Stores don’t have to honor ad errors

via Stores don’t have to honor ad errors,

I’ve heard from a few consumers in the past few weeks who mentioned they saw an unbelievably good advertised price for an item in an ad circular or newspaper, but when they went to the store or restaurant to take advantage of it, they were told it was an error and the merchant wouldn’t sell it at that price.

Let’s say you see an ad in the newspaper for a microwave oven for $25 at your local discount store. “At that price, I’ll get two,” you exclaim gleefully, and take the ad with you to the store. You’re a little skeptical, but it was in print, so you decide to take a chance. But when you get there and find the oven on the shelf, the price is $250.

By now, you’re getting upset, so you find the manager and present him with the printed ad. He consults with a couple of employees, who run over to the shelf. They return shortly, and the three have a little conference out of earshot. The manager comes back to you and tells you he won’t sell you the microwave for $25 because the price in the ad was missing a zero. He is willing to knock a few dollars off the price for your trouble, but won’t budge otherwise. A few minutes later, a sign appears on the store’s door acknowledging the error and offering an apology.

This scenario happens quite frequently, especially in businesses that advertise a lot. It’s easy to miss a few errors as ads are composed, and although most publications take great care to review everything, mistakes slip through. But although many people believe the store must honor any price in an ad, store sign or even a shelf tag, it’s a myth. A store is under no legal obligation to honor a mistaken price, so long as there is not a pattern of such behavior and there is no intent to deceive.

One example that got a lot of publicity was in 2013, when Macy’s put out a national ad for a necklace that ordinarily cost $1,500, but had discounted it to $47. The only problem: The actual discounted price was $479; whoever composed the advertisement had mistakenly left off the “9.” Macy’s quickly acted to put up signs in its stores, but it was too late; the necklace had already sold out in the company’s Dallas location. Since Macy’s was unable (or unwilling, given the potential social media backlash) to try to recover the thousands lost due to the mistake, they canceled unfilled online orders instead. A few people managed to make significant profit from the situation.

This is, of course, much different from “bait-and-switch,” in which a business advertises an item at an unusually low price but has no intention of honoring the price and is instead trying to get customers to come in so they can be “upsold” to higher-priced merchandise. Repeated complaints of this type of behavior can catch the attention of law enforcement and make a business end up in court.

In cases of errors, though, most sources I consulted would agree the seller is expected to correct the mistake quickly and preferably in the same medium that carried the mistake in the first place. If a merchant makes an honest mistake, it’s under no obligation to honor the mistaken price. Mississippi’s consumer protection law doesn’t prescribe specifically what to do in the case of such mistakes, although it does mandate that a merchant can’t advertise goods or services “with intent not to sell them as advertised.” It also prohibits advertising with “intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity.”

To avoid such problems, merchants should have clear, written policies spelling out what they will do in case of errors. Examine the copy carefully before publication and be sure to include limitations or expiration dates that may apply.

And if you’re the customer, try to reason with the business calmly. Many stores and restaurants empower their clerks and customer-service representatives to grant discounts (up to a point) to make the customer happier. You might not get exactly what you want, but most businesses will try to accommodate you as much as possible within reason. If you have evidence of “bait-and-switch” or other illegal practices, file a complaint with law enforcement.

In an age in which a simple typo can make your company a social-media pariah in minutes, owning up to the error and being generous can help keep a business’ reputation and customer goodwill (which are, in fact, any business’ most valuable assets anyway.)


Burger King ad explores new, controversial frontier

Source: Look out! Burger King is watching!,

PDF: Burger King explores new ad frontiers

Advertising has been around in some form practically since the dawn of civilization. As long as there have been people with something to sell, they’ve tried to figure out ways to get people to buy it. With each wave of technological innovation, advertisers have sought to use them to create demand for products.

But never before in human history has it been possible to reach so many people so easily. Technology has given advertisers an unprecedented level of reach into our daily lives in ways never thought possible. But at what point does advertising cross the line from being ultra-smart to just being plain creepy?

Imagine this scenario, which has already happened: You’re relaxing comfortably on your couch, watching your favorite TV show after a long day at work. Nearby, your new Google Home device sits patiently on a table. As the show cuts to commercial, you hear a Burger King commercial. But this ad’s different.

