What’s Up With “Up to” Claims?12 Jan, 2016 By: Amy Ralph Mudge, Venable L.L.P., Randal M. Shaheen
For many years, the substantiation standard for so-called “up to” claims was whether an “appreciable number” of consumers could enjoy the claimed maximum benefits. In addition, various state and local pricing laws shaped best practices for such claims.
That changed in 2012, when the Federal Trade Commission (FTC) brought several cases involving “up to” savings claims for replacement windows. Part of the FTC’s arguments relied on industry-shocking consumer research demonstrating that consumers did not understand even relatively clear disclosures for the claims. Accordingly, the resulting consent orders presented a new standard requiring that “all or almost all” consumers be likely to achieve the maximum claimed savings in order to justify an “up to” savings claim.
For its part, the Better Business Bureau’s National Advertising Division (NAD) largely stuck to the old standard, with the exception of cases where the purchase required a significant investment. In those circumstances, the self-regulatory body’s thinking seemed more aligned with the FTC’s view that all or almost all consumers should be likely to receive the maximum benefit.
However, a recent NAD decision presents a third way to look at “up to” claims. In the matter, AT&T challenged T-Mobile’s advertising inducing customers to “ditch and switch” their existing wireless carrier with claims that T-Mobile would “pay off your phone when you trade it in,” “cover every penny of your old device payment plans,” and “pay off your phones and buy out your contracts, up to $650 per phone.”
AT&T claimed the $650 cap was inconsistent with T-Mobile’s promise that it would cover “every penny” because there could be situations where customers seeking to switch owed more than $650.
T-Mobile countered there was not a $650 cap, and that it would reimburse all costs associated with consumers who switched. The “up to” figure, T-Mobile claimed, was used to demonstrate the generosity of its offer.
In its decision, NAD noted that “up to” can have different meanings depending “on the context in which the claim appears and the product category to which it is being applied.” It also specifically distinguished T-Mobile’s claim from instances where “up to” claims are “used to tout a product’s absolute best possible results or the savings a consumer might experience.”
That said, NAD did have concerns about other aspects of the offer’s presentation and execution, and it did recommend that T-Mobile discontinue the “up to” claim because of potential consumer confusion.
After years of stasis, the application of and standards for “up to” claims are evolving. Marketers and their counsel should think carefully about the nature of the claim, the potential for consumer confusion, and insights from previous enforcement actions when determining the best way to structure responsible “up to” claims.
Amy Ralph Mudge and Randal M. Shaheen are partners in Venable’s Advertising, Marketing, and New Media practice group. They can be reached at (202) 344-4000.