BBB; Easy as 1-2-3 - 05/26/2015 If you advertise in North America, you should be familiar with the Better Business Bureau’s (BBB) Code of Advertising, found at If you haven’t read the Code in a while, now would be a good time for a refresher course, because the BBB recently published several changes to it. Changes to the Code were necessary, the BBB felt, in order to address the new methods advertisers use to reach consumers these days (social media, for example), and in order to address recent guidance issued by the Federal Trade Commission (FTC). Why does the BBB Code matter? Because more than 100 BBB offices in the United States and Canada monitor advertiser compliance, and because those BBB offices sometimes report non-compliant advertisers to the FTC for enforcement actions. In the Code, the BBB sets forth general principles for ethical advertising, such as: Advertisements that are untrue, misleading, deceptive, fraudulent, falsely disparaging of competitors, or include insincere offers must not be used. An advertisement as a whole may be misleading by implication, even though every sentence considered separately may be literally true. Misrepresentations can result not only from direct statements, but by omitting or obscuring a material fact. An asterisk can be used to impart additional information about a word or term that is not, in itself, inherently deceptive, but must not be used as a means of contradicting or substantially changing the meaning of any advertising statement. Information referenced by asterisks must be clearly and conspicuously disclosed. In its revisions, the BBB modified the Code’s section on testimonials and endorsements to reflect the FTC’s latest guidelines on the subject, particularly in the area of bloggers. The new Code language says that in general, advertising that employs testimonials or endorsements is likely to mislead or confuse if: It is not genuine and does not actually represent the current opinion of the endorser; The actual wording of the testimonial or endorsement has been altered in such a way as to change its overall meaning and impact; It contains representations or statements that would be misleading if made directly by the advertiser; While literally true, it creates deceptive implications; The endorser has not been a bona fide user of the endorsed product or service at the time the endorsement was made, and the advertiser represents that the endorser uses the product or service; The endorser has a financial interest in the company whose product or service is endorsed, and this is not made known in the advertisement; The advertiser represents, directly or by implication, that the endorser is an actual consumer when this is not the case, and the advertisement fails to clearly and conspicuously disclose that fact; The consumer experience represented in an ad is not the typical experience of those using the product or service, unless the advertisement clearly and conspicuously discloses what the expected results will be; Endorsements placed by advertisers in online blogs or on other third-party websites do not clearly and conspicuously disclose the connection to the advertiser and comply with the other provisions in the Code; and Advertisers compensate consumers for leaving feedback on third-party online blogs or websites, but fail to ensure that consumers disclose such facts on those blogs or websites. The BBB also added new language governing continuity programs. The BBB Code now says that any advertisement for a product or service that includes an offer to sell or provide consumers with additional goods or services under a negative option feature must include a clear and conspicuous disclosure of all material terms of the negative option arrangement. Such material terms include: The existence of the negative option feature; The cost of additional goods or services; How consumers can cancel and avoid future shipments and charges; and How consumers can return items they do not want. Advertisers must not interpret the consumer’s silence, failure to take an affirmative action to reject the goods or services, or failure to cancel the agreement as consent to enroll the consumer in the negative option feature. Instead, they must ensure that the consumer consents affirmatively online, over the phone, or in person to the negative option feature before enrolling the consumer in the plan. Advertisers should also avoid making disclosures that are vague, unnecessarily long, or that include contradictory language. It’s the advertisers responsibility to ensure that disclosures are noticed and understood by consumers. In some cases, the Code refers advertisers to specific guidelines or policies of the FTC, with links to the FTC’s website. For example, where disclosures are required to prevent an advertisement from being misleading, the disclosure must be clear and conspicuous. The FTC provides guidance on making disclosures in traditional media and online at It’s the advertiser’s responsibility to ensure that disclosures are noticed and understood by consumers. When it comes to legal review, of course, the devil is in the details. In many cases, it won’t be easy to figure out how these general principles should be applied in a particular situation. What works as a "clear and conspicuous” disclosure in one context may not work in another. Ads vary. That’s why consulting qualified legal counsel is so important before disseminating an ad. The same goes for cooperating with any self-regulatory review that may occur after an ad has been made public. The BBB administers several self-regulatory programs, including the Electronic Retailing Self-Regulation Program (ERSP) on behalf of ERA. If ERSP or another BBB self-regulatory program reaches out to an advertiser to ask for substantiation or request changes, it is usually in the advertiser’s best interest to comply with the request. Self-regulation can provide an early warning sign that enables an advertiser to make a course correction midstream, and avoid more serious legal action. For this reason, among others, ERA created the ERSP program. The BBB Code of Advertising is part and parcel in this; follow its principles, and you will lower your legal risk. Gregory J. Sater is a partner in the advertising, marketing, and new media practice at Venable LLP and chairman-elect of ERA. Sater can be contacted at (310-229-0377) or via email at

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