D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that regulate the kind of advertising they carry. The degree of substantiation that will be deemed reasonable varies with "the type of claim, the product, the consequences of a false claim,, the benefits of a truthful claim, the cost of developing substantiationand the amount of substantiation experts in the field believe is reasonable," the policy statement said. A. Misinterpretation The FTC, with the help of the Department of Justice, actively enforces the do-not-call rules. Which of the following statements describes the NAD/NARB review process? A number of self-regulatory mechanisms have been established by the business community in an effort to control advertising practices and among them the largest and best known is the ____. BBB is the largest and best known self-regulatory mechanism in United States, for controlling advertising practices, that has been established by the business community. WebAdvertising regulations exist in order to Demonstrate full and truthful disclosures to the public The purpose of Advertising regulations is to assure full and truthful disclosures to Today, an individual can file a complaint online from the FTC's website. WebWhen the Commissioner of Insurance requests a producer's business records, the must be produced. -brokers and consultants D. California Test of Affirmation E. Independent Business Alliance, D. Electronic Retailing Self-Regulation Program. D. Internet Beginning in the 1990s the Food and Drug Administration (FDA) began an aggressive campaign against a variety of companies to force them to change their labeling and promotional practices. because the company is in weak financial condition, the treasurer instructs the company claims manager to delay recording several large claims settlements. The representation, omission, or practice must be "material" such that it is likely to influence the purchasing decision. Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. WebMarketers should monitor developments outside a firm's control in order to detect and respond to threats and opportunities. The FTC can seek an injunction to stop advertisements that it believed violated the law. It defines an endorsement as any advertising message (including things such as verbal statements, demonstrations and depictions of the name of an individual or the name or seal of an organization) that consumers likely are to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser. C. Bureau of Alcohol, Tobacco and Firearms. -There was no substantial state interest. what is an insurance policy's grace period? C. Consumer Protection WebWhich of the following industries are significantly influenced by laws regulating product purity and labeling? Twisting is best defined as. So, in 19114 the Clayton Act was put in place to stop them. FTC's means to police deceptive advertising, Guides and the Child Online Privacy Protection Act A man owns an Audi, a Ford, and a VW. -Guides and the Child Online Privacy Protection Act Significant omission of important information. E. U.S. Supreme Court rulings, The _____ moved against a number of national advertisers as a result of inactivity by the Federal Trade Commission (FTC) during the Reagan administration. -no interest will be charged on loan balance B. Robinson Patman Act Children If you advertise directly to children or market kid-related products to their parents, its important to comply with truth-in-advertising standards. the reinstatement provision in a health insurance policy is in which of the following situations would the insurer be liable for a loss? [4230]+[wxyz]=[2305]\left[\begin{array}{rr} Federal Trade Commission Chevron contended its products were just as good as Texaco's. A. conducting the contest or sweepstake only at the regional level and not national level. Consent agreement It is very expensive to get a case solved through NARC. is false or misleading, promotes unlawful goods or services, or is discriminatory on the basis of race. ADVERTISEMENTS OF LIFE INSURANCE AND Implying a benefit that does not exist. C. defined the requirements for advertising substantiation. The majority concluded that while "citizens may challenge compelled support of private speeech" they "have no First Amendment right not to fund government speech." B. all clients and B. offer only merchandise and no cash as part of the sweepstakes prizes. Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims: Advertising claims that significantly involve health and safety are usually presumed to be material. 1) Federal Trade Commission (FTC) (most active) controls unfair methods of B. True (Firms in monopolistically competitive markets invest in advertising more than firms in other markets. E. Central Hudson, The _____ empowered the Federal Trade Commission to regulate unfair or deceptive practices including those in advertising. 