“You’re watching a 15-second Burger King ad, which is unfortunately not enough time to explain all the fresh ingredients in the Whopper sandwich,” notes the Burger King employee as he urges the camera closer. “But I got an idea. OK Google, what is the Whopper burger?” Immediately, your Google Home device awakens, and starts reading the “Whopper” Wikipedia entry (which has reportedly been edited to be more descriptive).

Burger King is being praised and panned at the same time for exploiting the very features that make search-assistant devices such as Google Home, Amazon Echo and a host of smartphone apps so convenient: they respond to certain voice commands. For several months, people have been reporting that these devices have been inadvertently triggered by ads and TV shows, prompting “idea” light bulbs to pop up in the minds of ad agency copywriters. Why not use that expensive TV ad time to cross the proverbial “fourth wall” which separates the actor from the audience? Perhaps it was just a matter of time.

Madison Avenue and the online world in general seem to be having trouble coming up with a consensus on the ad. The Verge (a tech news website owned by Vox Media) called the ad “… horrible, genius, infuriating, hilarious, and maybe very poorly thought-out”.

The Verge also pointed out the project’s Achilles’ heel: Relying on Wikipedia is fraught with danger. As every eighth-grader knows, Wikipedia is subject to editing by pretty much anybody and is generally forbidden for use as a primary source for school research reports. Since it’s crowdsourced, people with nefarious intentions towards the establishment (or Burger King in particular) could edit the entry so it says anything they want it to say (including the gross and ridiculous). In fact, that has already occurred numerous times since the ad first started running on April 12 — before Wikipedia locked the site for further editing. Since then, Google and Burger King have been engaged in a sort of geeky arms race, with Google initially blocking the device from reading the ad, and Burger King trying to get around it.

We’ve also seen a lot of news in recent months regarding Google Home and other devices; one Amazon Echo device was listed in a search warrant during an Arkansas murder investigation. Potentially, privacy advocates worry, these and similar devices could record a lot of things.

Regardless of whether this ad is successful, it’s generated a lot of coverage for Burger King, Google Home, Wikipedia and others involved, along with a lot of questions to be answered. Just how far can (or should) advertisers be allowed to invade our homes? What is the responsibility of tech companies to ensure customers’ privacy and rights?

Perhaps we’ve crossed an invisible barrier, inconceivable just a generation ago; the future of advertiser-customer interaction may have changed in ways we can’t imagine.

What does ‘Made in the USA’ mean, anyway?

Made in USA Stamp

Source: What does ‘Made in the USA’ mean, anyway?,

As you read this, look around at the products near you. Chances are, many of them were made outside the United States. On my desk is a videotape, made in Japan. A coffee cup says “China” on the bottom, and a three-ring binder comes from Mexico. The global economy is a reality, and it’s sometimes difficult to truthfully claim your product originates in the U.S.

Consumer Reports noted in 2013 that nearly eight in 10 Americans would choose an American-made product over the same product that had been made abroad, so it’s no wonder why companies would want to make this claim. Increasing numbers of companies are jumping on this bandwagon, and although most such claims are honest, some are not.

The “Made in USA” issue has even become part of national politics. On Tuesday, President Trump visited the Kenosha, Wisconsin, headquarters of Snap-On Tools to sign an executive order on a new policy called “Buy American, Hire American.” The order includes instructions requiring federal agencies to review purchasing procedures to ensure American companies are prioritized when purchasing goods and services.

To claim something is “Made in the USA” has for years been a serious matter and can get companies in hot water with federal officials and watchdog agencies if not used correctly. The Federal Trade Commission is responsible for enforcing “Made in USA” policies and just this week announced the closure of two recent cases in which companies had made “Made in USA” claims. In the first, Georgia-based iSpring Water Systems settled charges it had deceived customers by claiming U.S. origins for its products, when in fact (the agency alleged), the company’s water filtration systems were imported and composed mostly of foreign-made components.

In the second case, Texas-based Block Division Inc., which sold pulley block systems, was accused of claiming their products had been made in the USA, and even had metal plates stamped “Made in USA” imported from overseas. The company’s products, the FTC alleged, included “significant imported parts that are essential to their function.”

