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Author Topic: FTC warns companies about disclosures  (Read 2656 times)

Omegafant

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FTC warns companies about disclosures
« on: September 29, 2014, 08:14:27 AM »

[*quote*]
Consumer Health Digest #14-36
September 28, 2014

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making. If you enjoy this newsletter, please recommend it to your friends.

###
FTC warns companies about disclosures

The U.S. Federal Trade Commission has sent warning letters to more than 60 companies—including 20 of the 100 largest advertisers in the country—that failed to make adequate disclosures in their television and print ads. The initiative—Operation Full Disclosure—focused on disclosures that were in fine print or were otherwise easy to miss or hard to read, yet contained important information needed to avoid misleading consumers. The FTC's letters advised the advertisers to ensure that any necessary disclosures are truly "clear and conspicuous" and asked them to report what remedial steps actions they intended to take. The targeted companies were not identified but included a wide range of industries and products. Makers of weight loss claims were warned that ads featuring testimonials claiming outlier results did not adequately disclose the weight loss that consumers generally could expect to achieve. The FTC Web site contains additional details about disclosures.

###
State Farm withdraws ad involving vaccine opponent

State Farm has withdrawn an ad featuring actor Rob Schneider. The company's action came in response to a vigorous social media campaign that questioned how a company that sells health insurance could hire a celebrity spokesperson who is so openly against vaccinations. [State Farm drops ad starring Rob Schneider over anti-vaccine views.
PR Week, Sept 22, 2014]
For several years, Schneider has incorrectly claimed that vaccines cause autism.

###
GcMAF cancer claims questioned

Several skeptical articles have been published about GcMAF, a protein compound promoted as a cancer treatment based primarily on favorable reports by Dr. Nobuto Yamamoto:

In 2008 Cancer Research UK noted that none of Yamamoto's studies had compared treated patients with untreated controls.

Jeffrey Beall has pointed out that although Yamamoto's findings have been published in medical journals, there is good reason to suspect the quality and integrity of the journals.
[Beall J. Would you take a cancer cure proven effective in a predatory journal?
Scholarly Open Access Blog, July 24, 2014]

The Anticancer Fund (Belgium) Web site summarizes the current status of Yamamoto's work and warns that, "GcMAF has not been properly studied in clinical trials and its laboratory results still need to be confirmed independently. So far, all claims on the efficacy of this product have no solid scientific basis. Its marketing is illegal; therefore there is no controlled guarantee on the quality of the product for human consumption sold over the internet."

The Anticancer Fund has also noted that Yamamoto's primary publication

(a) contains many errors,
(b) includes many references that do not support its claims, and
(c) contains results that contradict established knowledge of cancer.

[Ugarte A and others. Inconsistencies and questionable reliability of the publication "Imunotherapy of metastatic colorectal cancer with vitamin D-binding protein-derived macrophages-activating, GcMAF" by Yamamoto et al. Cancer Immunology, Immunotherapy, published online, July 24, 2014]

###
Continuing request for help from Dr. Barrett


In June 2010, Doctor's Data, Inc. sued Dr. Barrett because it didn't like what he wrote about them on Quackwatch and in this newsletter. The events leading up to the suit are described at
http://www.quackwatch.org/14Legal/dd_suit.html
 In November, 2011, about half of the allegations were dismissed, but discovery was permitted for more than a year. The rest of the suit is ripe for dismissal (the court is now considering another motion to dismiss), but the proceedings have cost hundreds of thousands of dollars. Even small donations, if sent by enough subscribers to this newsletter, will be very helpful. Contributions to the defense fund can be made by mail or through
http://www.quackwatch.org/00AboutQuackwatch/donations.html
###

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=================================

Stephen Barrett, M.D.
Consumer Advocate
Chatham Crossing, Suite 107/208
11312 U.S. 15 501 North
Chapel Hill, NC 27517

Telephone: (919) 533-6009

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[*/quote*]
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Omegafant

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Re: FTC warns companies about disclosures
« Reply #1 on: September 29, 2014, 08:21:00 AM »

Since Barrett didn't give the sources, I had to check with the FTC.

http://www.business.ftc.gov/blog/2014/09/full-disclosure

[*quote*]
Full Disclosure
By Lesley Fair
September 23, 2014 - 11:32am

If the disclosure of information is necessary to prevent an ad from being deceptive, the disclosure has to be clear and conspicuous. That shouldn’t be news to any advertiser and certainly not to the 60+ companies – including 20 of the 100 biggest advertisers in the U.S. – that received warning letters as a part of the FTC’s Operation Full Disclosure. But whether your company heard from us or not, there are lessons to learn from our latest effort to ensure advertisers abide by time-honored legal principles.

