Buzzwords Are Key to Spotting Deceptive Ads
The big ad for ceiling fans--$295 with “free installation” or $255 for do-it-yourselfers --offended some people. “How is installation free if you pay $40 more than other people to get it?” asked one reader. “Isn’t such advertising illegal?”
Oddly enough, the advertiser had tried to be particularly “up front” in its pitch. “The prices were right there,” said the store’s owner, “with no asterisks and no footnotes, and the choice is very clear. Our regular price was $295, and now you can have it installed for free or have $40 off.”
The use of the word “free” is a little odd, of course; it might better have said “installation included or $40 off.” “Free” is also a word whose use is addressed by various laws and regulations. But the consumer’s options here were indeed clear--the basic goal of any pertinent regulation.
FTC Criticized
But there are interesting questions here. How much official protection does the consumer really need, and how well can he protect himself?
There are laws against deceptive and misleading advertising, starting with the often cited prohibition against “unfair or deceptive acts or practices” in the Federal Trade Commission Act. Its application is decided on a case-by-case basis, but the FTC has also over the years promulgated additional rules and specific “guides” for industry in specific situations. Odd in their variety and reflecting changing concerns, these may address the advertising and labeling of sleeping bags, supermarket specials, or fallout shelters, and even some particular uses of the word free, e.g., if something’s free with another purchase, the free item must cost nothing, and the other item no more than its regular price.
The FTC, criticized by some for being almost vigilante in pre-Reagan days, is criticized by others for being understaffed and less active now. It saves its strength for major cases--the investment scams and “hard-core fraud” that cheat people of millions of dollars, says Marcy Tiffany, director of the FTC’s Los Angeles regional office. “Everyone who makes a misrepresentation to consumers ought to be stopped,” she says, “but you have limited resources and have to make cuts somewhere.”
State statutes, too, may address advertising problems. Minnesota, the first to have a false advertising law, simply prohibits misleading or deceptive advertising--a law purposely “broad in its language and elastic in its application,” says Doug Blanke, director of the Minnesota attorney general’s consumer division.
Others have a general law and specific regulations. The Massachusetts Consumer Protection Act, for example, prohibits unfair and deceptive acts or practices, and associated regulations “define what would be considered unfair or deceptive,” says Edgar Dworsky, director of consumer education in the state’s executive office of consumer affairs.
‘Self-Regulatory Mechanism’
California’s general statute prohibiting untrue or misleading “representations” is followed by some specific laws--on advertising retail sale prices, for example, or on the picturing of sale items. These don’t necessarily reflect their importance, but just the “happenstance (of) how bills get passed,” says Herschel Elkins, head of the consumer law section for California’s attorney general.
Local authorities may also act under municipal ordinance or state law. The Los Angeles city attorney recently prosecuted the Beverly Hills-based advertisers of “cholesterol-reducing” Cho Low Tea, available by mail order in 30-day supplies for $29.85. The charges were false advertising, for falsely “representing a drug to have medicinal qualities,” and grand theft, for not paying for their newspaper ads.
There’s also a “self-regulatory mechanism” for the business community--the National Advertising Division of the Council of Better Business Bureaus, which publishes a comprehensive code of advertising standards. The NAD also takes complaints about specific ads; most of these come from competitors. These are reviewed and referred to the advertiser for substantiation or modification.
Many consumers are surprised that deceptive ads could even get into a newspaper. “Generally, it’s up to an account executive,” says Los Angeles Times spokeswoman Laura Morgan, “if something’s hazy or in the middle ground to red-flag it to a manager.”
Appearance even “in a prestigious newspaper is no guarantee,” says Elkins. “No one is going to look at everything. Newspapers are not liable by statute unless they have some knowledge of the misrepresentation--if we find that they’ve advised the advertiser, for instance, or if we’ve brought it to their attention.”
As the Cho Low Tea case illustrates, however, the advertiser who’d swindle consumers may also swindle newspapers: 105 papers ran the tea ad and were stiffed $600,000 in all. The American Newspaper Publishers Assn. therefore runs seminars now “telling (members) what they should be looking out for,” says Jim Ralph, vice president of ANPA Credit Bureau Inc.
‘Need the Law Enforcer’
The seminars single out some troublesome categories--including credit repair, commodities sales, home insulation, health aids, work-at-home schemes--and some tip-off phrases. These include, says Ralph, “guaranteed results,” “no risk,” “respond immediately,” “scientific breakthrough” and “wholesale to you.”
The consumer could spot these buzzwords, too, of course, plus a few more. There’s always, “This ad is a test,” says Dworsky, or “Hi, I’m Joe; I found the key to riches,” or “Congratulations, you have won. . .”
In many cases, the consumer can discover for himself a misrepresentation, often in an inquiring phone call, and the remedy is simple. “If it was falsely advertised, don’t buy the product,” says Elkins. Moreover, there’s often little “tangible harm to the consumer,” says Dworsky, “because it tends to be a bargain the consumer didn’t get. It’s more of a disappointment.”
The ceiling fan ad, though somewhat off in its choice of words, is simpler yet, requiring only a complete reading. And although newspapers might serve readers better by catching such things themselves, it doesn’t take a G-man to spot them.
“In the final analysis,” says Blanke, “the best and most reliable protection is self-protection, but you need the law enforcer because many ordinary things the consumer cannot test--scientific claims, for example, or some mail-order goods. They sound reasonable on their face, but you can’t test the claims.”