According to an Associated Press-GfK poll. the vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled “Made in the USA.” Wochit

It’s sometimes difficult to say where all the parts to something were made. Even some products that look deceptively simple are not. For example, a simple, painted wooden toy might seem easy to examine; the wood components can probably be easily traced, but what about the paint? The fasteners? And for electronic products, the issues multiply exponentially. For example, a typical computer might have parts from dozens of countries.

 Because the “origin” question can lead to one rabbit hole after another (making it exceedingly difficult to say exactly where a product was made), the standard for evaluating “Made in the USA” claims requires that “all or virtually all the product” has been made in the U.S. All “significant” parts, processing and labor that go into the product must be of U.S. origin. That guideline would apply to any product being sold with a “Made in USA” label or claim (other than automobiles, textiles and wool products, which have their own specific standards.)
So, if you’re looking to buy American, here are a few things you might want to consider (from various sources, including
  • Read the labels carefully. Keep in mind that “Made in America” does not necessarily mean “Made in the USA.” Some products may contain this wording, while the products actually could come from Canada or Mexico.
  • Know the difference between “made” vs. “assembled.” Some products may say honestly that they were assembled in the U.S. instead of being manufactured here.
  • Be careful of flags. Patriotic Americans might buy a product that had an American flag on the label, and marketers know that. It could be a ruse to get you to think the product was made domestically. Look for a “Made in USA” label in addition to the flag.
  • Shop wisely. There are many websites that list companies making products in the United States. That’s fine, but such lists may be inaccurate, out of date or deceptive. Dealing with local merchants you trust is often a good hedge against deception.

To find out more about “Made in the USA” guidelines, visit

Feds bite down on ‘Shark Tank’ winner


Source: Feds bite down on ‘Shark Tank’ winner,

PDF: breathometer

Getting behind the wheel after you’ve been drinking is never a good idea. But many people would pay good money to know if they’re legally impaired before they drive or do other tasks. And, it turns out, many have. After debuting on the hit show “Shark Tank” in 2013 (the first time all five “sharks” invested in a new product), the Breathometer hit the market and brought in millions in sales.

The Breathometer is a little pocket-sized device that uses your cellphone’s headphone jack, and it is used with a companion app. After drinking, the user breathes into the device, which then gives you a reading of your blood-alcohol content on the phone’s screen and informing you of whether your blood-alcohol level is within legal limits. The company marketed two devices, the Original (sold for $49), and the Breeze ($99).

While the “Shark Tank” investors were impressed and immediately saw the potential in the device, the reviews about its effectiveness were mixed. CNET reviewer Wayne Cunningham remarked, after testing the device, that the Breathometer “makes for a fun party game and a potential way to meet people in bars, but its testing results should not be taken as proof of driver safety.”

The product also caught the attention of the Federal Trade Commission, which announced last week that the company had settled charges that its claims about the Breathometer’s accuracy weren’t backed up by scientific evidence and could endanger both drivers and the public by giving false reassurance to drivers.

 Breathometer was sold with the assurance that it had undergone “government-lab grade testing” and that it was a “law-enforcement grade product,” both claims the FTC says were unsubstantiated. In some cases, the device “regularly understated BAC levels,” and the company continued to market the devices even after it learned of the issues in late 2014.

“People relied on the defendant’s products to decide whether it was safe to get behind the wheel,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Overstating the accuracy of the devices was deceptive — and dangerous.”

The settlement requires the company and its founder and CEO, Charles Michael Yim, to cease from “making future accuracy claims for a consumer breathalyzer product unless such claims are supported by rigorous testing” against National Highway Traffic Safety Administration protocols. The company must also provide refunds to consumers who bought devices.

In a statement on its website, Breathometer noted it had settled the case and was moving on. Its next product, Mint, analyzes your breath for compounds that could indicate poor oral health. “We feel it is important to clarify that this settlement does not undermine our achievements in creating quality consumer health devices,” the statement read. “We proactively stopped manufacturing Original and Breeze in 2015 prior to the FTC’s inquiry. We stand behind our current product, Mint, and its quality and pioneering technology.”

We’ve seen a lot of cases come up in which companies claim their products are effective at doing some task or other, and back up those statements by saying their products have been tested (or even endorsed) by official agencies and reputable testing labs. Unfortunately, that’s not often the case, and sometimes the results can be dangerous. A wide range of products can cause potential harm or even death if a user trusts marketing claims, often in lieu of getting real medical or safety advice from experts.

