owners and managers are not aware of laws and regulations that govern advertising. Violations can create severe penalties and litigation. Most likely, your self-storage insurance policy provides some protection, but it doesnt hurt to take precautions before planning your campaign.

The risk of advertising is heightened if an ad is false or misleading. It is illegal for an advertisement to make unsubstantiated claims or fail to include details of an offer. An advertisement is considered false or misleading if the public is likely to be deceived. Even if the ad is true in a literal sense, it does not prevent it from being deceptive. Keep in mind the overall image and placement of words and text can make an otherwise innocent advertisement ambiguous. Although it seems simple, advertising requirements are often subtle and contain downfalls for the unwary. So the next time you develop a catchy new ad, consider the way the message will be perceived.

One way to avoid potentially deceptive statements is to use disclaimers, which can clarify statements or claims made in an advertisement. A disclaimer should list the requirements to qualify for an offer or the restrictions on its availability. For example, to catch potential customers attention, you advertise one month of free rent to all first time tenants. The free month would be the second month to discourage people from storage hopping; but because a lot of readers may assume the first month is free, you should put an asterisk by the claim and place the appropriate disclaimer somewhere in the advertisement so customers understand how the offer works.

Keep in mind that disclaimers cannot correct inaccurate or false information in an advertisement. Care must also be taken so if a customer is supposed to receive a product for free, he actually does. For example, if you offer one month of free rent, that unit must be rented for the regular price at all times and cannot be increased to recover the cost of the free month.

Be careful with testimonials, claims and the use of the words such as promise or guarantee. Testimonials or other claims must be true and capable of being authenticated. For example, if you decide to advertise the safety and security of your facility, make sure you can back up that claim.

To ensure further protection from claims of false advertising, you may want to consider taking out higher limits of business-liability insurance. This coverage, included in your insurance policy, can provide important protection against lawsuits involving libel, slander, physical eviction or the false arrest of a third party; and advertising-injury lawsuits involving plagiarism, copyright infringement and false advertising. (Note that while libel, plagiarism, etc., may not seem like bodily or property damages, that is how the courts have interpreted them.)

If you are found liable in a lawsuit, business-liability insurance might cover those sums you become legally obligated to pay up to the limits of your policy. In short, it protects your business, your assets and your peace of mind.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, write P.O. Box 40079, Phoenix, AZ 85067-0079; call 800.844.2101; fax 480.970.6240; e-mail [email protected]; visit www.vpico.com/universal.

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