Problem
Jane Barksdale has designed a line of clothing targeted toward Hispanic Americans. The items are sold only by catalog and on the internet. She thinks that she can increase sales by claiming in ads that the firm is owned by a Hispanic American and all the employees are Hispanic Americans. She is not Hispanic American nor are most of the employees. She needs a high level of sales to pay her bank loan and remain in business.
a) Should Jane Claim that she is Hispanic American? Explain your response?
b) Does the Federal Trade Commission address this issue? Go to www.ftc.gov and search for guidelines for small business advertising or e-commerce.
c) What does Jane risk in making false claims in her ads?