“Representations about safety are of great significance to consumers,” the FTC said in its Deception Policy Statement, which gives guidelines about how companies should verify their advertising claims. “It’s usually hyperbole to suggest that companies substantiate their claims as if lives depend on it, but it’s an accurate statement for a product that promises to accurately test the BAC of a person who is deciding whether to drive after drinking,” added the FTC’s blogger Lesley Fair.

Since 950 Mississippians died in alcohol-related crashes in 2015 (according the Mississippi Department of Transportation), it’s a serious safety issue. Ultimately, deciding to drive after drinking is taking an incredible risk, one that might have catastrophic effects on your future and those of others. So, while such devices may be fun at parties, it’s far too big a decision to entrust to a smartphone.

Feds: Blood pressure app unreliable


via Blood pressure app unreliable,

PDF: the_clarion-ledger_state_20161219_a003_1the_clarion-ledger_state_20161219_a005_3

Remember the old “medical tricorders” which became a fixture in the various “Star Trek” shows? Dr. McCoy and his fellow starship physicians were constantly waving these small devices over their patients, doing everything from scanning blood for toxins to mending broken bones. While some of us may have believed these devices actually existed, they were no more than Hollywood props, the technology behind them still in the realm of science fiction.

Many futurists believe the notion of the medical tricorder is not only possible, but in some ways, exists now. Already, wearable devices can track your heart rate, respiration and estimate your calorie count. And in the next few years, medical science promises even more wonders. A lot of those developments will be coming through today’s smartphones and their descendants.

But one thing that’s apparently not within the ability of a mobile device — at least yet — is accurately recording your blood pressure without using traditional methods. Such claims have landed at least one company in hot water with federal regulators.

The Federal Trade Commission has reached a settlement with a company called Aura Labs Inc., doing business as AuraLife and AuraWare, after charging it with deceiving customers into thinking their “Instant Blood Pressure” or “IBP” app could provide blood pressure readings that were as accurate as a traditional blood pressure cuff. In a $595,000 settlement with the FTC, Aura Labs settled allegations the company’s owner provided positive customer reviews for the product without disclosing his conflict of interest.

 “For someone with high blood pressure who relies on accurate readings, this deception can actually be hazardous,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “While the commission encourages the development of new technologies, health-related claims should not go beyond the scientific evidence available to support them.”

According to the FTC’s complaint, Aura sold the IBP app through Google Play and Apple’s App Store for between $3.99 and $4.99, garnering more than $600,000 in 2014 and 2015. Marketing messages included claims the app “could be used to replace around-the-arm cuffs and would be just as accurate as the traditional device,” the FTC charged. Users were instructed to place their index finger on the phone’s camera lens and hold the base of the phone over their heart.

But — at least according to the FTC — that wasn’t enough to get a good measurement. The agency reported that the readings from this activity were “significantly less accurate” than readings obtained the traditional way. “Although defendants represent that the Instant Blood Pressure App measures blood pressure as accurately as a traditional blood pressure cuff and serves as a replacement for a traditional cuff,” the FTC charged, “in fact, studies demonstrate clinically and statistically significant deviations between the app’s measurements and those from a traditional blood pressure cuff.”

Of course, a visit to the Apple or Android app stores will reveal thousands of apps that make similar promises. Shutting down one is not likely to stop the sale of apps with questionable medical value. Many medical experts have become increasingly concerned about the proliferation of these apps, which — even though they may include disclaimers that the app is “for entertainment purposes only” — could give people false information about their health with possible disastrous consequences. If you’re considering buying one of these apps, most experts advise you to be careful, and not rely on them for something as important as your health.

But there is good news on the horizon; if the meteoric rise of technology over the past few decades is any indication, science fiction will eventually become science fact. In the not-too-distant future, a descendant of the smartphone you live with every day will really help you live longer, healthier lives, eclipsing the wildest dreams of “Star Trek.” Dr. McCoy will be jealous.

Pain relief promise unproven

From Pain relief promise unproven: column,

Millions of Americans deal with joint pain, much of it caused by arthritis and related conditions. The Arthritis Foundation estimates that more than 50 million Americans suffer from some form of doctor-diagnosed arthritis, and that number will soar to 67 million by 2030.