Operation Full Disclosure included TV ads, print ads, ads in Spanish, and ads for a wide range of products and services – food, drugs, household items, consumer electronics, personal care products, weight loss products. It ran the gamut. And here’s what we found: A lot of ads included potentially misleading statements that advertisers tried to “fix” with problematic fine print.

Some ads quoted prices, but didn’t adequately disclose the strings that were attached. Others showed optional accessories, but didn’t adequately disclose that people had to buy extras to get the advertised benefit. Still others featured best-case-scenario consumer testimonials, but didn’t adequately disclose the results people could generally expect to achieve. We also spotted ads that included on-camera demonstrations without adequately disclosing material alterations. And that’s just for starters.

Of course, just because your company didn’t get a warning letter doesn’t mean everything is necessarily ship-shape. Savvy marketers will take Operation Full Disclosure as an opportunity for a refresher on the “clear and conspicuous” standard. There are lots of places to look for more guidance: the FTC’s Deception Policy Statement, any of the dozens of cases where the FTC has challenged disclosures as ineffective, the 2001 FTC-NAD national workshop Disclosure Exposure, and recently revised guidance about digital disclosures, to name just a few.

Here’s a practical way to think of it. If a disclosure is truly clear and conspicuous, consumers don’t have to hunt for it. It reaches out and grabs their attention. One mnemonic we use – The 4Ps – can help sharpen advertisers’ focus on four key considerations:

Prominence.  Is the disclosure big enough for consumers to read easily?  The fine-print “disclosure” and its TV cousin, the fleeting super, have long been the subjects of FTC law enforcement. Consumers shouldn’t have to scan an ad with a magnifying glass to pick up on material details of the deal. TV advertisers face the additional wild card of varying screen sizes.  Regardless of whether a person is looking at the ad on a home theater system or a handheld device, small type can be easy to overlook. Furthermore, consumers shouldn’t have to be speed readers to grasp the message. FTC cases have challenged supers that flashed for just a brief period, lines of fine print on a single screen, and hard-to-read sentences over multiple screens.  Consider contrast, too. White text on a light or variegated background isn’t likely to be noticed. Nor will a fine-print statement that has to compete with a dynamic and distracting image.

Presentation.  Is the disclosure worded in a way that consumers can easily understand?  Using legalese or technical terminology reduces the likelihood that consumers will get the message. Burying important information in a dense block of text is another common tactic that signals “don’t read me.”  In one FTC settlement, for example, material information about the terms of the transaction appeared after an advertiser’s long litany of trademark information. In another case, a company used an intricately embellished all-caps font. That may be fine for the logo of a heavy metal band, but it’s not a presentation designed to convey critical information to consumers.

Placement.  Geography matters.  Is the disclosure where consumers are likely to look?  An FTC settlement challenged as ineffective a key disclosure that ran down the side of a print ad perpendicular to the main text.  Another case dealt with information conveyed in small type in the upper left corner of a full-page newspaper ad.  And given all the talk about footnotes, the bottom of the page or screen isn’t a place most consumers will look.

Proximity.  Is the disclosure close to the claim it modifies?  Tiny type aside, another problem with footnotes is their distance from the prominent headline or splashy text designed to draw the consumer in. If you need to include key qualifications or conditions, remember this maxim: What the headline giveth, the footnote cannot taketh away.  And don’t think an asterisk will always solve the problem.  There’s a reason it’s called an aste-risk.



Now for the nitty-gritty.  So just how big does a disclosure have to be?  4 point, 8 point, 12 point?  What’s better: Times New Roman? Helvetica?  How many seconds does it have to be on the screen?  We get those questions all the time.  But there are three reasons why advertisers who focus on the details may be missing the big picture.

