Legal Review: Getting Back to the Basics1 May, 2013 By: Gregory J. Sater Response
If you’ve ever seen professional athletes train, you know they stick to the fundamentals — practicing them over and over again, breaking down every step.
So, this month, rather than write about some new legal issue making its way through the court system, I thought it might be useful to “train” by going through the basic building blocks of reviewing a DR infomercial or commercial for legal compliance: what are the steps; what are the risk-reward judgment calls that someone needs to make; and when is the best time to start the process?
Taking the last question first, the best time to start the legal review process is at the very earliest stage of brainstorming your DR campaign. Don’t send counsel your script for the first time on the night before the shoot or, even worse, after the shoot. If you wait too long to consult with counsel, your options go down and your stress levels go up.
Second, here’s a refresher on the steps in the legal review process:
- Identification of claims. This includes identifying not only the claims that are expressly made, i.e., made with words, by going line by line and scene by scene, but also includes claims that the Federal Trade Commission (FTC) might allege to be made by implication, e.g., implied from the words, graphics or images in the commercial. It is the overall “net impression” of the ad that matters, and advertisers are responsible to substantiate any and all takeaways that a reasonable consumer would have, whether it arises from something that is expressly stated in the ad or not. Moreover, there can be more than one reasonable takeaway from one ad.
- Evaluation of claims substantiation. The FTC maintains that to comply with the FTC Act, advertisers need to have a “reasonable basis” for their claims, and need to have it in their company files prior to disseminating claims to consumers. What constitutes a “reasonable basis” is a matter of great debate right now between advertisers and the FTC, with the agency taking a harder and harder stance.
- Evaluation of testimonials and endorsements. Advertisers may not make claims via the statements made by their testimonialists when, for lack of legally sufficient substantiation, the advertisers could not make those claims directly. A testimonialist is someone who refers to their own personal experience with a product, or who is understood by consumers to have used that product, and so must be an actual user — unless you use an actor instead, in which case you must disclose that the customer is being portrayed by actor. Furthermore, the testimonialists’ experience must be representative of the experience that a typical consumer could expect from using the product, too.
- Addition of disclaimers or disclosures. Disclosures, such as supers, cannot be used to try to “cure” otherwise deceptive advertising claims, and when they are used properly to elaborate upon a claim that needs more elaboration, they need to be made clearly and conspicuously. If a disclosure is material, then in the FTC’s eyes it should be presented in an “unavoidable” way.
- Review of product demonstrations. Demos have to be real. It’s that simple.
- Review of offer terms. There are many “buy one, get one free” offers (BOGO) that usually involve customers having to pay for the additional processing and handling charges incurred to ship them the “free” second unit of the product. There also are many “negative option” offers involving the recurring billing of the customer’s credit card due to an enrollment in a continuity program. Review these terms for clarity, prominence and placement.
- What about the FDA? Some products fall under Food and Drug Administration jurisdiction because their advertisements make claims that the FDA would consider “drug” or “disease” claims, or a “medical device” claim. Legal counsel should be consulted early as to what language has gotten other companies in trouble with the FDA.