Joint pain is so common and so debilitating that many people will do just about anything to ease it. And while there are many ways to get some relief (even if it’s only temporary), the population of joint-pain sufferers has created a market for various types of products that promise relief.

Many products feature glucosamine and chondroitin, both of which are produced naturally in the body’s connective tissue. As to the effectiveness of these products, most reputable medical sources say more study is needed. But that hasn’t stopped promoters from coming up with hundreds of products that contain these products as dietary supplements. But, as one company found out recently, companies wishing to cash in on this lucrative market should be careful before making claims about what they can do for joint-pain sufferers.

Last week, the sellers of Supple, a glucosamine and chondroitin liquid supplement, agreed to a $150 million settlement with the Federal Trade Commission after the agency charged they falsely advertised that their product provided “complete relief from chronic and severe joint pain caused by arthritis and fibromyalgia” and was “scientifically proven to eliminate joint pain.”

Supple, the FTC alleged, didn’t have the medical evidence to back those claims.

“Companies need solid scientific evidence to back up the health claims they make,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Consumers should not have to take it on faith that products claiming to provide pain relief will live up to their billing.”

In federal court, the FTC alleged that Supple LLC,CEO Peter Apatow, and his ex-wife, Dr. Monita Poudyal, took in more than $150 million from sales. Marketing Supple through informercials, social media and by other methods, the company charged about $70 for a 24-day supply of the product while a 144-day supply sold for $270. In some infomercials, Poudyal acted as a medical-show host and Apatow (creator of the product) acted as the guest.

“Poudyal and Apatow described Supple,” the FTC noted in its news release, “as a powerful all-natural drink that provides complete and long-lasting relief from joint pain; treats or relieves chronic or severe pain, including pain caused by all forms of arthritis and fibromyalgia; provides pain relief comparable to drugs or surgery; repairs cartilage; rebuilds joints and entire joint structures; and restores mobility and joint function to consumers with severe mobility restrictions.”

For example, the website quoted Apatow as saying, “If you just drink a can of Supple every day … it’ll help you get rid of all your pain, all your immobility, all of your suffering. You could stop taking dangerous pain drugs, you could avoid surgery.”

The FTC charges that these claims are false or not adequately substantiated. In addition, the commission alleges the defendants falsely claimed Supple is clinically proven to eliminate joint pain.

Other allegations included “expert endorsement” claims for the product made by Poudyal, while falsely representing herself as an independent, impartial medical expert and failing to disclose that she was married to Apatow during the marketing campaign. Endorsements, while effective in overcoming objections about buying a product, can be misleading if the objectivity of endorsers is compromised through conflicts of interest.

While Apatow, Poudyal and the company apparently will not have to come up with the $150 million (after telling the court they didn’t have the money), they will have to stop making any unsubstantiated claims in the future.

For more on this case, visit

Some free trial offers cost big bucks


via Some free trial offers cost big bucks,

PDF: trial-offers

The “trial” membership is a tried-and-true strategy for companies and has worked for decades to lure consumers.

It works like this: The customer is not really interested in paying a lot of money for a subscription or product but might be interested if they got free use for a set period (usually 30 days). These offers seem “risk-free.” After all, you don’t have to pay anything and can just send the product back if you don’t like it or aren’t satisfied. This strategy is used to overcome initial objections and is used to sell everything from online subscriptions to mattresses.

But the “free trial” only works if the company abides by its promise to not charge anything for the specified time, and the customer carries out his or her obligations. If, at the end of the deal, an unscrupulous company charges you anyway (regardless of your intentions), everyone’s confidence in the system is reduced.

Last week, the Federal Trade Commission announced the final settlement of a 2010 case in which a company called iWorks and its owner, Jeremy Johnson, were accused of operating a huge scheme in which consumers signed up for “trial” access to a variety of online services, grant programs and money-making schemes, only to have their accounts charged anyway. The alleged haul: more than $280 million.

According to the FTC, consumers who bought iWorks’ sophisticated pitch were asked to provide their credit card or bank account numbers to cover “shipping and handling” fees of $1.99. But iWorks then turned around and charged them one-time fees of $129.95, plus recurring monthly fees of $59.95. “To keep the scam going,” the FTCalleged in its 2010 news release, “the defendants tricked banks into giving them continued access to these billing systems by creating 51 shell companies with figurehead officers, and by providing the banks with phony ‘clean’ versions of their websites.”

