National Advertising Division Finds Spectrum Mobile Pricing Claims Supported with Adequate Disclosures; Recommends Disparaging AT&T Claim Be Discontinued

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New York, NY – March 8, 2022 – The National Advertising Division (NAD) of BBB National Programs determined that, with appropriate clear and conspicuous disclosures, Spectrum’s “all-in” price claim (“For no hidden charges or surprise fees, choose Spectrum Mobile”) is supported. However, NAD recommended that the advertiser discontinue the disparaging claim that AT&T intentionally misleads consumers about the pricing for AT&T’s wireless service, which NAD concluded was a reasonable takeaway from the challenged advertising.

AT&T Services, Inc. challenged express and implied claims made by Charter Communications, Inc., d/b/a Spectrum in the nationally broadcast television commercial “Surprise Fees Ad” for Spectrum Mobile.

Disparaging Claim

NAD considered whether the Surprise Fees Ad falsely disparages AT&T and its business practices through its depiction of AT&T actively training its employees to not tell customers about the additional taxes and fees that AT&T charges on top of its advertised prices, or if it merely highlights the differences between Spectrum and AT&T’s pricing models (namely, that Spectrum Mobile pricing includes taxes and fees, and AT&T’s does not) in a humorous way. 

NAD determined that while the acting in the Surprise Fees Ad was too over-the-top to be taken as a literal depiction of AT&T’s sales practices, the commercial conveyed the objective messages that require support.  Specifically, NAD determined that the commercial reasonably conveyed the message that AT&T misleads consumers about the price of its wireless service. NAD noted that this message is underscored by the tagline at the end of the commercial, “AT&T IS SELLING IT. DON’T BUY IT.” NAD found that, by both figuratively and literally warning consumers not to “buy” what AT&T is “selling,” the tagline conveys the disparaging message that AT&T is intentionally “duping” or “tricking” consumers about the cost of AT&T wireless and that at a minimum, consumers should exercise caution when dealing with the company.

Because such a message was not supported, NAD determined that the claim is falsely disparaging and recommended that it be discontinued in future advertising. NAD noted, however, that nothing in its decision prevents Spectrum from truthfully highlighting the differences between its pricing plan and those of AT&T or any of its competitors.

“All-in” Pricing Claims

NAD determined that Spectrum provided a reasonable basis for its “all-in” price claim (“For no hidden charges or surprise fees, choose Spectrum Mobile”). However, for the claim to not be misleading, NAD found that the advertiser is required to clearly and conspicuously disclose the requirement that Spectrum Internet is required to get Spectrum Mobile at the advertised price. NAD agreed with the challenger that the disclosure used in the Surprise Fees Ad was too fleeting and hard to read to be effective.

Therefore, NAD recommended that in future advertising for its mobile plans the advertiser ensure that the disclosure of the internet service requirement appears with sufficient prominence and duration so as to be noticed, read, and understood by consumers.

In its advertiser statement, Spectrum stated that it “will comply with NAD’s decision.”  Further, although Spectrum expressed disagreement with certain aspects of NAD’s decision, it stated that “it is a strong supporter of self-regulation and will comply with NAD’s recommendations.”

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