Live (almost) from New York, It’s the NAD Annual Conference

We are close to live blogging from the annual NAD Advertising Law Conference and for those who could not join us, we wanted to share highlights from its opening — keynote speaker FTC Chairwoman Edith Ramirez.  The FTC typically uses this conference to lay out its enforcement priorities relevant to national advertisers and gives us all a peek into the crystal ball for the coming year.  So here’s what we heard. Continue Reading

Is the Disclosure Going the Way of the Dodo?

Edwards' DodoThe fine print disclosure is as iconic as the Yankees, Mom and Apple Pie.  But pity the poor disclosure as it’s had a rough time of late.  First, the FTC came out with its revised disclosures (read about those here)  In general they advocated clearer and more prominent disclaimers and also asked advertisers to think hard about whether the information should be in the body of the claim itself rather than in a disclosure.

Now the FTC has turned its attention to disclosures on television and print advertising.  “Operation Full Disclosure” resulted in warning letters being sent to 20 of the largest 100 advertisers in the country (and 60 companies overall) alerting them to the fact that the FTC believes they failed to make adequate disclosures in their TV and print ads.  The letters also asked them to notify the FTC about their response to the letter.  (The FTC has indicated that the response has been “extremely positive.”)  Continue Reading

TSR Under Review: What Telemarketers Should Know about FTC’s Request for Public Comments

Not to be outdone by last year’s changes to Federal Communication Commission rules under the Telephone Consumer Protection Act (“TCPA”), the Federal Trade Commission (“FTC”) has teed up a number of issues that may be the focal point of big changes to the Telemarketing Sales Rule (“TSR”).  Similar to the TCPA rules, the TSR includes the FTC’s version of Do-Not-Call rules and restrictions on the use of prerecorded message calls.  Unlike the TCPA rules, the TSR imposes certain disclosure and other requirements for outbound calls, some inbound calls, and upsells on both outbound and inbound calls.  When the FTC announced on July 31, 2014, that the TSR has come due for review, it asked for public comment on issues that suggest the FTC is considering restrictions on telephone “data pass” and broader application of negative option and other disclosure requirements to inbound calls currently exempt from the scope of the TSR.  While the ongoing stream of lawsuits filed under the TCPA continues, it is worth taking a closer look at the FTC’s Rule Review, Request for Public Comments (“Request”) to determine what additional restrictions/requirements could be on the horizon for telemarketers.  Continue Reading

It’s Our Party and You Can Come If You Want Too (Again)

The annual NAD, and CARU conference on advertising issues begins next Monday September 29 in New York City. (For a link to the conference click here). We’ll be there and we suspect many of you will be too. We had so much fun at our party last year that we’re doing it again.  So, if you’re attending the conference or if you’re already in the NYC area or you just want an excuse to go to NYC you are welcome to attend a party we and some of our Venable colleagues are throwing Tuesday night at El Vez from 6:00 – 8:00 pm near the conference. You can see the invite and RSVP here. Hope to see you at the party!

Is Chiquita in a Bunch of Trouble Over Green Claims?

Advertisers seek out third-party certifications and endorsements for their environmental efforts as a means of providing credibility to green claims made to consumers.  Indeed, the FTC’s Green Guides make clear that companies who choose instead to “self-certify” must make that fact clear to consumers precisely because consumers may view self-certification with more skepticism.

But can an environmental seal also operate as a shield against legal liability?  Chiquita may be about to find out.  The Seattle-based Water and Sanitation Health (WASH) Group has taken issue with green bananas (no one likes the green ones, do they?) and filed a lawsuit against Chiquita alleging that the Company’s claim that its bananas are grown in an ecologically friendly and sustainable manner is deceptive.  Continue Reading

0% Interest!* Is Your Advertising Sending the Wrong Message? (*kind of)

Deferred and waived interest programs, convenience checks, promotional rates, and grace periods are popular credit card features with consumer, creditors, and retailers – as well as the Consumer Financial Protection Bureau (CFPB). Last year the CFPB signaled to the industry that it had concerns about use of these loan features and doubts regarding consumer understanding of the proper use of credit containing these features. Earlier this week the CFPB issued Bulletin 2014-02, which provides more detailed guidance on the marketing of grace periods and promotional rates for credit cards.