What’s more, the FTC alleged the scheme used fake positive online reviews, used deceptive testimonials and violated federal law by debiting customers’ checking accounts without their authorization.

With last week’s announcement, the FTC noted that the $280 million judgment is being suspended until iWorks’ assets — frozen by the court — are turned over to the FTC for evaluation. Two defendants had their own judgments suspended because they told the court they were broke.

But Johnson’s troubles are far from over, as he will have to spend some prison time. Johnson and a colleague, Ryan Riddle, have been convicted in a Utah court of making false statements to a bank on multiple IWorks merchant account applications. Johnson was sentenced to 11 years and three months in prison, and Riddle to five years and three months. Both men will be subject to three years of supervised probation upon release.

What, if any, restitution will be made to the victims of the scheme hasn’t been announced.

If you’re considering a “free trial” arrangement for a product or service, the FTC has this advice:

Research the company online. See what other people are saying about the company’s free trials — and its service. Complaints from other customers can tip you off to “catches” that might come with the trial.

Find the terms and conditions for the offer. If you can’t find them or can’t understand exactly what you’re agreeing to, don’t sign up.

Look for who’s behind the offer. Just because you’re buying something online from one company doesn’t mean the offer or pop-up isn’t from someone else.

Watch out for pre-checked boxes. If you sign up for a free trial online, look for already-checked boxes. That checkmark may give the company the green light to continue the offer past the free trial or sign you up for more products — only this time you have to pay.

Mark your calendar. Your free trial probably has a time limit. Once it passes without you telling the company to cancel your “order,” you may be on the hook for more products.

Look for info on how you can cancel future shipments or services. If you don’t want them, do you have to pay? Do you have a limited time to respond?

Read your credit and debit card statements. That way you’ll know right away if you’re being charged for something you didn’t order.

Comcast’s speed claims challenged


via Comcast’s speed claims challenged,

PDF: Comcast Speed Challenged

For years, companies who provide internet service have bragged that their service is the fastest, most reliable or economical than the rest. Consumers are often poorly equipped to assess whether these claims are true as there are a multitude of factors that affect how fast your computer can upload or download content from the internet superhighway.

But internet giant Comcast last week has been asked to discontinue or modify several speed-related claims by the National Advertising Division, an independent agency run by the Council of Better Business Bureaus. The division handles advertising disputes between advertisers. At issue are claims that Comcast’s INFINITY services “delivers the fastest internet in America,” and the “fastest, most reliable in-home WiFi,” the organization said in a news release on Tuesday.

The agency recommended Comcast discontinue those claims after it was challenged by rival Verizon. For its part, Comcast said it “disagrees” with the finding and will appeal National Advertising Division’s decision to the National Advertising Review Board, the division’s appellate organization.

Verizon challenged several Comcast claims, including those that it could deliver “America’s fastest internet according to 60 million consumer tests run at,” the “fastest, most reliable in-home WiFi” and others. In addition, Verizon took issue with Comcast claims that Verizon was reducing its services, including discontinuing copper-wire home phone service.

In its findings, the National Advertising Division noted the methodology Comcast used to underlie some of its claims was questionable, as it relied on crowd-sourced data.

“At issue in this case is whether there is a good fit between Comcast’s unqualified fastest internet speed claim and its supporting evidence: crowd-sourced data (and an ‘award’ given by the third party which collected that data),” the agency noted in its decision, adding “…even where methodology is reliable for one purpose, it may not be sufficient substantiation for advertising claims made in a different context.”

Also, the National Advertising Division noted, Comcast’s claims of superiority were not limited to any particular tier of service, making it difficult to compare.

Comcast — and just about everybody else — offers several tiers of service, with some providing faster speeds than others. “NAD determined that the claims at issue in both print and broadcast advertising reasonably conveyed a message of overall superiority — that regardless of which speed tier purchased by a consumer, in a head-to-head comparison, XFINITY would deliver faster speeds,” the statement read.

As for the WiFi claims, the National Advertising Division recommended Comcast stop claiming it offers the “fastest in-home WiFi” because many consumers don’t understand that connection speed is dependent not only on the internet speed, but the speed of the router as well.

