The U.S. Securities and Exchange Commission (SEC) has announced new rules to protect consumers from misleading advertising, which will be enforced from September 1.
The rules, which were announced on Monday by the SEC’s enforcement division, aim to stop the misleading advertising of health care products and services by placing stricter standards on how advertisers can use the agency and marketing techniques that can be used to target customers with misleading advertising.
In the past, companies that engaged in misleading marketing or offered false or misleading advertising had faced penalties ranging from fines to the removal of their advertising contracts.
According to the new rules, the SEC will no longer require companies to take action against individuals who engage in misleading ads.
Instead, the agency will focus on the actions companies can take to prevent the same type of behavior from occurring in the future.
The new rules also mandate that companies with at least $5 billion in annual revenue will have to have a policy that requires them to post a disclaimer on their websites stating that any ads that include misleading information are not intended for consumers.
The disclaimer must be clearly displayed in the ad, according to the rules.
Advertising will also have to be more targeted and include more accurate information about the product and services offered, such as the brand and size of the company or product, the brand name, or the age of the product or service.