CFBAI_ProgramBackgrounds_4-28-2020

National Advertising Division

The National Advertising Division (NAD) monitors national advertising in all media, enforces high standards of truth and accuracy, and efficiently resolves disputes to build consumer trust and support fair competition. NAD reviews advertising based on challenges from businesses, complaints from consumers, or on its own initiative covering a wide variety of both industries and issues. NAD’s decisions represent the single largest body of advertising decisions in the United States.

Program Impact

NAD was established in 1971 to monitor and evaluate the truth and transparency of national advertising through a combination of independent monitoring and competitor disputes and has become a leading voice in providing guidance on truthful and transparent advertising and standards for substantiating advertising claims. Around 150 cases are handled each year through one of three tracks: Fast-Track SWIFT, Standard Track, and Complex Track. Reports of all case findings can be found in the BBB National Programs Online Archive

Truth & Transparency

Voluntary self-regulation helps create an honest and fair marketplace. Companies benefit from a level playing field and consumers benefit from a more trustworthy marketplace. A 90% participation rate demonstrates the depth of industry’s commitment to self-regulation and truth and transparency.

Issues We Examine

NAD’s legal team specializes in examining advertising claims for a diverse set of goods and services like telecommunications, infant nutrition, over-the-counter medication, and dietary supplements for a wide variety of issues from product efficacy to influencer marketing and the use of consumer reviews.

Time & Cost

The NAD process resolves advertising disputes efficiently and almost always faster than a court proceeding. There is no document discovery or depositions, no counterclaims, and the process requires less investment in time and cost than litigating a case.

Navigating Uncertainty

NAD has a published body of case precedent and is staffed by decision makers dedicated to resolving advertising disputes, using a process that provides advertisers the right to appeal adverse decisions to the National Advertising Review Board (NARB).

NAD Challenges

 

NAD offers three options for submitting challenges for review: Standard Track, Complex Track, and Fast-Track SWIFT. Click on the options below for more information on each track's process, challenge eligibility requirements, timeline, and fees to determine which track is best suited to handle your needs. BBB National Programs National Partners receive a discount on filing fees. 

 

 

Fast-Track SWIFT

Single-issue digital advertising cases with decisions in 20 business days. Learn More

Standard Track

Open to a variety of case types with decisions in four to six months. Learn More

Complex Track

Cases requiring complex substantiation. Time to decision is determined by the parties. Learn More

 

 

 

Why Use NAD for Advertising Challenges

When a competitor’s advertising harms consumer trust or threatens a company’s reputation and market share, decision makers need to answer three key questions:

  • Which forum will resolve my challenge most efficiently—federal court, Federal Trade Commission complaint, or NAD challenge?

The NAD process promotes truthful advertising resolving advertising disputes efficiently. Unless advertising is so misleading and causing sufficient harm that a temporary restraining order application will likely succeed, the NAD process is typically faster than a court proceeding.

 

 

  • How much will it cost?

 

Filing a challenge with NAD is almost always more cost effective than other options. There is no document discovery. There is no deposition. The matter cannot be delayed by filing counterclaims. Our streamlined process saves time and money.

 

 

  • What are the risks?

Because NAD has a published body of case precedent and is staffed by decision makers dedicated to resolving advertising disputes, the outcome is more predictable than a court proceeding where individual judges have crowded dockets of a wide array of cases and different decision-making styles. Our procedures provide advertisers with an automatic right to appeal adverse decisions to the self-regulatory system’s peer review body, the National Advertising Review Board.

 

 

 

 

 

Policies & Procedures


Any company, consumer, or non-governmental organization can file a challenge with NAD. We handle about 150 cases each year and our decisions represent the single largest body of advertising decisions in the United States. The NAD | NARB Policies and Procedures describe the details and parameters of NAD's challenge review process.

News & Blog

 

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
Blog

After Seven Months, the Verdict is in: Fast-Track SWIFT is Fast and Fair

The National Advertising Division (NAD) Fast-Track SWIFT advertising challenge process launched seven months ago as a faster way to resolve single-issue cases. The process has kept its promise of fast and fair decisions. This blog covers lessons learned and best practices gathered by the NAD team since the launch of SWIFT.
Read more
Blog

NAD 2020: A Virtually Stellar Advertising Law Conference

This year the National Advertising Division (NAD) Annual Conference, NAD 2020, welcomed marketing and advertising law experts to a virtual event that featured high-caliber keynote speakers, cutting-edge panels on advertising law, and key topics such as COVID-19 fraud, diversity and bias in advertising law, and the controversial role of social media. Here are some takeaways from the event that we found worthy of a call-out.
Read more
 

 

 

Decisions

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.”

###

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
 

 

 

Upcoming Events

NAD at 50 and a Look Back at Advertising Self-Regulation

A discussion moderated by Peter Marinello, Vice President, Direct Selling Self-Regulatory Council (DSSRC), BBB National Programs
Learn more
Jan 27, 2021 Virtual

RE:formulate: Fermentation-Enabled Alternative Protein Innovation Summit

BBB National Programs Speaker: Alexander Goldman, Attorney, National Advertising Division
Learn more
Jan 28, 2021 Virtual

4th Annual Legal, Regulatory, and Compliance Forum on Advertising Claims Substantiation

BBB National Programs Speaker: Kathleen Dunnigan, Senior Attorney, National Advertising Division and Angela Tiffin, Senior Attorney, Children's Advertising Review Unit
Learn more
Feb 03, 2021 Virtual

Social Media and Mobile Devices 2021: Addressing Corporate Risks

BBB National Programs Speaker: La Toya Sutton, Attorney, National Advertising Division
Learn more
Feb 17, 2021 Virtual
 

 

 

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