Finally, the agency recommended Comcast discontinue or modify ads that imply Verizon is shutting off service to customers with copper-based services. The claims are “potentially confusing to consumers” and should be “discontinued or modified to accurately communicate that Verizon is changing the way it is delivering, rather than eliminating, phone service to consumers,” the National Advertising Division said.

This is just the latest battle in a long war between the two telecommunications titans.

Earlier this year, Comcast challenged Verizon’s claims of being “rated #1 in internet speed,” after Verizon touted the results of a readers’ survey done by PC Magazine. In that case, the National Advertising Review Board agreed with Comcast, asking Verizon to modify the “#1” claim, noting it wasn’t based on independent testing.

The ruling has no legal force, but advertisers have a lot of respect for the New York-based National Advertising Division and National Advertising Review Board, which are part of a system of voluntary self-regulation by the advertising industry. We’ll keep an eye on the case and let you know what happens with Comcast’s appeal.

Be wary of YouTube video reviews


via Be wary of YouTube video reviews,

If you see an online review for some product from someone who’s known as an expert and doesn’t say it’s advertising, you could be forgiven for thinking you were getting good, unbiased information. These days, many consumers look for reviews before making a decision about an upcoming purchase.

But a settlement this week between entertainment giant Warner Bros. and the Federal Trade Commission has (once again) shone an uncomfortable spotlight on the practice of distributing online reviews that are actually cleverly packaged marketing, bought and paid for by the distributor. The problem is that the lines are being blurred between advertising and unbiased reviews.

Warner Bros. Home Entertainment Inc. reached an agreement with the FTC this week on a case that involved the video game “Middle Earth: Shadow of Mordor.” The agency had alleged that Warner Bros. paid online “influencers” thousands of dollars to post positive gameplay videos on YouTube and other social media. According to a news release from the FTC, the videos got more than 5.5 million views.

Readers with a keen memory may recall that we wrote about a similar issue back in September, when a company called Machinima was allegedly paid up to $30,000 to produce YouTube video reviews for Microsoft’s Xbox One game platform.

The agency alleges that Warner Bros., working through its advertising agency Plaid Social Labs LLC, hired influencers to develop sponsored gameplay videos and post them on YouTube. “Warner Bros. also told the influencers to promote the videos on Twitter and Facebook,” the FTC noted, “generating millions of views.” One video alone, produced by Swedish comedian and video producer PewDiePie, garnered more than 3.7 million views.

Under a proposed FTC order announced this week, Warner Bros. is “barred from failing to make such disclosures in the future and cannot misrepresent that sponsored content, including gameplay videos, are the objective, independent opinions of video game enthusiasts or influencers.”

Warner Bros. is alleged to have paid each influencer from hundreds to tens of thousands of dollars, gave them a free advance-release version of the game, and told them how to promote it (with the stipulation they promote the game in a positive way and not disclose any bugs or glitches).

In addition, the FTC alleged Warner Bros. “instructed influencers to place the disclosures in the description box appearing below the video. Because Warner Bros. also required other information to be placed in that box, the vast majority of sponsorship disclosures appeared “below the fold,” visible only if consumers clicked on the “Show More” button in the description box.

The issue for regulators (and many consumers) is not necessarily that companies are paying people to endorse their products, but rather that the money connection remains hidden, casting doubt on whether the reviews are truly unbiased, or just a marketing tool. An informal survey from game-developer website Gamasutra of YouTubers with upwards of 5,000 subscribers found some interesting results: More than a quarter of these YouTubers admitted to taking money to record videos. And, Gamasutra found, the larger the audience, the more likely they would be to have no problem accepting cash for their reviews.

“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”

Many YouTubers argue that they are putting a lot of work into producing and publishing their videos, and deserve some compensation. But there is an important line between advertising and independent reviews that shouldn’t be crossed. Failing to disclose when you’ve gotten paid by a company to promote something (and that there are restrictions on just how honest you can be with your review) presents serious ethical challenges for those who produce and consume such content online.

If you are looking for an unbiased online review, it’s a good idea to check several sources and compare them. Check the information box carefully. If any payment was made to perform the review, ethical reviewers will prominently disclose this fact. But keep in mind that, even if you don’t find any disclosures, take any reviews with a healthy dose of skepticism, and the lack of any negative information in the review could be a red flag.