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. Advertising must be truthful and not misleading, with misleading ads sweeping up those in which relevant information is omitted, those that imply something that's not true and those in which any disclaimers or disclosures are not clear and not prominent enough for reasonable consumers to see, hear and understand them. protects insured from insurance company insolvency. It also obtained 19 civil penalties in 2012, including $22.5 million from Google, Inc. B. -protection of proceeds against the insured's and the beneficiary's creditors E. avoid comparative advertising. The key elements in the FTC's definition of deception are that the representation, omission, or practice must be likely to mislead the reasonable consumer and that it has: -Attempts by competitors to undermine or dilute these images or claims were regarded more seriously than in the past. Which of the following statements about the use of puffery in advertising is true? that has no correct answer. an accident and health insurer just received written proof of loss from one of its insureds. C. Wheeler-Lea Amendment all commercial e-mail messages must contain either a functioning return e-mail address or an "opt-out" mechanism. National Advertising Review Board E. Network standards have become more stringent in response to competition from independent and cable stations. 5. which of these is NOT considered a form of life insurance advertisement? D. U.S. Justice Department. Determining what constitutes commercial speech, however, is not easy. -subrogation. D. affirmative disclosure order 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. MMLAW Ch. 15: Regulation of Advertising Flashcards 2 & -3 \\ f(x)=(x5)(12x)f(x)=(x-5)(1-2 x) The judge can uphold the complaint or reject it. The issue of truth and deception in such ads gained both public and congressional attention in 2008 when Pfizer, Inc. canceled commercials for its Lipitor cholesterol pill that featured Robert Jarvik, an artificial heart pioneer. For example, an advertiser can argue that the deceptive statement is not material to the advertisement as a whole (that is, it will not influence the purchasing decision) or that the advertisement does not imply what the government thinks it implies. D. U.S. Department of Welfare C. Lanham Act C. Federal Communications Commission The division of Consumer Protection Policies and procedures for self-regulation of advertising industry are established by the ____. A. Mass Media Law Chapter 15: Regulation of Advertising - Quizlet C. Most FTC inquiries are settled by consent order. ) Better Business Bureau May also argue the claim in question is not material, and therefore will not impact a purchasing decision. B. Lanham Act As with the structure of the Federal Communications Commission described in Chapter 16, no more than 3 of the 5 commissioners can be from the same political party. Law of Agency DRAFT. E. Corrective advertising, Under the FTC's program of ____, Novartis Corporation was required to run advertising informing consumers that it could not substantiate its claim that Doan's pills were superior to other over-the-counter analgesics in treating back pain. E. Substantiation, Under the _____ Doctrine, the Federal Communications Commission (FCC) required stations to run commercials about the harmful effects of smoking. D. Federal Trade Commission D. Bureau of Alcohol, Tobacco, and Firearms One commissioner is chosen by the president to be the chairman of the FTC. 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. A. a commercial is rejected at the storyboard stage. C. U.S. -jurisdiction is not particularly limited But Congress amended the act in 1989, and now the law also prohibits an advertiser from making false claims about a competitor's product as well. D. discounts -It became somewhat easier for plaintiffs to win Lanham Act false advertising suits. an insurance company needs to obtain personal information from a third party concerning an applicant. WebUnder the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. -Stricter than the guide; actual rules; FTC does not tend to investigate certain issues; competitors or consumers usually are the ones to bring it to the FTC, Testimonials: Complaints against advertisers are prepared by the FTC staff and approved by a vote of the commission. -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. -annuity's guaranteed interest rate The registry, however, would also prove controversial. D. deception the New Jersey Temporary Disability Benefits Law. provides non-occupational disability benefits. it is basically when articles or tv programs are sponsored by companies or products or service (like how American Idol judges always drank from coke bottle or snapple bottles). -agents commission rate The company must conduct careful studies to provide support for the claim because: Federal Trade Commission Act Nestl claims "Nestl makes the very best chocolate," Snapple advertises that its beverages are "made from the best stuff on Earth," are all examples of: Circuit Court of Appeals held that Craiglist was protected from liability by Section 230 of the Communications Decency Act (CDA) after it posted rental ads with discriminatory statements such as "no minorities" and "no children" that violate the federal Fair Housing Act. The regulation of deceptive or untruthful advertising is a difficult task maintained by the advertising industry, the mass media and governmental agencies. WebAdvertising regulations exist to Assure full and truthful disclosures to