Advertising Advertising ReviewReviewA primer from the A primer from the

Better Business Better Business Bureau.Bureau.

Why do ad review?Why do ad review? Foster business self-regulation Maintain public confidence in business,

thereby eliminating subsequent consumer and competitive complaints.

BE HONES

T

The Bureau does this The Bureau does this by: by:

Identifying cases of misleading, deceptive or Identifying cases of misleading, deceptive or untruthful advertisinguntruthful advertising

Initiating communications with the company Initiating communications with the company whose advertising is being reviewed in order whose advertising is being reviewed in order to seek voluntary substantiation or to seek voluntary substantiation or modification of the claims in questionmodification of the claims in question

Having a process for handling cases where the Having a process for handling cases where the Bureau and the company cannot agree; and Bureau and the company cannot agree; and

Having a process for informing business and Having a process for informing business and the public about the Bureau’s efforts in the the public about the Bureau’s efforts in the field of advertising review.field of advertising review.

Local Advertising Review Local Advertising Review ProcessProcess

ComplaintsLocal BBB

Local BBB

Local Advertising

ReviewCommittee

During the Ad Review process, the BBB will typically consult

the following: BBB Code of Advertising at www.bbb.org Do’s and Don’ts in Advertising Federal Trade Commission (www.ftc.gov

) State Laws (consumer protection, false

advertising laws, etc.) Local statutes (going out of business

sales, etc)

BBB Code of AdvertisingBBB Code of AdvertisingBasic Principles

•Primary responsibility for truthful and non-deceptive advertising rests with the advertisers. Advertisers should be able to substantiate any advertisement BEFORE publication.

•Advertisements which are untrue, misleading, deceptive, etc. should not be used.

How does the BBB How does the BBB determine if an ad is determine if an ad is

deceptive?deceptive? What would a “reasonable person” What would a “reasonable person”

think?think? What is being “expressed” or What is being “expressed” or

“implied”?“implied”? What does the ad NOT say?What does the ad NOT say? Does the ad influence purchasing Does the ad influence purchasing

decisions?decisions? Is there sufficient evidence?Is there sufficient evidence?

The BBB looks at the ad from the The BBB looks at the ad from the perspective of the “reasonable person”.perspective of the “reasonable person”.

The BBB looks at both “expressed” and The BBB looks at both “expressed” and “implied” claims.“implied” claims.

The BBB looks at what the ad does not say.The BBB looks at what the ad does not say. The BBB looks at whether the claim would The BBB looks at whether the claim would

be material to a consumer’s decision to be material to a consumer’s decision to purchase.purchase.

The BBB looks at whether there is The BBB looks at whether there is sufficient evidence to support the sufficient evidence to support the advertisers claims. advertisers claims.

Comparative Price, Value Comparative Price, Value and Savings Claimsand Savings Claims

Comparative Price, Value Comparative Price, Value and Savings Claimsand Savings Claims

Advertisers may offer a price reduction or saving by Advertisers may offer a price reduction or saving by comparing their selling price with:comparing their selling price with:

Their own former selling price,Their own former selling price, The current selling price of identical The current selling price of identical

merchandise sold by others in the market area, merchandise sold by others in the market area, oror

The current selling price of comparable The current selling price of comparable merchandise sold by others in the market area.merchandise sold by others in the market area.

Ads should make clear to which of the above the Ads should make clear to which of the above the comparative price or savings claim relates. Save 40 – comparative price or savings claim relates. Save 40 – 75% off regular price75% off regular price This means the company offered the product at This means the company offered the product at

the regular price prior to offering it on sale.the regular price prior to offering it on sale. Note that the company says the regular price and Note that the company says the regular price and

then the sale price.then the sale price.

List PricesList Prices• Usually used to imply a savings when such is not the case.• List prices should only be used as a comparative to the sale price only if it is the actual selling price of the advertiser or a competitor.

Going out of Business Going out of Business SalesSales

• Emergency or distress sales should not be advertised unless the stated or implied reason is a fact, should be limited to a stated period of time, and should only offer such merchandise as is affected by the emergency.• They can’t “stuff” the store with merchandise from other places.• If liquidating should show what they are liquidating so consumers don’t think they are going out of business.

Here is a meet or beat Here is a meet or beat policy that doesn’t need any policy that doesn’t need any

other explanation.other explanation.

FreeFreeUnconditional gift• If requires purchase must be disclosed with the free offer (not by using an asterisk)• Price of product or service must not be increased nor its quantity or quality reduced• Free offer must be temporary (otherwise it becomes a combination offer)

• The company can’t absorb the price of the furnace, it has to be built into the purchase of the air conditioner. Therefore it is not FREE!

CreditCredit Triggering Terms:Triggering Terms:

The amount of the down payment The amount of the down payment The amount of any payment The amount of any payment The number of payments or the period of The number of payments or the period of

repayment repayment Required Disclosures:Required Disclosures:

The amount or percentage of the down-payment The amount or percentage of the down-payment The terms of repayment The terms of repayment The "annual percentage rate," using that term The "annual percentage rate," using that term

or the abbreviation "APR." If the annual or the abbreviation "APR." If the annual percentage raw may be increased after percentage raw may be increased after consummation of the credit transaction, that consummation of the credit transaction, that fact also must be stated. fact also must be stated.

No Credit RejectedNo Credit Rejected• Words such as “no credit rejected” and the like should not be used unless true, since they imply that consumer credit will be extended to anyone regardless of the person’s credit worthiness or financial ability to pay.• All credit applications accepted means that they’ll say “thank you for the application” when they get the application, not that credit will be extended!!

