5 Written questions
5 Matching questions
- James Miller
- What advertiser was fined over a million dollars
- FTC's 6 factors of an unclear claim
- What is Section 13B
- Consumer Credit Protection Act
- a Geritol decided it was better business to pay $5000/day (the fine at the time) than to stop running ads, but continued to run the ads after the cease and desist because running the ad was more profitable
- b Section 13B was added in the mid 1970's to the FTC. It allows the FTC to step in and stop ads immediately, "stop until this case is decided." This was done b/c advertisers were being charged w/ deceptive advertising and running their ad and keep appealing in order to keep from having to stop running their ads, it would take years to make their ads stop. Section 13B is more powerful than an FTC remedy.
- c Can regulate what claims are made about credit in advertising
- d 1. Type of claim
2. Type of product advertised
3. Consequences of the false claim
4. Benefits of a truthful claim
5. Cost of developing substantiation - FTC will also consider how much time/money goes into substantiating the claim
6. What experts in the field think is reasonable
- e Ran the FTC during the Reagan administration. He was from the Chicago economic thought. He wanted Congress to add his definition, Congress refused but he made it into an FTC policy. Deception policy was changed from "capacity OR tendency to mislead" to "capacity AND tendency to mislead". Raised the standard to prove deception. Less regulation and less consumer protection.
5 Multiple choice questions
- Names can have a primary and secondary meaning. If the consumers know the primary meaning and not the secondary meaning that the ad is implying then it is considered deceptive. EXCEPTION: something has existed so long that it precedes the FTC. It is grandfathered in (ex. 2x4). Cases Aspercreme case and cashmora sweather case
- 1. Disparagement (tort) - protects a company, product or brand from being badmouthed/lied about
2. Defamation - same thing, but about people - MUST be a lie (libel=written/slander=spoken)
- A law that in large part does what the FTC does, but on the state level. 1960s: Nader & American Bar Association (ABA) claimed that FTC did a lousy job of protecting consumers. FTC claimed they did not have enough power so "little FTC act" was created at the state level.
- The advertiser agrees to do whatever the FTC says to do. This is the way a case stops before a remedy is ordered. Advertisers do this because a. it is less damaging b. the legal process is expensive c. It is more negotiable at this point d. a cease and desist last forever e. the FTC rarely losses f. If an ad is published for so little time, you probably got your money's worth out of the ad, so what's the point in fighting the FTC
- 1. Intrusiveness (spam,popups,accessing personal info)
2. Access to personal info (cookies, spyware, employee tracking, encryption technology)
3. Deception - Can't see your face on the Internet
4. Intellectual property - Easy to violate copyright laws
5. Phising - misuse of private info
6. Employee info
5 True/False questions
Additional concerns (from public as response to FCC speech) for child advertising → Additional concerns (from public as response to FCC speech):
1. Causes disillusionment: When a product doesn't live up to a child's fantasy. (Ex: Sea monkeys on the back of the comic book.)
2. Causes cynicism: Distrust created by advertising.
3. Causes parent-child conflicts (Ex: Some children would throw fits when they didn't get what they wanted. Disciplinary problems would result from these ads.)
The Bottom Line: Advertisers are bigger, and older, and smarter, and have a responsibility to uphold. It is unethical to use superior power to manipulate young minds. Advertisers are in the position to manipulate kids.
Trade Regulation Rules (TRRs) → These are LAWS published by the FTC. Regulations on: Premiums and Prizes, Children's online privacy, Televisions and Amplifiers: to make sure TV manufacturers measure the same way), Telemarketing & Mail Order, Making false guarantees, Endorsements, The leather content of belts, etc
National Advertising Division (NAD)/National Advertising Review Board (NARB) → This group is in charge of advertising self-regulation in the US. It is a division of CBBB. If NAD gets a lot of complaints about an advertiser they look into it. The NAD is selective about protecting competitors. Is solely about protecting public interest. The National Advertising Review Board (NARB) is were advertisers can go to appeal a decision. A panel made up of 3 advertisers, 1 ad agency and 1 public rep. hear the case then the NARB hands down the decision to the advertiser. The NARB can enforce via press release / hand case over to the FTC
Old Definition of Materiality → "The natural and probable result is to cause one to do that which he would not otherwise do." Ie. If you knew the crystals were blue and not green would you still buy the product - yes!
Consumer Redress → Some judges weren't happy with how Section 13B only issued a temporary injunction. So judges decided that they were going to order advertisers to pay money back to the consumers. This was a real threat to consumers and opened up new opportunities for the FTC. It was also only supposed to be for the worst cases but the FTC finds many cases to be the worst.