Every FTC Consumer Protection Audit check

FTC Act §5 prohibits deceptive acts that mislead a reasonable consumer in any material way — intent is irrelevant. Unsubstantiated performance guarantees ('Save 10 hours per week — guaranteed'), capability overclaims ('AI-powered' applied to a rule-based filter), and unverified superlatives ('#1 tool for X') expose the company to FTC enforcement, civil investigative demands, and potential consent orders requiring corrective advertising. Beyond legal risk, a consumer who tries the product and finds the claims false files chargebacks, leaves one-star reviews, and churns — compounding the business damage.

Why this severity: Critical because deceptive capability or performance claims violate FTC Act §5 on first exposure, creating direct enforcement liability and triggering consumer harm that cannot be reversed by a later correction.

Drip pricing — revealing fees incrementally through the checkout funnel — is an active FTC enforcement priority under FTC Act §5 and the MITA (Mend it, Tag it, Advertise it) framework. A consumer who sees '$19/month' on the pricing page and '$24/month' at checkout confirmation has been materially misled: they entered the funnel under a false price premise. Beyond FTC exposure, hidden fees drive cart abandonment, chargebacks, and negative reviews at the exact moment of purchase — the highest-value touchpoint in the funnel.

Why this severity: Critical because price misrepresentation at checkout constitutes a deceptive act under FTC Act §5, and the MITA framework specifically targets undisclosed mandatory fees as a primary enforcement vector.

The FTC's Free Offer guidelines and Negative Option Rule both require that conditions on 'free' offers be clearly and conspicuously disclosed at the outset — not in a linked terms document. A 'Start for free' CTA that routes to a credit card form without disclosing the post-trial charge amount and date is a textbook Negative Option Rule violation. Consumers who discover a charge they didn't understand will initiate chargebacks, dispute the charge with their bank, and leave fraud-flagged reviews — all of which carry downstream payment processor consequences beyond the FTC exposure.

Why this severity: High because undisclosed post-trial charges directly violate the FTC's Negative Option Rule, and the deceptive omission occurs at the highest-trust moment in the funnel — the moment a consumer decides to try the product for free.

FTC Act §5 and FTC comparative advertising guidance require that claims about competitor products be truthful, verifiable, and not misleading. A comparison table that marks a competitor feature as absent when that feature shipped six months ago exposes the company to FTC action and potential trade libel claims under state law. Stale competitor pricing shown as a cost comparison can constitute deception if the competitor reduced their price and the claim is now materially false. These claims are high-profile and easy for competitors or journalists to fact-check.

Why this severity: Medium because comparative claim inaccuracy, while deceptive under FTC Act §5, typically requires a consumer to cross-reference the competitor to discover the error — lowering immediate harm probability compared to direct product misrepresentation.

The FTC's Endorsement Guides (updated 2023) require that when a testimonial describes results a consumer would not generally achieve, the advertiser must either disclose what typical results are or clearly indicate the testimonial is exceptional. A homepage testimonial claiming '$80,000 in the first month' with no context implies that result is achievable for buyers — a material misrepresentation. Review-gating flows that only invite satisfied customers to leave public reviews compound the problem by artificially inflating the average star rating, which the FTC also considers deceptive.

Why this severity: Low because the harm requires consumers to act on the atypical testimonial without noticing the absence of disclosure, a multi-step inference — but cumulative across many consumers the deception is material.

The FTC requires disclosure of any 'material connection' — payment, free product, significant discounts, or employment — that could affect the credibility of an endorsement. A case study from a customer receiving a 50% discount presented without disclosure implies independent validation it does not carry. 'As featured in' sections that mix paid placements with earned editorial coverage mislead consumers into thinking independent press has evaluated the product. Material connection disclosures must appear where the consumer sees the endorsement — not in a general site footer or terms page.

Why this severity: High because undisclosed material connections in case studies and endorsements directly violate the FTC Endorsement Guides, and the content actively signals credibility that the commercial relationship undermines.

The FTC Endorsement Guides require affiliate disclosures to be 'clear and conspicuous' and placed where consumers see them before they click — a footer link to a 'Disclosure Policy' page does not meet this standard. A resource page or blog post with undisclosed affiliate links deceives consumers into thinking the recommendations are independent when they generate commissions. This is a direct Endorsement Guides violation that the FTC has actively enforced against publishers, bloggers, and software companies recommending partner tools.

Why this severity: High because undisclosed affiliate links misrepresent the commercial nature of recommendations at the decision point — the moment the consumer is about to click — making the deception immediate and material.