Animation brings drugs to life


Stock Photo

via Moak: Animation brings drugs to life,, 04/01/2016

It seems a little disconcerting; maybe terrifying is the right word. A giant big toe with a determined face, football helmet and — strangely, gloved hands — battles against toenail fungus. A leering, disgusting monster named “Digger the Dermatophyte” burrows under the toenails of an unwitting victim. A twisted-up, miserable-looking intestine with a face, legs and arms haunts a victim by giving her Irritable Bowel Syndrome.

These are not the stuff of nightmares, although you’d be forgiven for thinking that. These three are among dozens of animated characters designed to hawk prescription drugs. You can’t turn on commercial TV without seeing ads for some type of prescription medicine. The menagerie has included giant, glowing luna moths invading sleepers’ bedrooms (Lunesta), animated “pipe people” advertising continence drugs (Vesicare) and cartoonish, personified internal organs such as bladders (Myrbetric) and even prostate glands (Rapaflo).

One recent example is an ad for the insomnia drug Belsomra, which features a woman with insomnia, for whom “sleep” is a fluffy, cat-like creature in the shape of the word “sleep”, while “wake” is quite dog-like. As she tries to sleep, the “sleep” eludes her grasp while the “wake” wags its tail playfully. It’s actually a little endearing, and if you’ve ever had insomnia, you could relate.

Direct-to-consumer pharmaceutical advertising (DTCPA; yes, it’s a thing) now dominates the airwaves. Most countries don’t allow it, with the U.S. and New Zealand being the only exceptions. The well-funded lobbyists for the drug industry have been trying to get the European Union and other countries to drop their bans on the practice. Nevertheless, there’s big money involved. Drug companies spent $4.5 billion per year on drug advertising, according to the AMA, and many reports indicate advertising can accelerate demand considerably.

We’ve gotten used to these commercials, but it’s a relatively new phenomenon. Until the 1980s, there were few (if any) ads for prescription medications. Patients might hear about some new drug from a friend, and would mention it to their physicians, but usually it was the other way around. Then, in the 1980s, ad executives decided to try something new; direct-to-consumer advertising for prescription drugs. Practically overnight, we were being barraged with commercials to pique our interest in particular brands of drugs.

The U.S. Food and Drug Administration has recently made news by announcing it’s studying whether these characters help to overcome patients’ doubts or concerns about the medications’ possible side effects. It’s well-known in advertising that people tend to react more positively to a concept that is friendlier or relatable, and the FDA is concerned about whether they might be making people more susceptible to asking their doctor to prescribe them.

“The positive effects these animations induce might transfer to the brands being advertised,” the FDA wrote. “It is also possible that animated characters may lead to lower perceived risk by minimizing or camouflaging side effects.”

The American Medical Association called last year for a halt in these ads, saying they create demand for costly drugs patients don’t need, driving up costs for everyone when often there are effective alternatives at lower cost.

“Personifying animated characters may interfere with message communication,” the FDA noted. “Whether personified characters lead to reduced comprehension of risk and benefit information in drug ads is an important and unanswered question.”

For its study, the FDA will conduct two experiments with made-up drugs, both based on real-life counterpart drugs for dry eye and psoriasis. “Medications for psoriasis have very long, serious lists of risks and side effects, whereas chronic dry eye medications have relatively few risks and side effects,” the FDA noted. The agency will enroll people who actually have chronic dry eye or psoriasis in the studies.

The FDA will enlist ad agencies to create commercials of similar quality to those now being aired, to study live-action vs. animated ads. One experiment will examine whether it makes any difference what type of animation technique is used. For example, some ads — such as ads for the depression drug Abilify, look more like traditional cartoons (using a method called “rotoscoping” to trace over live-action shots to create a cartoon effect), while others use more sophisticated methods, such as those used by big-budget animation studios. The other study will create a new animated, anthromorphic “mascot,” and conduct studies on how viewing the ads affect viewers.

Until these issues are settled, though, one fact remains: no one is better-qualified than your physician to figure out what drugs you might need, and though a cartoon character may be cute or creepy, they probably haven’t been to medical school.