FTC basics
This is the three-letter abbreviation for the Federal Trade Commission.
What is the FTC?
An ad must be truthful and not leave out important information, or it could be called this.
What is deceptive or misleading
True or False: The FTC says you should never share your password with friends.
True.
If someone calls saying you won a prize but asks for money first, what is that likely to be?
A scam.
Why does the FTC want businesses to compete fairly?
So consumers get better products, lower prices, and more choices
The FTC is a U.S. government agency whose main job is to protect these two groups.
Who are consumers and businesses
What should an ad tell you if a celebrity is being paid to promote a product?
It should clearly disclose that it’s a paid advertisement.
If a game app asks for your home address and you’re under 13, what law says they need your parent’s permission?
COPPA (Children’s Online Privacy Protection Act).
What does “identity theft” mean?
When someone uses your personal information (like your Social Security Number) without permission.
If two big companies secretly agree to charge the same high price, what is that called?
Price fixing
This word describes when a company tries to hurt another company by making false claims, which the FTC can investigate.
What is unfair competition?
If a store advertises a “HUGE SALE” but never actually lowers prices, is that deceptive?
Yes, that could be a deceptive advertising practice.
What does “phishing” mean, and why does the FTC warn about it?
Phishing is when scammers try to trick you into giving personal info through fake emails or websites.
The FTC runs a website where you can get free resources to help avoid scams. What is it called?
What does a “monopoly” mean, and why might the FTC step in?
When one company controls almost all of a market, which can hurt competition; the FTC may investigate.
The FTC enforces these, which are rules created by Congress, such as the one that protects children's privacy online.
What are laws
The FTC says ads aimed at children must be especially careful not to be __________.
misleading or unfair.
What should you do if you see an online ad that looks like a news article but is really an ad?
Recognize it as “native advertising” and check for labels like “Ad” or “Sponsored.”
If a business doesn’t deliver a product you paid for online, what step does the FTC recommend you take first?
Contact the company to try to resolve it, then report to the FTC if unresolved.
What is “bid rigging” and why is it anticompetitive?
When competitors agree in advance who will win a contract, leading to higher prices
If you have a complaint about a scam or bad business practice, you can report it directly to the FTC through this website.
What is ReportFraud.ftc.gov?
What is the name of the FTC rule that requires companies to clearly explain the terms of a “free trial” before you sign up?
The Negative Option Rule (related to free trials and automatic renewals).
What is “Do Not Track” and can the FTC enforce it?
It’s a browser setting asking websites not to track you, but the FTC cannot force companies to obey it—they encourage voluntary compliance.
What is the “Cooling-Off Rule”?
A rule that gives you 3 days to cancel a purchase of $25 or more if it was made at your home or a location away from the seller’s store.
Besides stopping unfair mergers, name one way the FTC promotes competition among small businesses.
It educates businesses about antitrust laws or takes action against large companies that try to unfairly push out smaller ones.