The FTC's Fake Reviews Rule (2024) and Endorsement Guides both prohibit fabricated, purchased, or undisclosed-incentive reviews. A testimonial section with no verifiable attribution, an admin panel that creates testimonial records without user submissions, or a review invitation offering a gift card without disclosing that incentive on the review platform each constitute distinct FTC violations. Beyond enforcement risk, the FTC Fake Reviews Rule allows the agency to seek civil penalties — up to $50,120 per violation — making this category one of the highest per-instance liability items in consumer protection compliance.

Why this severity: Critical because fabricated reviews are a named violation under the FTC's 2024 Fake Reviews Rule with per-violation civil penalty exposure, and they corrupt the information environment that consumers rely on to make purchasing decisions.

The FTC Endorsement Guides hold advertisers liable for influencer disclosures even when the influencer fails to disclose — if the brand did not take reasonable steps to require and monitor compliance. A creator program that pays commissions but provides no disclosure guidance in its terms exposes the brand to FTC enforcement every time a partner posts without #ad or #sponsored. Embedded influencer social content on the site that lacks a disclosure label is an additional violation on the brand's own property, where the brand has direct control.

Why this severity: Medium because influencer disclosure violations require a specific partnership to exist and a consumer to rely on undisclosed promotional content, but the FTC Endorsement Guides explicitly hold brands responsible for their partners' compliance failures.

The FTC's 2024 Fake Reviews Rule explicitly treats AI-generated reviews the same as any other fabricated review — the generation method does not create a carve-out. An AI-generated review summary displayed in a 'What our customers are saying' section, without disclosure, leads consumers to believe they are reading distilled human opinion when they are reading AI output. AI-generated placeholder testimonials left on a landing page compound the violation by fabricating the appearance of an actual user base. Both scenarios create direct FTC Fake Reviews Rule liability.

Why this severity: Medium because AI-generated review content presented as human opinion is treated as fabricated reviews under the FTC's 2024 Fake Reviews Rule, but the harm depends on whether consumers act on the AI output as if it reflected real user experience.

The FTC's updated Negative Option Rule (2024) requires that subscription billing amount, frequency, and next charge date be visible before the user provides payment information — not after. A checkout flow that collects the credit card before showing recurring terms has violated the rule at the moment of collection. Trial-to-paid conversions with no advance notice leave consumers with no opportunity to cancel before the charge occurs. These failures generate chargebacks at the highest rate of any billing pattern and trigger payment processor reviews that can result in merchant account termination.

Why this severity: High because hiding recurring billing terms before payment collection violates the FTC Negative Option Rule at the moment of the transaction — a point of no-return for the consumer — creating both regulatory and payment processor liability.

The FTC's updated Negative Option Rule (2024) — commonly called the Click-to-Cancel rule — explicitly requires that cancellation be 'at least as easy' as the original enrollment. A checkout that takes 2 minutes online but requires a support ticket to cancel is a per-subscriber violation. Cancellation flows with three or more confirmation screens, mandatory 'tell us why' forms, or retention specialist gatekeeping each constitute prohibited friction. Beyond FTC exposure, high-friction cancellation increases chargebacks and negative reviews from frustrated users who feel trapped.

Why this severity: Medium because cancellation friction must be evaluated against enrollment complexity to constitute a violation — a subscription with a complex setup might support a more involved cancellation — but online-signup products with support-ticket cancellation clearly fail the FTC's symmetry requirement.

Confirm shaming — labeling the 'decline' button with language designed to make the user feel guilty, inadequate, or foolish ('No thanks, I prefer to stay limited') — is identified in the FTC's Dark Patterns Report as a manipulative interface design that undermines informed consumer choice. The FTC Act §5 unfairness prong covers practices that cause substantial consumer injury not outweighed by benefits. While individual instances seem minor, confirm shaming at scale across millions of upgrade prompts constitutes a systematic manipulation of consumer decision-making that the FTC treats as an unfair practice.

Why this severity: Low because confirm shaming harms consumers through psychological manipulation rather than direct financial loss, and a single instance rarely triggers enforcement — but the pattern is identified by the FTC and signals a design culture that tolerates dark patterns elsewhere.

Pre-checked paid add-ons where the cost is only visible in the order total — not adjacent to the checkbox — are identified in the FTC's Dark Patterns Report as a manipulative checkout pattern. The Negative Option Rule also applies when a pre-checked add-on carries a recurring charge. Pre-checked marketing opt-ins at checkout additionally violate GDPR consent requirements for EU users and the CAN-SPAM Act's opt-in standards. These patterns collectively drive consumer complaints, chargebacks, and regulator attention across multiple frameworks.

