WebAdvertising is not equally productive for firms in every market type. NAD recommended that Gillette stop using "MoistureRich" in both the product name and as a descriptor when used in isolation in phrases such as "Treat Your Skin to MoistureRich." A. previous advertising has led to the formation of false beliefs about a product. C. Campbell Soup. Magazines E. Competitor Trademark Act, The _____ closed a loophole in the Lanham Act and facilitated the ease with which one company can sue a competitor for making false advertising claims about the first company's products. National Advertising Review Board C. Fairness Doctrine Department of Justice (DOJ) Three major divisions of the Federal Trade Commission are the Bureaus of: \end{array}\right]=\left[\begin{array}{rr} All the commission must prove is that the advertiser had actual knowledge of the trade regulation rule, or "knowledge fairly implied from the objective circumstances.") C. U. S. Postal Service -protection of proceeds against the insured's and the beneficiary's creditors -short-term disability After a disability policy has been in force for _____ years, it is considered incontestable. They are: The advertiser may appeal this decision in a federal court. -insurance company, an insured's status under social security can be described as.. A. D. a commercial is approved at the storyboard stage but then is rejected after it is produced. E. Substantiation, Under the _____ Doctrine, the Federal Communications Commission (FCC) required stations to run commercials about the harmful effects of smoking. Nevada allowing prostitution in some counties, Airline tickets having to prominently show total price, and Baltimore ordinance banning alcohol ads near children's facilities are all about ________________________. *1. III. They speed up and simplify the process of enforcement. A. U.S. A. Trade regulation rules have had a great deterrent effect, as they comprehensively delimit what constitutes an illegal practice. Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that more or less regulate the kind of advertising they will carry. If the endorser is an "expert," the endorser's qualifications must reflect his/her expertise in what he/she is endorsing. D. cease-and-desist Falsely implying that a test is scientifically conducted. -Consent agreement Texaco claimed its ClearSystem gasoline cleaned car engines, boosted mileage, and reduced pollution emissions better than any other gas. B. FTC Improvements Act Several airlines challenged the rule on First Amendment grounds in Spirit Airlines v. U.S. De'p of Transporatition. the role of the federal government was expanded when Medicaid was established by allowing the state to Chevron contended its products were just as good as Texaco's. Don't press 1 to speak to a live operator and don't press any other number to get your number off the list. & 1125, provides that a person who generates "any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, whichin commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or another person's goods, services, or commercial activities" is liable for civil damages. B. 0 & 5 The FTC believes that the claim is deceptive. Congress shall make no laws "abridging the freedom of speech, or of the press", Criteria for Judging whether Prior Restraint is Justified. E. Advertisers who do not comply with the NAD/NARB review process will find themselves encumbered with a class action lawsuit. Trade regulation rules, guides & Child's Online Privacy Protection Act, FTC issues industry guides for a variety of products, services, and marketing practices. A. false According to deontological thinker Kant: I. D. Most advertising cases investigated by the NAD are resolved without being sent to the NARB. In either case, the losing side can appeal to the federal trade commissioners for a final ruling. Consent Agreement: Nearly a century later, the FTC today is the only federal agency with jurisdiction to protect consumers and maintain competition in broad sectors of the economy. E. distribution, distillation, and diversity. D. National Association of Broadcasters A chairperson, one of the 5 commissioners, is appointed by the president. Misinterpretation The Federal Trade Commission takes the position that: *Child Advertising Review Unit (CARU)*. -An advertiser may use an endorsement of an expert or celebrity only as long as it it has good reason to believe that the endorser continues to subscribe to the views presented. -is not available to the public E. Food and Drug Administration, In 1996, President Clinton signed an executive order declaring that nicotine was an addictive drug and gave the _____ broad jurisdiction to regulate the advertising of cigarettes and smokeless tobacco. This is a written agreement between the commission and the advertiser in which the advertiser agrees to refrain from making specific reduct claims in future advertising. The Better Business Bureau guidelines What's more, the FTC made sure in 2012 that more than 477,000 consumers received monetary redress totaling $26.8 million. -form a large PPO on a statewide level Affirmative disclosures The division of Consumer Protection Use the following information. Policies and procedures for self-regulation of advertising industry are established by the ____. Typically the advertising campaign is already over. Guides or advisory opinions that attempt to outline in advance what advertisers may say about a product The representation, omission, or practice must be "material" such that it is likely to influence the purchasing decision. *There is an "established business relationship" (EBR) exception to the do-not-call provisions* that allows a company to call a consumer