NAD Finds Verizon Acted Properly in Discontinuing 'Rated #1' Claim Following Comcast Challenge

New York, NY – Jan. 23, 2012 -The National Advertising Division of the Council of Better Business Bureaus has determined that Verizon Communications, Inc., acted properly in discontinuing claims made for Verizon FiOS Internet Services that were based on certain survey data.

The claims at issue were challenged before NAD, the advertising industry’s self-regulatory forum, by Comcast Cable Communications, Inc. The following is representative of the challenged claims:

• “Rated #1 for supporting multiple users and devices simultaneously*”

(*April 2011 Proprietary survey conducted by ChangeWave Research, based on HD picture quality ratings among a panel of educated consumers, for more on ChangeWave Research visit www.changewaveresearch.com).

In this case, Comcast argued that NAD had concluded in a previous case that such implied comparative performance claims necessarily implied  that the study participants compared the advertiser’s services to those of other service providers and ranked the advertiser’s competitors lower – when that was not the case. Further, the challenger pointed out that NAD had previously held that such testing was insufficient to support the comparative performance claim made.

In response to NAD’s inquiry, the advertiser asserted that it had permanently discontinued the challenged the claim and would not use the claim in future advertising, action that NAD determined was appropriate and necessary. Verizon, in its advertiser’s statement, said the company had permanently discontinued the claim. However, the company said, it is “respectfully is of the opinion that a properly qualified claim citing the ChangeWave research conclusion that Verizon customers rate the performance of their service in supporting multiple devices and users simultaneously higher than competitor customers rate the performance of their respective services does not imply a comparison made by respondents against other service providers’ internet services.”

NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising.  Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.

About Advertising Industry Self-Regulation: The National Advertising Review Council (NARC) was formed in 1971. NARC establishes the policies and procedures for the National Advertising Division (NAD) of the Council of Better Business Bureaus, the CBBB’s Children’s Advertising Review Unit (CARU), the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP).

The NARC Board of Directors is composed of representatives of the American Advertising Federation, Inc. (AAF), American Association of Advertising Agencies, Inc., (AAAA),  the Association of National Advertisers, Inc. (ANA), Council of Better Business Bureaus, Inc. (CBBB), Direct Marketing Association (DMA), Electronic Retailing Association (ERA) and Interactive Advertising Bureau (IAB).  Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation.

NAD, CARU and ERSP are the investigative arms of the advertising industry’s voluntary self-regulation  program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. NARB, the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate NAD/CARU cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s primary source of funding is derived from membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing Association. For more information about advertising industry self-regulation, please visit www.narcpartners.org.