Why this severity: Low because discovering a pre-checked add-on requires active user attention during checkout rather than post-purchase, reducing immediate harm — but the pattern is explicitly called out in the FTC Dark Patterns Report and compounds with Negative Option Rule exposure for recurring charges.

FTC Act §5 treats unreasonably restrictive refund policies as unfair practices when they cause substantial consumer injury. An annual subscription with a '24-hour refund window' or a refund policy buried only in the Terms of Service deprives consumers of the recourse they would reasonably expect. For SaaS products, the industry-recognized minimum is 7 days for monthly plans and 30 days for annual plans. Inaccessible refund policies also surface in payment disputes: Stripe and other processors weigh policy accessibility when adjudicating chargebacks — a buried policy increases chargeback loss rates.

Why this severity: Info because refund policy deficiencies cause harm indirectly through consumer dispute escalation rather than at the moment of purchase, and enforcement typically follows a pattern of complaints rather than a single unreasonable policy.

The FTC's 2024 AI guidance distinguishes between AI as a writing tool and AI-generated content that would be material to a consumer's decision — such as a founder letter, an expert opinion, or personalized outreach implying individual human judgment. A blog post attributed to a named human author but generated by an LLM, or a CEO voice email campaign written by AI, deceives consumers about the source of the advice they are relying on. Where authorship is a credibility signal, the FTC Act §5 deception standard applies to AI authorship just as it does to fabricated human authorship.

Why this severity: Low because AI authorship deception requires consumers to make decisions based on implied human expertise they would not have followed if they knew the source — the harm is real but depends on the weight the consumer placed on the implied authorship.

The FTC has flagged fully automated consequential decisions without explanation or recourse as unfair practices under FTC Act §5, and GDPR Article 22 creates a legal right for EU users to human review of automated decisions with significant effects. Algorithmic pricing that shows different prices to different users without disclosure, automated content moderation with no appeal path, and behavioral scoring that assigns service tiers without explanation each expose consumers to material harms they have no mechanism to identify or contest. The combination of FTC unfairness doctrine and GDPR Article 22 creates dual-jurisdiction liability for products with EU users.

Why this severity: Low because automated decision harms require the consumer to experience an adverse outcome and be unable to identify its source — multi-step harm that is real but not immediate — though the FTC's increasing focus on algorithmic systems raises the trajectory of enforcement risk.

The FTC Act §5 deception standard applies when an AI chatbot leads a consumer to believe they are speaking with a human — a material misrepresentation that affects how much weight they give to the 'agent's' responses. California's BOT Disclosure Act additionally creates state-law liability for bots that interact with California consumers without disclosure. A system prompt that instructs the AI to claim to be a support team member, or a chatbot with a stock photo avatar and human name but no AI label, violates both the FTC standard and an increasing number of state disclosure laws.

Why this severity: Info because AI persona deception requires the consumer to actively rely on the implied human judgment before harm occurs — but the FTC Act §5 violation exists at the moment of misrepresentation regardless of whether the consumer suffers additional downstream harm.

The FTC's 2024 AI guidance specifically targets 'AI washing' — labeling products as AI-powered when they use simple rules or templates with no ML component. This is an FTC Act §5 deceptive claim that inflates perceived product value and misleads purchase decisions. Beyond AI washing, overpromising accuracy ('99% accurate') without disclosing error rates or limitations creates material risk when the AI fails — particularly in high-stakes domains (health, finance, legal) where reliance on an AI output without a professional disclaimer can cause direct consumer harm that the FTC treats as an unfair practice.

Why this severity: Info because AI capability misrepresentation typically requires a consumer to purchase and rely on the product before discovering the gap between the claim and reality — harm is delayed and varies by use case — but 'AI washing' is an explicitly named FTC enforcement priority.

FTC Act §5 and the FTC's AI Impersonation Rule both address synthetic media used in marketing in ways that deceive consumers about authenticity. AI-generated face images on testimonial sections falsely imply real customers exist. AI-generated product screenshots showing capabilities the product does not have are fabricated product demonstrations. AI voice-overs or synthetic video presenters implied to be real employees misrepresent who is behind the product. Each of these constitutes a deceptive material claim about a different aspect of the product's legitimacy and capability.

Why this severity: Info because synthetic media deception requires consumers to rely on the implied authenticity before harm occurs — discovery that a testimonial face or demo was AI-generated typically happens during post-purchase research rather than at decision time.