the public An agent has committed an insurance crime that violates US code 1033 (interstate commerce). Ads can't be unfair, meaning the advertisement can't cause substantial injury to consumers that consumers No more than 3 of the commissioners can be from the same political party. As a discipline, marketing is not affected by things that occur outside of the firm's control. E. advertisers, government, and the television networks. The commission considers the entire advertisement as well as all other elements of a transaction when making this determination. The act or practice must be considered from the perspective of a consumer who is acting reasonably. A. ad substantiation 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. C. affirmative disclosure. C. affirmative disclosures A. In other words, the creators of ads should be wary of creating false implications. (2) An advertisement shall not state or imply that the payment or amount of nonguaranteed elements is guaranteed. The level of respect owed to another is based on Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser." Business Ethics and Legal Environment Final 1. A. Implied uniqueness To settle the issue, Ticketmaster agreed to pay refunds to consumers who bought tickets for 14 Bruce Springsteen concerts through its ticker resale Web site TicketsNow, and to be clear about the costs and risks of buying through its reseller sites. B. encourage advertisers to buy more media space. Does the FTC regulate all advertising? A. unsolicited order One of the most pervasive and annoying forms of advertising today is on the ________________. -The size of damage awards skyrocketed. A. In 2008 legislation was signed under which numbers placed on the list remain on it permanently unless consumers specifically request a number's removal by calling 1-800-382-1222. B. deception Parramore Corp has 12 million dollars of sales, 3 million dollars of inventories, 3.25 million dollars of receivables, and 1.25 million dollars of payables. 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. 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.") There was time when competition between businesses hardly existed. The act or practice must be considered from the perspective of a "reasonable consumer." D. Federal Trade Commission -beneficiaries 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. -This act protects American consumers even more by preventing mergers or acquisitions that are likely to stifle competition. In addition to policing false advertising, the FTC is charged with enforcing the nation's antitrust laws and several federal statutes such as the Truth in Lending Law and the Fair Credit Reporting Act. Is this message false or misleading? the basic defense against any false advertising complaint, traditionally, advertising agencies and publishers were not held liable in cases of false or harmful advertising which the advertiser agrees to refrain from making specific product claims in future advertising, chapter 9: Records and meetings (gathering in, Practice Exam: Life and Health Q's to practice, Supreme Court Cases AP Government and Politics, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Daniel F Viele, David H Marshall, Wayne W McManus. E. Federal Communications Commission. A. require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. If the commissioners agree that the advertisement is not misleading or deceptive, the case ends. she would like to borrow $15,000 against the cash value. 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. Finally, under the FTC's rules, telemarketers cannot call a person between the hours of 9 P.M. and 8 A.M. unless the person has given prior consent to such late-night, early-morning calls. 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. -The act also make sit illegal for a business to be a monopoly if that company is cheating or not competing fairly. In the past, after the commission issued a cease and desist order, businesses frequently attempted to undertake practices that fell just outside the narrow boundaries of the order. C. avoid self-regulation. in this situation, the treasurer may be found guilty of which of the following? Federal Communications Commission Adv. Mkt Ch 20 with Flashcards | Quizlet Falsely implying that a product benefit is unique to a brand. Quizlet A. In other words, the Livestock Marketing Association and the other plaintiff in the case objected to the fact that they were compelled to subsidized speech-the generic beef advertising campaign-to which they objected. Therefore, it is consistent with the limits the First Amendment imposes on laws restricting commercial speech.". -Maybe 3,000 B. D. corrective advertising. 180 seconds . D. Federal Trade Commission The following are all instances in which a court can overturn an FTC ruling: (1) "convincing evidence" that the agency made an error in the proceedings, (2) no evidence to support the commission's findings, (3) violation of the Constitution-for example, the agency did not provide due process of law, (4) the action goes beyond the agency's powers; (5) facts relied on in making the ruling are not supported by sufficient evidence, and (6) arbitrary or capricious acts by the commission.