The Federal Trade Commission sued marketing agency Traffic Jam Events, alleging that the agency deceived consumers by sending out mailers which appeared to provide information about how to obtain federal COVID-19 stimulus benefits, but which instead lured them to a used car sale. (We previously blogged about the Florida Attorney General's lawsuit against Traffic Jam Events arising out of this promotion.)
The FTC alleged that Traffic Jam Events sent direct mail pieces that were labeled, “IMPORTANT COVID-19 STIMULUS DOCUMENTS” and that directed consumers to “relief headquarters” to “claim these stimulus incentives.” The FTC also alleged that the marketing agency also used the Great Seal of the United States in the mailer along with a mock check labeled, “Stimulus Relief Program." The FTC said that when consumers arrived at "relief headquarters," however, all they found was a used car sale.
In its lawsuit, the FTC alleged that Traffic Jam Events violated Section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices in or affecting commerce." The FTC alleged that the agency deceived consumers by misrepresenting that they are receiving:
- Official COVID-19 stimulus information
- COVID-19 stimulus relief; and
- A mailer that is affiliated or associated with, or approved by, the United States government.
As the FTC continues an unprecedented level of enforcement arising out of the COVID-19 pandemic, this action is an important reminder that advertising and marketing agencies can also be held liable for false advertising under the FTC Act. As FTC Senior Attorney Lesley Fair wrote on the FTC's blog, "the FTC has taken action against illegal conduct by advertising agencies, public relations firms, industry-specific promotional businesses, and others in the marketing ecosystem."
"Marketing companies are subject to the FTC’s prohibition on deceptive and unfair practices" -- FTC Senior Attorney Lesley Fair