National Advertising Division (NAD)
Fast, Fair, Expert
The National Advertising Division monitors national advertising in all media, enforcing high standards of truth and accuracy. NAD examines advertising claims made for goods and services as diverse and critical as telecommunications, infant nutrition, over-the-counter medication and dietary supplements and “green” products. NAD accepts complaints from consumers, competing advertisers and local Better Business Bureaus. NAD’s decisions represent the single largest body of advertising decisions in the U.S.
In addition to its own monitoring, NAD provides a fast, expert forum for the resolution of competitors’ disputes. NAD handles about 150 cases each year and publicly reports its formal decisions.
Challenging a Competitor’s Claims
When a competitor’s false advertising claims threaten a company’s reputation and market share, decision makers need to answer three key questions:
- Which forum – federal court, network clearance process, Federal Trade Commission complaint or NAD challenge – will produce the fastest result?
- How much will it cost?
- What are the risks?
The Practical Advantages of the NAD Process
- Time to decision: The NAD process is designed to encourage truthful advertising by providing a forum for the relatively quick resolution of disputes. Barring an issue so egregious that a temporary restraining order (TRO) application will likely succeed, the NAD process is almost always faster than a court proceeding.
- Procedural costs: The NAD process will always be less burdensome. There is no document discovery or depositions. The matter cannot be delayed by filing counterclaims and the cost is much lower – one tenth or less than the costs of a litigated case, according to some NAD participants. National partners pay a discounted filing fee. All NAD decisions are available in the searchable Online Archive. National partners can purchase an archive subscription at a discounted price.
- Navigating uncertainty: Because NAD has a published body of case precedent and is staffed by expert decision makers who only work in advertising, 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. The procedures provide advertiser’s with an automatic right to appeal adverse decisions to the self-regulatory system’s peer review body, the National Advertising Review Board. NARB is comprised of 70 members from across the advertising industry. Appeals are heard by five-member panels.
How to File a Challenge Before NAD
No special form is needed to bring advertising to NAD’s attention.
Put the query or complaint in writing.
Enclose originals or photocopies of newspaper or magazine ads. If the advertising was on radio or television, be specific about the name of the product and company, the claims at issue, and where and when (e.g. what program) the advertisement appeared.
All challenges, including any supporting documentation, must be submitted in duplicate hard copy and in an electronic format (including evidentiary exhibits when possible.) To help ensure a timely review, challengers should strive to limit the length of their submissions to 8 double-spaced typewritten pages (excluding evidentiary exhibits) and limit the number of issues raised in a challenge to those that are the most significant.
All challenges made by companies and/or competitors shall be filed together with a check (see below for amount), made payable to the Council of Better Business Bureaus, Inc., as a filing fee to help defray some of the administrative costs associated with the advertising review process.
CBBB National Partner Filing Fees – Competitive challenges submitted to NAD by CBBB National Partners shall be filed with a check, made payable to the Council of Better Business Bureaus, Inc., in the amount of $15,000.
Non-National Partner Filing Fees – Competitive challenges submitted to NAD by businesses that are not CBBB National Partners shall be filed with a check, made payable to the Council of Better Business Bureaus, Inc., for:
$20,000, if the challenger’s gross annual revenue is less than $1 billion;
$25,000, if the challenger’s gross annual revenue is $1 billion or more.
The filing fee shall be accompanied by a statement indicating the category into which the challenger’s revenues fall. In the case of a challenge filed by a subsidiary, the filing fee is determined by the gross annual revenue of the parent company.
If a case is opened but subsequently closed administratively (i.e., in accordance with procedures but without a substantive determination), the filing fee will total $1500 for CBBB members and $2500 for non-members. (The difference between the initial filing fee and the administrative closing fees will be refunded to the challenging party.)
To learn more about the process, please contact Laura Ulrich Brett at lbrett (at) nad.bbb.org.