with whom it has such a relationship, even if the customer's number is on the registry. In 1995, the Federal Trade Commission issued a complaint against the manufacturers of New Balance and Saucony athletic shoes based on their "Made in the USA" advertising claims. Even truthful advertising for legal goods and services can be regulated, provided that the government can satisfy the 3 requirements outlined here: In 1995 the Supreme Court struck down a federal rule that forbade brewers from listing the alcohol content on labels attached to bottles and cans of beer and malt liquor. B. The federal Lanham Act was adopted more than 60 years ago by Congress to stop unfair competition in the marketplace. -No ad containing an offer to sell a product should be published if the offer is not a bona fide effort to see that product. The challenge wad filed with NAD by a competitor of Gillette, namely Schick, which makes "Intuition Plus" razors. B. Lanham Staff attorneys at the FTC will issue a complaint against the advertiser, and a hearing will be held before an administrative law judge. Subjective statements of opinion about a product's quality Misinterpretation Which of the following statements is true about National Advertising Review Council (NARC)? The good news for consumers is that they sometimes get part of their money back. an accident and health insurer just received written proof of loss from one of its insureds. * Refusing to sign the agreement will result in litigation and publicity. Champion Sportswear has developed a "Super Bowl Sweepstakes" that it plans to promote. Review the following transactions for Birdy Birdhouses and record any required journal entries. The problem for Roommates.com was that it solicited specific content from users and forced them to use pull-down menus with questions featuring specific answer options in which they could express illegal and discriminatory views. Weba. D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. There must be a representation, omission or practice that is likely to mislead or to confuse the consumer. The students had a right, in other words, to not speak. A material misrepresentation or practice is one that is likely to affect a consumer's choice of a product. C. refer the matter to an appropriate government agency. Food and Drug Administration. B. a superlative; illegal WebSection 18 of the FTC Act, 15 U.S.C. A promotion such as a contest or sweepstakes can avoid being considered a lottery or form of gambling by: A. Puffery is illegal. permitted consumers to sue manufacturers with whom they had no contractual relationships. -to tell them what they can and can't do B. consumers need to know information about consequences, conditions, and limitations associated with the use of the product. A. The companies that received the warning letters had 15 working days to inform the FDA of the steps that they were or would be taking to correct their labels. Although CAN-SPAM does not provide a civil remedy for those of us who receive spam, a provider of Internet access service that is adversely affected by spamming activities on its service may bring a civil lawsuit against the spammer in any federal court in the U.S. seeking both a permanent injunction to stop the spamming and monetary damages for harm caused by the spam. A. Corrective advertising Advertising *substantiation* has been an important part of the FTC regulatory scheme since 1972. WebUnder the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. Department of Foreign Affairs If an advertiser refuses to sign a consent order, the inquiry is handed to the U.S. Department of Justice. B. C. Most FTC inquiries are settled by consent order. Federal Trade Commission SUMMARY: National Advertising Review Board E. The division of Economic Practices, The _____ gave the Federal Trade Commission the power to establish trade regulation rules. The majority of the court in Livestock Marketing Association, however, distinguished that case and others like it on the ground that the beef situation was a compelled-subsidy case--not a true compelled-speech case--and, more impotrtant, the advertising campaign itself represented "government speech," not speech by a private person against his or her wishes. Marketing Agreements are only binding for those handlers that sign the agreement. If either of the latter two events occur, a complaint is issued against the advertiser, and a hearing is scheduled before an administrative law judge. -statements that dividends are not guaranteed D. Presence of puffery in the advertisement State regulation of advertising predates federal regulation buy several years. an agent is required to keep replacement forms on file for at LEAST __ years.. a producer who sells an individual life insurance policy in new jersey MUST deliver to the policy owner a(n), contain content approved by the commissioner, the names of the insurance companies represented by the producer -if you send spam (unsolicited messages) there must be an opt-out option E. avoid questionable advocacy advertising. Corrective Advertising: * Other times the ads themselves might be regarded as tasteless, like an advertisement for clothing in which then models are scantily dressed or posed erotically. Consumer Redress, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. The FTC issues industry guides for a variety of products, services and marketing practices. By 2010, the FTC had brought more than 60 telemarketing cases alleging do-not-call violations. D. economics, consumer protection, and competition, Which division of the Federal Trade Commission would deal with antitrust and consumer protection investigations? Ads can't be unfair, meaning the advertisement