“Clear and conspicuous” is a performance standard, not a font size.  A disclosure is clear and conspicuous if consumers notice it, read it, and understand it. Do you really want the FTC staff dictating the specifics of your ad campaign? We didn’t think so. Aside from a few rules that mandate detailed disclosure standards, the “clear and conspicuous” ball is in the advertiser’s court. As long as consumers looking at the ad come away with an accurate understanding, companies have substantial leeway in how they communicate their marketing message. That’s why we think it would be a mistake to impose a one-size-fits-all approach.

Who knows better than advertisers how to convey information clearly and conspicuously? The “clear and conspicuous” standard allows advertisers to use their limitless creativity to integrate important information into the overall campaign. Even so, we often hear them say “But we don’t know how to make a disclosure clear and conspicuous.” Our response:  Really? Really? Advertisers’ stock in trade is the ability to use the tools at their fingertips – text, sound, visuals, contrast, or color, to name just a few – to convey information effectively.  One practical observation: Consider looking at it from another perspective. How would you send the message if you really wanted to, rather than because you think you have to?  Approaching the disclosure as a key piece of information you want to convey may make it easier to ensure it’s clear and conspicuous.


When in doubt, rethink your ad claim.  If you find yourself struggling with how to craft an effective disclosure, why not take a step back and consider what the need for a disclosure may be telling you. Perhaps it’s pointing to a potential for underlying deception in your ad claim. Sometimes all it takes is a slight wording change to make a disclosure unnecessary in the first place. And just think how refreshing consumers would find an ad free of fine print.

 
4 Comments >> Leave a Comment | Comment Policy
UsernameMalik Rashid September 25, 2014 - 12:30pm reply

Thank You for continued efforts

concerned September 23, 2014 - 11:21pm reply

I wish someone would check out CVS & Walgreen's. They constantly put their sale adds not quite close enough to what's really on sale. I know that I'm not the only one who has gotten to the register and then found out it's not the right item.

pasogal September 23, 2014 - 7:30pm reply

Thank you for your continued efforts.

Username September 23, 2014 - 12:15pm reply

VERY HAPPY TO KNOW I'M NOT THE ONLY ONE NOTICING THESE POOR PRACTICE TECHNIQUES! BRAVO FTC!
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Omegafant

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The web-site of the FTC is rather messy: nearly all urls are embedded. The Web-designer there is a stupid nut.

Go for yourself there if you want to get the full context of the press release.


http://www.ftc.gov/news-events/press-releases/2014/09/ftc-approves-final-order-settling-charges-loreal-usa-inc-made

[*quote*]
FTC Approves Final Order Settling Charges that L’Oréal USA, Inc. Made Deceptive Advertising Claims for its Anti-Aging Cosmetics

For Your Information
September 26, 2014
Tags: Bureau of Consumer Protection 
Consumer Protection 
Advertising and Marketing 
Health Claims 

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that cosmetics company L’Oréal USA, Inc. made deceptive advertising claims about its Lancôme Génifique and L’Oréal Paris Youth Code skincare products.

According to the FTC’s complaint, announced in June 2014, L’Oréal made false and unsubstantiated claims that its Génifique and Youth Code products provided anti-aging benefits by targeting users’ genes. In national advertising campaigns, L’Oréal claimed that its Génifique products were “clinically proven” to “boost genes’ activity and stimulate the production of youth proteins” that would cause “visibly younger skin in just 7 days.” Similarly, for its Youth Code products, L’Oréal touted the “new era of skincare: gene science,” and that consumers could “crack the code to younger acting skin.”

Under the final order, L’Oréal is prohibited from claiming that any Lancôme brand or L’Oréal Paris brand facial skincare product targets or boosts the activity of genes to make skin look or act younger, or respond five times faster to aggressors like stress, fatigue, and aging, unless the company has competent and reliable scientific evidence substantiating such claims. The final order also bars the company from claiming that certain Lancôme brand and L’Oréal Paris brand products affect genes, unless the claims are supported by competent and reliable scientific evidence. Finally, L’Oréal is prohibited from making claims about these products that misrepresent the results of any test or study.

The Commission vote approving the final order and responses to members of the public who submitted comments was 4-0-1, with Commissioner Terrell McSweeny not participating. (FTC File No. 132-3016; the staff contact is Elizabeth Nach, Bureau of Consumer Protection, 202-326-2611)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
 Contact Information

MEDIA CONTACT:
 Mitchell J. Katz
Office of Public Affairs
 202-326-2161
[*/quote*]
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