This is big in the car industry

Extra ChargesExtra Charges

These should be disclosed in immediate These should be disclosed in immediate conjunction with the price. Examples include conjunction with the price. Examples include delivery, installation, assembly, postage and delivery, installation, assembly, postage and handling.handling.

Retailers like to bury this information in the disclaimer at the bottom of the ad

Bait and SwitchBait and Switch A “Bait” offer is an alluring but insincere A “Bait” offer is an alluring but insincere

offer to sell a product or service which offer to sell a product or service which the advertiser does not intend to sell.the advertiser does not intend to sell.

Examples:Examples: Offering a product for a very low price, but Offering a product for a very low price, but

having the sales person disparage the having the sales person disparage the product when you go into the store and product when you go into the store and suggest a higher price product.suggest a higher price product.

Offering a product and not having it available Offering a product and not having it available and switching the customer to another and switching the customer to another product on which the sales person makes product on which the sales person makes more commission.more commission.

Sufficient Quality of Sufficient Quality of Advertised MerchandiseAdvertised Merchandise

An advertiser should have on hand a sufficient An advertiser should have on hand a sufficient quantity of advertised merchandise to meet quantity of advertised merchandise to meet reasonably anticipated demands, unless the reasonably anticipated demands, unless the advertisement discloses the number of items advertisement discloses the number of items available or states “while supplies last.”available or states “while supplies last.”

Use of rain checks is no justification for Use of rain checks is no justification for inadequate estimates of reasonably inadequate estimates of reasonably anticipated demand.anticipated demand.

Retailers who have flyers Retailers who have flyers in newspapers usually in newspapers usually prepare then months ahead prepare then months ahead of time, so they should of time, so they should have time to prepare for have time to prepare for the sale!the sale!

WarrantiesWarranties

Disclosure should be made clearly and Disclosure should be made clearly and prominently that consumers can see prominently that consumers can see the warranty at the store (prior to the warranty at the store (prior to sale!), free upon written request, or on sale!), free upon written request, or on the company’s Web site.the company’s Web site.

Satisfaction guarantee – conditions Satisfaction guarantee – conditions should be listed in ad.should be listed in ad.

Consumer Products Warranty Act (FTC)Consumer Products Warranty Act (FTC) Lifetime – life of the person buying it or Lifetime – life of the person buying it or

the product?the product?

Lifetime WarrantyLifetime Warranty

Is the warranty for the lifetime of the truck, for your lifetime or for the time that you own

the truck?

AsterisksAsterisks

Asterisks should explain the initial concept more clearly, not take away what has been

given.

An asterisk may be used to give An asterisk may be used to give more information, but should not be more information, but should not be used as a means of changing the used as a means of changing the meaning of any statement.meaning of any statement.

Example:Example: Top of an ad “Free Car*.” Bottom Top of an ad “Free Car*.” Bottom

of the ad “*buy one and get the of the ad “*buy one and get the second of equal or greater value at second of equal or greater value at the same price.”the same price.”

AbbreviationsAbbreviations Only abbreviations commonly Only abbreviations commonly

known should be used. If you known should be used. If you have to ask it is probably not have to ask it is probably not

common.common.

Superiority/Superiority/DisparagementDisparagement

• Comparisons should be truthful using factual information

• Consistent with general rules and prohibitions against false and deceptive advertising•Clearly disclose any material or significant limitations

• All claims must be substantiated

Testimonials/Testimonials/EndorsementsEndorsements

Testimonials could mislead if:Testimonials could mislead if: it is not genuine and does not actually represent the current opinion it is not genuine and does not actually represent the current opinion

of the endorser; of the endorser; it is not quoted in its entirety, thereby altering its overall meaning it is not quoted in its entirety, thereby altering its overall meaning

and impact; and impact; it contains representations or statements which would be misleading it contains representations or statements which would be misleading

if otherwise used in advertising; if otherwise used in advertising; while literally true, it creates deceptive implications; while literally true, it creates deceptive implications; the endorser is not competent or sufficiently qualified to express an the endorser is not competent or sufficiently qualified to express an

opinion concerning the quality of the product or service being opinion concerning the quality of the product or service being advertised or the results likely to be achieved by its use; advertised or the results likely to be achieved by its use;

it is not clearly stated that the endorser, associated with some well-it is not clearly stated that the endorser, associated with some well-known and highly-regarded institution, is speaking only in a personal known and highly-regarded institution, is speaking only in a personal capacity, and not on behalf of such an institution, if such be the fact; capacity, and not on behalf of such an institution, if such be the fact;

broad claims are made as to endorsements or approval by broad claims are made as to endorsements or approval by indefinitely large or vague groups, e.g., "the homeowners of indefinitely large or vague groups, e.g., "the homeowners of America," "the doctors of America"; America," "the doctors of America";

an endorser has a pecuniary interest in the company whose product an endorser has a pecuniary interest in the company whose product or service is endorsed and this is not made known in the or service is endorsed and this is not made known in the advertisement. advertisement.

What do we collect to What do we collect to review?review?

Newspapers from our service areaNewspapers from our service area

Direct mail Direct mail

Radio Radio

TelevisionTelevision

Customer complaints Customer complaints

If you see an ad you If you see an ad you think is misleading, let think is misleading, let

us know!us know!Tri-State Better Business BureauTri-State Better Business Bureau

www.tri-state.bbb.orgwww.tri-state.bbb.org

www.BBBConsumerEducation.comwww.BBBConsumerEducation.com

info@evansville.bbb.orginfo@evansville.bbb.org

(812) 473-0202(812) 473-0202