For 50 years, the National Advertising Division (NAD) has been at the forefront of monitoring national advertising, enforcing high standards of truth and accuracy, and resolving advertising disputes (typically between competitors) to build consumer trust and support fair and truthful marketing. In this episode, Jason Howell and Amanda Beane talk with Vice President of the National Advertising Division of BBB National Programs Laura Brett about using the NAD process to resolve advertising disputes between competitors as an alternative to litigation. Jason, Amanda, and Laura also discuss hot topics and trends in advertising challenges.
- On October 4, 2021, California passed an amended automatic renewal law that will require businesses to follow stricter cancellation and notice requirements for subscription-based products and services.
- The updated law goes into effect on July 1, 2022.
- FTC sends Notice of Penalty Offenses to advertisers warning that unfair and deceptive acts and practices related to endorsements could trigger penalties of up to $43,792 per violation.
- Advertisers should review and refresh their policies, trainings, and compliance programs for endorsements, influencers, and consumer reviews to ensure compliance with the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides) and related FTC guidance and notices.
- The FTC is prioritizing investigations into and actions against false and misleading advertisements in healthcare markets.
- Companies with healthcare products, especially those advertising medical treatments, should take care to ensure they do not overstate the efficacy of those treatments and back up advertising with necessary scientific evidence.
Key Takeaway: Companies and social media influencers should conduct reasonable due diligence and consider the potential for trademark infringement lawsuits before they post promotional content. Both parties should also consider what contractual protections and provisions make sense for each influencer relationship. Continue Reading Social Media Influencer Faces Trademark Infringement Suit
- The Children’s Advertising Review Unit has released new guidelines for children’s advertising, moving beyond traditional TV advertising, to address a broader range of digital advertising issues.
- The updated Guidelines go into effect on January 1, 2022 and apply to advertising that is primarily directed to children under age 13 in any medium or content.
- Brands should honor advertised product benefits and avoid techniques to block product use.
- Under the Restore Online Shoppers’ Confidence Act (and state auto-renewal laws), advertisers must disclose material terms and conditions and obtain consumers’ express consent before charging a payment card or account.
The FTC and MoviePass recently settled related to allegations that the company used deceptive tactics to prevent subscribers from using its service and insecurely held subscribers’ private information. The FTC’s complaint alleged that MoviePass used three tactics, described below, in a perceived attempt to save money on their $9.95 per month subscription service that was advertised as providing unlimited access to certain films in theaters.
Limiting Subscribers’ Usage: The FTC alleged that MoviePass, its parent company Helios and Matheson Analytics, Inc. (Helios), and its principals Mitchell Lowe and Theodore Farnsworth, scrambled at the high demand for the subscription service and took steps to prevent users from receiving the advertised “one movie per day” that they had paid for in order to cut costs. The FTC listed the following deceptive or unfair tactics that MoviePass operators allegedly engaged in to set up roadblocks for consumers: Continue Reading MoviePass Settles with the FTC Regarding Limitations on Subscribers’ Usage
Earlier this month the Federal Trade Commission formally codified its long-standing Made in USA guidelines into a formal rule that will go into effect August 13, 2021. The law is consistent with prior guidelines Continue Reading FTC Gives Teeth to Made in USA Enforcement
- The Federal Trade Commission (FTC) is actively using the COVID-19 Consumer Protection Act to protect consumers, with a new case alleging the defendant failed to timely deliver masks and failed to process refunds or cancellation requests. The complaint also alleges the defendant promised N95 masks but delivered cloth masks instead.
- The FTC’s Mail Order Rule requires a seller to notify customers when a delay is discovered, make adjustments to website content to give appropriate notice, and offer the right to cancel with an adequate refund.
- The FTC’s Jewelry Guides require marketers to make clear and conspicuous disclosures to truthfully represent the origin of lab-grown diamonds and gemstones (i.e., distinguishing mined diamonds and gemstones from man-made substitutes) and otherwise comply with the Jewelry Guides (see below for additional compliance considerations).
- Advertising claims for lab-grown diamonds and gemstones are subject to scrutiny by regulators, competitors (including adverse trade associations), and consumers, so companies should consult with legal counsel when developing any such claims.