SPC Sales Ethics and Compliance 2 — Questions and Answers
Question 1: Under the FTC's guidelines, what must a salesperson disclose when making claims about a product's performance?
- Only claims that are negative
- Claims must be truthful, non-deceptive, and supported by evidence (Correct answer)
- Claims are unrestricted if customers sign a waiver
- Only written claims require truthfulness
Correct 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.
Question 2: What does 'data privacy compliance' require of a sales professional handling customer data in the U.S.?
- Sharing customer data freely within the sales team with no restrictions
- Handling personal data in accordance with applicable privacy laws and company data policies (Correct answer)
- Storing all customer data on personal devices for convenience
- Only protecting data once a contract is signed
Correct 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.
Question 3: A sales professional discovers that a colleague is falsifying expense reports. The ethical action is to:
- Ignore it to maintain team harmony
- Report it through the appropriate internal channel (e.g., manager, compliance hotline) (Correct answer)
- Confront the colleague publicly
- Replicate the behavior to stay competitive
Correct 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.
Question 4: What is 'bait-and-switch' selling, and why is it unethical?
- Offering one product and delivering a better one at no extra cost
- Advertising a product at an attractive price with the intent to switch customers to a higher-priced item once engaged (Correct answer)
- Switching sales reps mid-deal at the customer's request
- Offering promotional pricing only on select items
Correct 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.
Question 5: In sales, what does 'informed consent' mean when presenting a contract?
- The customer signs without reading, trusting the rep
- The customer fully understands the terms, conditions, and obligations before agreeing (Correct answer)
- Consent given only verbally during a sales call
- Approval from the sales manager before presenting an offer
Correct 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.
Question 6: Why should a sales professional avoid making disparaging remarks about competitors to customers?
- Competitors can sue for defamation if claims are false, and it undermines the rep's professionalism (Correct answer)
- Competitors will retaliate by lowering their prices
- It is only problematic if the competitor finds out
- It increases the length of the sales cycle
Correct 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.
SPC Sales Ethics and Compliance 2
Under the FTC's guidelines, what must a salesperson disclose when making claims about a product's performance?