can't cause substantial injury to consumers that consumers In other words, the government could focus its attention with the registry only on the problems caused by commercial sales calls without having to also sweep up and control problems caused by political and charitable calls. D. advertising substantiation In doing this, the advertiser makes no admission and the agency no determination that the claim is deceptive. If an advertiser disagrees with a NAD or CARU decision, it can appeal to the _______________________________. -receive matching funds to expand public assistance programs Food and Drug Administration 57a, empowers the Commission to promulgate trade regulation rules with the force and effect of law that "define with specificity" acts or practices that the Commission finds, based on substantial evidence in the rulemaking record, are prevalent and are unfair or deceptive. 3. 8. A. cease-and-desist C. Freedom to stop the airing of any advertisement 1. What is the role of the leader and follower in the leadership process? Federal Trade Commission. *False/Misleading Messages* E. requiring the consumer to pay a consideration. -establish continuing education requirements The media must accept all advertising they receive because of First Amendment that guarantees the freedom of speech. Consent Decrees E. Federal Communications Commission. A. a commercial is rejected at the storyboard stage. D. Robinson Patman Act E. U.S. Department of Welfare. Under the commercial speech C. Consumer Protection The origin of the Federal Trade Commission's corrective advertising program came from a deceptive advertising case involving: -But judges have said past facts can be misleading, It's not nearly as easy to prove "substantial state interest" in commercial speech than porn and obscenity. Native Advertising/sponsored posts - have come on the rise; it's important to be aware of Injunctions The FTC enforces rules regarding endorsements of products and services by consumers, celebrities, experts and organizations. The FTC's guides don't have the force of law; in other words, a business that violates a provision of a guide is not automatically guilty of false advertising. A. require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. -The act also make sit illegal for a business to be a monopoly if that company is cheating or not competing fairly. When a complaint is received, FTC staff attorneys examine it to see if it has merit. -is only available to insurance companies The 5 members of the commission are appointed by the president and confirmed by the Senate for a term of 7 years. Litigated orders These are the probabilities that he drives each of the other cars the next day: Pr(\operatorname{Pr}(Pr( Ford after Audi )=0.7Pr(VW)=0.7 \quad \operatorname{Pr}(\mathrm{VW})=0.7Pr(VW after Audi )=0.3)=0.3)=0.3 In dealing with false advertising, the FTC's greatest enemy is the time needed to bring an action against an advertiser. \end{array}\right]+\left[\begin{array}{ll} Ocean Spray Cranberry Juice. 5. The representation, omission or practice must be material. D. Lanham Act. C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. In other words, the do-not-call registry bears a reasonable fit with the purposes the government sought to advance. This provision of the Lanham Act was seldom used by advertisers until the 1970s. The advertiser can agree to sign the agreement, but the commissioners reject it. * B. E. fraud, Which of the following is one of the two of the factors the FTC considers in evaluating an ad for deception? B. If the advertiser loses this final appeal before the commissioners, he or she can appeal the litigated order in federal court. E. National Association of Broadcasters. Postal Service regulations. A. Wheeler-Lea Amendment Will you buy the book? The FTC claimed the ads were misleading since imported soles and upper parts were used to make the shoes. If an advertiser refuses to comply with rulings made by the National Advertising Review Board (NARB), the NARB is most likely to: B. The signing of a consent order is an admission of guilt by the advertiser. Telephone Consumer Protection Act of 1991. In 1938 Congress adopted the Wheeler-Lea Amendment to the Trade Commission Act, which gave the FTC the power to proceed against all unfair and deceptive acts or practices in commerce, regardless of whether they affect competition. WebAd Regulations >> Advertising is controlled by internal self-regulation and by external state and federal regulatory agencies such as the Federal Trade Commission (FTC), the Federal Advertising by attorneys is legal in the entire United States. -policy owners from misrepresentations and loss of benefits B. E. Trade Regulation Bureau, Which of the following divisions of the Federal Trade Commission protects consumers from deceptive and unsubstantiated advertising and enforces the provisions of the FTC Act that forbid misrepresentation, unfairness, and deception in general advertising at the national and regional level? * A. employment, national security, and trade. -insurers "The commission generally will not bring advertising cases based on subjective claims (taste, feel, appearance, smell)," according to the guidelines. Voluntary compliance This the First mendment plainly permits." ", courts have developed this to articulate just how much first amendment protection advertising receives and the criteria the government must satisfy to permissibly regulate it, false or misleading advertising, as well as advertising about unlawful foods or services, receives, truthful and non-misleading advertising about lawful goods and services receives an __________ _______ of first amendment protection. Trade Regulations Rules: If Parramore could lower its inventories and receivables by 10 percent each and increase its payables by 10 percent, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits? C. ad substantiation will result in advertisers resorting to puffery to avoid the need for claim verification. An appeal of an adverse ruling by a circuit court can be taken to the Supreme Court, but only if certiorari is granted. *10-Day Prohibition Period* Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. -Attempts by competitors to undermine or dilute these images or claims were regarded more seriously than in the past. E. Substantiation, The _____ is the government agency that has authority over the labeling, packaging, branding, ingredient listing and advertising of packaged foods and drug products. WebMost direct influence has been on regulation of advertising for alcoholic beverages. D. Internet These claims can be viewed as deceptive under the FTC's requirement of: Federal Trade Commission these rights are called The act's title represents a tortured acronym for a bill officially called the "Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003." Under the commercial speech doctrine and the Central Hudson test, the government may prohibit advertising (1) that promotes an unlawful activity or (2) that is misleading or untruthful. Bureau of Economics B. FTC Improvements Act C. Federal Trade Commission. WebAn orgnaization established and funded by businesses that operate primarily at the local level to monitor activities of companies andp promote fair advertising and selling Corrective advertising ______________________________________: All commercial e-mail messages must contain either a functioning return address or an Internet-based reply "opt-out" mechanism for at least 30 days after transmission of a message. E. Federal Trade Commission (FTC). Presence of superlative words in the advertisement Many areas of consumer and trade promotions are regulated by the _____ through the Marketing Practices Division of the Bureau of Consumer Protection. -No, it is not political speech. -completely insured, joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Significant omission of important information. D. Bureau of Alcohol, Tobacco, and Firearms Children's Advertising Review Unit (CARU) Central Hudson -insured What is Parramore's cash conversion cycle (CCC)? B. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Independent Business Alliance It applies to "commercial electronic mail messages" that have as their "primary purpose" the "commercial advertisement or promotion of a commercial product or service." D. any advertising on a broadcast media. Postal Service Sometimes an advertiser doesn't want to sign a consent agreement. 3. C. is important to consumer and would likely have an effect on the purchase decision. -all serve 7 terms Nor were there limits on the words a brewer could use to describe these products. -offer the insured a 60 day free look period, submit to the replacing insurer a list of the policies to be replaced. An exaggeration extended to the point of outright spoof that is obviously not true. was not protected by the first amendment until 1975, The Supreme Court held that commercial advertising receives a degree of First Amendment protection; Supreme Court, ""The relationship of speech to the marketplace of products or of services does not make it valueless to the marketplace of ideas. Food and Drug Administration D. corrective advertising. A. FTC Act -Also court said this case was "in the public interest". The most commonly used FTC remedy is the consent agreement, or _____________________________. The regulation of deceptive or untruthful advertising is a difficult task maintained by the advertising industry, the mass media and governmental agencies. Under this policy, express substantiation claims, such as "doctors recommend" and "specific tests prove," require the level of proof advertised. -arbitrate claims Television advertising: C. a cease-and-desist order. The act or practice must be considered from the perspective of a consumer who is acting reasonably. This requirement falls under the FTC's _____ requirement. -incontestable period D. Trademark Revision Act of 1988 Law of Agency DRAFT. C. Cease-and-Desist This remedy is infrequently used. A study by the National Advertising Division's Children's Advertising Review Unit found that the most prevalent violation of its voluntary advertising guidelines occurred with _____ aimed at children. A. D. puffery is illegal. A. D. Puffery -issue subpoenas -policy owner C. affirmative disclosure B. Acme's competitors may sue the company under the Lanham Act if it cannot substantiate its claims. "likely to mislead the consumer" Cease-and-Desist Orders A. the fairness doctrine. False or misleading advertising, as well as advertising about unlawful goods and services receives _______ First Amendment protection. an employee under a group insurance policy has the right to name a beneficiary and the right to convert to an individual policy in the event of employment termination, HIPAA considers which of the following as 30. insured suffered an injury as an innocent bystander during a bank robbery. Although ad agencies and publishers/broadcasters are generally not held liable in cases of false or harmful advertising, there are signs that the law is changing. E. Independent Business Alliance, D. Electronic Retailing Self-Regulation Program. C. an illegal deception. Also, the time factor works in the advertiser's favor. -Voluntary compliance A very frustrating, and often expensive, scenario for both an agency and its client occurs when: hire and fire management and select and appoint a chief executive. right to transfer ownership and dividend entitlement. 