Sales Ethics and Compliance Flashcards

Under the FTC's guidelines, what must a salesperson disclose when making claims about a product's performance?

Answer: Claims must be truthful, non-deceptive, and supported by evidence

The FTC requires that all advertising and sales claims be truthful, clearly stated, and substantiated by evidence.

What does 'data privacy compliance' require of a sales professional handling customer data in the U.S.?

Answer: Handling personal data in accordance with applicable privacy laws and company data policies

Sales professionals must comply with data privacy regulations and company policies when collecting, storing, and using customer information.

A sales professional discovers that a colleague is falsifying expense reports. The ethical action is to:

Answer: Report it through the appropriate internal channel (e.g., manager, compliance hotline)

Reporting misconduct through proper channels upholds organizational integrity and protects the reporting professional legally.

What is 'bait-and-switch' selling, and why is it unethical?

Answer: Advertising a product at an attractive price with the intent to switch customers to a higher-priced item once engaged

Bait-and-switch deceives customers by luring them with an offer that is never genuinely available, violating FTC regulations and ethical standards.

In sales, what does 'informed consent' mean when presenting a contract?

Answer: The customer fully understands the terms, conditions, and obligations before agreeing

Informed consent requires that customers understand what they are agreeing to, protecting them from hidden terms and the company from disputes.

Why should a sales professional avoid making disparaging remarks about competitors to customers?

Answer: Competitors can sue for defamation if claims are false, and it undermines the rep's professionalism

False or misleading statements about competitors can constitute defamation or trade libel, and negative selling generally damages the rep's credibility.