BBB National Programs Archive

NAD Reviews Advertising for USB Flexperks Visa, Following Challenge by American Express

New York, New York – August 31, 2009 – The National Advertising Division of the Council of Better Business Bureaus has recommended that US Bank modify or discontinue certain advertising claims for the FlexPerks Visa Card. NAD determined, however, that the advertiser provided reasonable support for certain claims.

NAD, the advertising industry’s self-regulatory forum, examined advertising for the FlexPerks Visa Card, following a challenge by American Express.  The following claims are representative of those at issue in this proceeding: 

  • “More Value vs. Less”
  • “Fast vs. Slow”
  • “Free vs. Fee”
  • “Always Double Rewards”
  • “No Blackout Dates” or capacity controls
  • “Redemptions Starting at 5000 FlexPoints”
  • “Half as Many Places”

At the outset of NAD’s inquiry, the advertiser stated that most of its challenged claims appeared in postcard mailings, and that the postcards are no longer in circulation. Nevertheless, the advertiser reserved the right to make the claims in other media and NAD proceeded to examine the merits of each claim.

US Bank and American Express are vying for the business of consumers who carried US Bank’s WorldPerks Visa card, which allowed consumers to earn miles on Northwest Airlines. As part of Northwest’s merger with Delta Airlines, the WorldPerks program is being merged into the Delta SkyMiles frequent flyer program.  Delta selected American Express as the exclusive provider of the co-branded credit card for the airline and its loyalty program.

The advertiser explained that the FlexPerks program allows its cardholders to earn FlexPoints on card purchases, and to redeem those FlexPoints toward travel with 150 different airlines and travel partners, on gift certificates or merchandise, or on statement credits. 

NAD first addressed the advertiser’s “more value” claims. In the absence of consumer perception evidence, NAD used its own expertise to interpret what messages may be reasonably conveyed by the advertising.

NAD determined that these advertisements convey the message that the single available reward for 20,000 FlexPoints is up to $400 of airline travel, whereas the single available reward for 20,000 SkyMiles is $200 worth of airline travel. In reality, however, the Pay with Miles program represents just a small fraction of SkyMiles air-travel redemptions, and an even smaller fraction of total SkyMiles redemption. By posing a comparison between the value of Flexpoints versus that of SkyMiles, the advertisement suggests that it is comparing two similar programs.

Moreover, NAD noted that ordinary consumers might not understand the exact meaning of the terms “Pay With Miles” and “Awards Tickets.”  NAD noted that even if consumers read the parenthetical disclosure, “(using Delta SkyMiles Pay with Miles),” NAD determined that they would not necessarily understand the message that the “Pay With Miles” program is qualitatively different than the American Express  “Awards Tickets” program.

NAD therefore recommended that the advertiser discontinue its various “more value” claims, including the side-by-side comparison showing the value of 20,000 points versus 20,000 miles.

Regarding the advertiser’s “Fast vs. Slow,” claims, NAD determined that the statement that cardholders can earn double FlexPoints on “many everyday purchases,” such as “gas, groceries or all airline purchases—whichever you spend most on each monthly billing cycle,” was an accurate description of the advertiser’s program. However, NAD further determined that the evidence in the record did not support the claim that earning rewards on SkyMiles is “slow,” as compared with earning FlexPoints. NAD recommended that the advertiser discontinue its “fast vs. slow” claim and the accompanying side-by-side comparison of opportunities to earn “Double” Flexpoints versus “Double” SkyMiles.

NAD further recommended that US Bank discontinue the claim that FlexPerks cardholders “[a]lways” earn “[d]ouble [r]ewards” on the highest of gas, groceries, or airline purchases, plus “always” double rewards on cell phone purchases and expenses. NAD noted that for all purchases exceeding $120,000 in a calendar year, FlexPerks cardholders generally earn only half FlexPoints for each dollar spent, not “double rewards.”

NAD determined that the advertiser could support its “Free vs. Fees” claim. The advertising at issue made clear that Delta’s fee is not always $150, but can be either “$150, $100, $75 or $0.”  NAD concluded that Delta’s imposition of fees is a real and significant difference between the SkyMiles program and the US Bank FlexPerks program that the advertiser is entitled to advertise. Further, NAD determined that the claim “Redemptions Starting at 5,000 FlexPoints,” was not misleading.

However, NAD determined that the claim that SkyMiles redemptions are subject to “blackout dates” and “capacity controls,” was not supported by the evidence. Although consumers sometimes need to redeem a larger number of miles for certain flights, NAD found that such redemption was not the equivalent of being “blacked out.”

Finally, NAD considered the advertiser’s claim that American Express’s SkyMiles card can be used in “half as many places” as the FlexPerks card. NAD recommended that the advertiser modify this claim by clearly and conspicuously disclosing that the claim is based on global, not domestic, data.

US Bank, in its advertiser’s statement, said that none of the claims at issue before NAD is still in circulation.

“However, to the extent that US Bank ever decides to re-run any of the advertisements on which the NAD made recommendations, US Bank will tailor such advertisements to take into account the NAD’s views,” the company said. “US Bank is pleased to have participated in the self-regulatory process and thanks NAD for its detailed attention to this matter.”