1. A. deceptive advertising. Federal Communications Commission. -annuity's guaranteed interest rate *Consumers, as opposed to competitors, have a much more difficult time in maintaining an action for false advertising. -partially insured The advertiser is simply asked to prove the claims are truthful.The substantiation process today involves panels of experts who scrutinize advertisements and target for documentation those claims that seem most suspect. Under the Wheeler-Lea Amendment, the Federal Trade Commission is empowered to stop an advertiser from making a specified claim within 30 days and refrain from doing so until a hearing is held. which of the following statements is true? Implied uniqueness Federal Trade Commission Act Which of the following statements about a consent order is true? Although that slogan at first may seem to benegit the entire beef and cattle industry, a number of cattle producers objected to it because, as the Supreme Court put it, "the advertising promotes beef as a generic commondity, which, they ccontended, impedes their efforts to promote the superiority of, inter alia, American Beef, grain-fed beef, or certified Angus or Herefore beef." C. First-Amendment Analysis Which of the following programs is more likely to be the most controversial of all the Federal Trade Commission's programs? B. E. noncompetitive advertising. Alcohol Advertising Laws The First Amendment allows for a lot of freedom of speech in general and therefore limits how much the federal government can regulate advertising, even in regard to alcohol. -waiver of premium Independent Business Alliance E. Clayton Antitrust. Web(1) An advertisement shall not utilize or describe nonguaranteed elements in a manner that is misleading or has the capacity or tendency to mislead. * A. FTC Act D. Trademark Improvements Act C. affirmative disclosure. B. Acme's competitors may sue the company under the Lanham Act if it cannot substantiate its claims. Cases brought to NARC are subject to more publicity as compared to the cases brought to a court. The appellate court reasoned that Craigslist "is not the author of the ads and could not be treated as th 'speaker' of the posters' words." -split A. defined commercial speech. A. uses puffery. E. an illegal comparative advertisement. E. Violation of trade regulation rules, B. An advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. False. Its cost of goods sold is 75 percent of sales, and it finances working capital with bank loans at an 8 percent rate. C. ad substantiation agreement In 2012, a federal appellate court uhoeld a Department of Transporation rule affecting the price of tickets advertised by airlines. -Litigated orders what is an insurance policy's grace period? *, *National Advertising Division (NAD)* The court thus ruled in favor of the federal beef promotion program and its compelled subsidization of advertising to which some cattle ranchers aand farmers object. A. The guides are of great benefit, however, to honest advertisers who seek to stay within the boundaries of what is allowable under the law. The _____ was formed by three advertising associations and the Council of Better Business Bureaus to sustain high standards of truth, accuracy, morality and social responsibility in national advertising. protects insured from insurance company insolvency. which of these is NOT considered a form of life insurance advertisement? Under the ________ Act, a plaintiff can prove an ad is literally false if the test used to prove a claim for a product either is: 1) not sufficiently reliable to permit a conclusion; or 2) simply irrelevant. -Substantiation Webadvertising regulations exist in order to? D. multiple interpretations. It held that an online roommate-matching service was not immune to liability under Section 230 of the CDA for posting information by others that violated the Fair Housing Act and California housing discrimination laws. In the past, the agency had to pursue deceptive advertisements one at a time. -is made available after paying a $50 fee. continued coverage under COBRA would be provided to all of the following EXCEPT The government justified the rule by arguing that it sought to discourage young drinkers from buying a particular beer or malt liquor because it had the highest alcohol content. A. Freedom of using any media vehicle Network standards regarding acceptable advertising have remained constant over the past 30 to 40 years. Specifically, the rule requires that the most prominent ticket price displayed on print ads and on Web sites be the total price, including taxes. Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims: d. requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical. Offering for sale of lease . Finally, in 2012, the FTC offered this sage but simple piece of advice to anyone receiving a robocall: "Hang uo the phone. C. Robinson Patman Act These acts are often called "Little FTC Acts," and the guidelines developed by the FTC in applying federal advertising law are used by the state courts in administering these state regulations. Substantiation Ad substantiation Finally, via TRRs the FTC is able to deal with problems more evenhandedly. Central Bank advertises free checking with a minimum balance of $1,000. But if the commissioners support an administrative law judge's ruling against an advertiser, the order becomes law after it is finalized by an appellate court. -1200 employees B. -insured employee Section 43(a) creates a legal cause of action for false advertising. E. Federal Communications Commission, D. National Association of Attorneys General.

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