BBB National Programs National Advertising Division Recommends that Commercials for Capital One Spark Cash Card be Modified

For Immediate Release

Contact: Laura Brett, Director, National Advertising Division, 212.705.0109 / lbrett@bbbnp.org

New York, NY – Feb. 18, 2020 – The National Advertising Division (NAD) determined that consumer testimonials featuring endorsers who describe earning $36,000 and $115,000 in cash back rewards, through the Capital One Spark Cash Card benefit of unlimited 2% cash back on all purchases, fail to describe the limited and exceptional circumstances in which all of those expenses can be charged to the Spark Card.  Therefore, NAD recommended Capital One Financial Corporation modify its advertising to describe the exceptional circumstances in which these results are achieved or clearly and conspicuously disclose the generally expected performance in the depicted circumstances or the limited applicability of the endorsing consumer’s experience.  The claims at issue were challenged by competitor JPMorgan Chase Bank, N.A., and consisted of two stories told in six commercials, with each story consisting of a testimonial by the owner of a successful small business.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is a division of the BBB National Programs’ self-regulatory and dispute resolution programs.

The claims challenged by Chase included, but were not limited to:

Express claims:

• “[L]ast year I earned $36,000 in cash back, that’s right $36,000 in cash back, which I used to offer health insurance to my employees.” (without any disclosure of typical customer experience)
• “I redeemed $115,000 dollars in cash back in just one year, which doubled our marketing budget last summer.” (accompanied by the super “The actual amount of cash back you earn will depend on your credit limit, payment history and purchase activity”)

Implied claims:

• The typical Capital One Spark Cash Card small business customer will earn very substantial cash back rewards in a year ($36,000, which is such a large amount that it can provide health insurance for the business).
• The typical Capital One Spark Cash Card small business customer will earn very substantial cash back rewards in a year ($115,000, which is such a large amount that it can result in a doubled marketing budget).

NAD noted that the challenged advertising consists of testimonials that business cardmembers can earn unlimited 2% cash back on all purchases on the Spark Card. The advertising discloses, “The actual amount of cash back you earn will depend on your credit limit, payment history and purchase activity.”

The challenger argued that Capital One should disclose the typical cash back expected for Spark Card users because the testimonials describe cash back rewards that are far outside the norm. In order to earn the $36,000 and $115,000 cash back rewards mentioned in the two stories, a small business owner would need to spend $1.8 million and $5.75 million per year on their Spark Card, respectively.  The challenger stated that VISA’s data on small business credit card usage for 2018 shows that the top 10% of spenders averaged $228,271 per year in charges, data that was undisputed in the record.  Whereas, the advertiser contended that no disclosure is necessary because small business owners can do the math: 2% of their monthly spend is what they will earn from the Spark Card. As a result, business owners understand the circumstances under which they could achieve the cash back rewards described in the testimonials.

NAD determined that although the commercials provide the general information that the Spark Card provides 2% cash back on all purchases, and not all business owners have sufficient expenses and income to reach the cash back touted by the endorsers, the limited and exceptional circumstances in which all of those expenses can be charged to the Spark Card are not described.  NAD noted that, based on the data in the record, the endorsing business owners charge far above the average of even the top 10% of small businesses. Yet, it remains unclear under what circumstances a Spark cardmember would have a sufficient line of credit or a sufficient number of intermittent payments to maximize the cash back achieved with the card.

Further, NAD concluded that the disclosure, “The actual amount of cash back you earn will depend on your credit limit, payment history and purchase activity,” is unlikely to be noticed, read and understood.  NAD noted that the disclosure is in small type and appears onscreen while the endorser-business owners are moving, talking and providing detailed information about their business and cash back earned, which is likely to distract consumers’ attention away from the intended message. In addition, although the disclosure highlights some limitations on the ability to earn cash back, it contains no information about typical cash back results. In order to cure the misleading message that the experience of the endorser is typical, NAD recommended that the advertiser modify its advertising to describe the exceptional circumstances in which these results are achieved or clearly and conspicuously disclose the generally expected performance in the depicted circumstances or the limited applicability of the endorsing consumer’s experience.

In its advertiser’s statement, Capital One stated that it “agrees to comply with NAD’s recommendations.”  Further the advertiser stated that it although it takes issue with NAD’s finding that “the limited and exceptional circumstances under which the results were achieved are not described, Capital One will take NAD’s guidance into account.”

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About the National Advertising Division: National Advertising Division (NAD), a division of BBB National Programs, provides independent self-regulation overseeing the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for truth and accuracy.

About BBB National Programs: BBB National Programs fosters trust, innovation, and competition in the marketplace through the development and delivery of cost-effective, third-party self-regulation, dispute resolution and other programs. BBB National Programs is the home of industry self-regulatory and dispute resolution programs that include the National Advertising Division (NAD), National Advertising Review Board (NARB), BBB EU Privacy Shield, BBB AUTO LINE, Children’s Advertising Review Unit (CARU), Children’s Food and Beverage Advertising Initiative (CFBAI), Children’s Confection Advertising Initiative (CCAI), Direct Selling Self-Regulatory Council (DSSRC), Digital Advertising Accountability Program (Accountability Program), and the Coalition for Better Advertising Dispute Resolution Program (CBA DRM). The programs are designed to resolve business issues and advance shared objectives by responding to marketplace concerns to create a better customer experience. To learn more about industry self-regulation, please visit: BBBNP.org.