It is important to keep in mind that although the Bulletin was directed to credit card issuers and credit card programs, it should serve as a lesson for any creditor that offers credit with similar features. Any creditor that offers deferred or waived interest programs should incorporate this guidance into their policies and procedures.  Continue Reading

Facebook Changes the Rules Again: The Sally Field Principle of “Likes” on Social Media

We’re all pretty used to seeing sweepstakes that require entrants to “like” an advertiser’s or app’s Facebook® page in order to enter—they’re probably the most common type of promotion on Facebook.  Many marketers require consumers to “like” an application’s Page as a condition of entry into a sweepstakes or contest, in order to receive coupons or other rewards, or in order to watch a video or some other type of content.  Advertisers like to do this because in exchange for offering consumers benefits for “liking” their applications’ Pages, the advertisers obtain a guaranteed base of Facebook fans and extend their brand’s reach on Facebook.

But, in a few months, as a result of recent changes to Facebook’s Platform Policy, these examples of “like-gating” will no longer be kosher on the Facebook platform.  Facebook’s revised Platform Policy, updated August 7, 2014, states that developers of Facebook applications may “[o]nly incentivize a person to log into your app, like your app’s Page, enter a promotion on your app’s Page, or check-in at a place.”  The revised policy goes on to state that “Effective November 5th, 2014, you may no longer incentivize people to like your app’s Page.”

Facebook provides these examples of what is no longer allowed:


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Striking Stats About Internet Marketing and Online Lead Generation

Online advertisers and marketers, including lead generators, and their service providers, have long had to contend with scrutiny from the FTC, state Attorneys General, competitors, and customers.  And, since 2012, advertisers of consumer financial products and services have had to contend with the CFPB.  Regardless of what you are promoting, bedrock advertising law says an advertiser can’t over promise, be misleading, or deceptive.  Moreover, depending on how you advertise, you may have to comply with numerous medium specific requirements, such as the Telemarketing Sales Rule.  Finally, some advertisers have to meet product specific regulations (e.g., consumer financial services laws).  And, the list goes on.  There are many ways for advertising to cause legal risk.  But, what are some of the root causes?  Survey says:

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FTC’s Letters to Retailers Regarding Concussion-Related Products Has Us Scratching Our Heads

It is almost football season and the FTC tries to stay seasonal; around this time in 2012, it announced a settlement with football mouthguard manufacturer Brain-Pad regarding unsubstantiated concussion prevention claims.  Subsequently, the FTC has sent warning letters to other manufacturers of sporting equipment regarding concussion prevention claims.  This year, however, the FTC has called a different play.  On August 21, the FTC announced that it had sent warning letters to five major retailers regarding the FTC’s concerns regarding concussion protection claims for athletic mouthguards made on the retailers’ websites.  These retailers appear to have been repeating claims that the manufacturers of the products made on their packaging.  Continue Reading

Even Being in Jail or Consulting With a Lawyer May Not Help Avoid Personal Liability for FTC Claims

A recent ruling by the Ninth Circuit affirmed a district court’s order permanently enjoining an individual defendant (Kyle Kimoto) in an FTC action from engaging in a variety of marketing tactics and requiring the individual to pay restitution.  In doing so, the Ninth Circuit rejected the defendant’s argument that his being incarcerated for mail and wire fraud  related to prior FTC violations precluded the requisite level of involvement necessary to impose liability.  The court also rejected his effort to invoke an “advice of counsel” defense.

Kimoto has been the subject of three different FTC enforcement efforts all involving negative option or free to pay conversion marketing.  While facing criminal charges for his involvement in a prior “scheme,” Kimoto relocated to Las Vegas, opened a new corporate entity (Vertek) in his wife’s name, and hired many of the individuals who had worked with him in his previous ventures.  Kimoto then directed and participated in the development of marketing campaigns involving a $7,500 line of credit product, a government grant product, and a work from home product.  Each of these campaigns were found to be deceptive.

Kimoto’s criminal trial related to prior FTC issues began in March 2008 and he was convicted on counts of conspiracy, wire fraud and mail fraud.  During his trial and subsequent incarceration, Kimoto ceased participating in Vertek’s daily activities.

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