According to the Mad Men stereotype, you can spot an old-school agency executive by the tailored wardrobe and expense-account lunch. A lot has changed in the advertising game, but two truths remain: (1) After more than 50 years of FTC precedent, ad agencies may be liable for their roles in deceptive campaigns; and (2) companies that might not describe themselves as ad agencies may still be held responsible for illegal acts or practices. In other words, the FTC looks to the facts, not the gray flannel suits.
That’s one of the messages behind settlements reached by the FTC and Maine’s attorney general with companies and individuals that played prominent roles in the promotion of the cognition supplement CogniPrin and a pain relief product called FlexiPrin. In February 2017, the FTC and the Maine attorney general’s office announced settlements with two companies and four individuals for making misleading claims about the products and for committing other violations of federal and state consumer protection law. The second round of settlements put an end to the litigation, but DR marketers may want to pay attention to the roles the defendants played in the promotions.
According to the FTC, a New Jersey-based business that describes itself as a “creative thinktank and TV/radio/print production company” produced 30-minute radio ads for CogniPrin and FlexiPrin that were formatted misleadingly to sound like educational talk shows; the host of these “programs” was the CEO of the company. In addition to challenging a number of underlying health claims as deceptive, the lawsuit alleged that the ads featured purported experts who provided endorsements without exercising their supposed expertise.
The company and the CEO also created inbound call scripts that the FTC and the Maine attorney general said deceptively claimed that consumers could try the supplements “risk-free” with a money-back guarantee, without clearly disclosing that substantial strings were attached. The FTC complaint further alleged that the ads didn’t clearly tell consumers they would have to enroll in an auto-ship continuity plan to qualify for that “risk-free” offer.
The FTC and the Maine attorney general also announced a settlement with an endorser they allege was falsely presented in the ads as an objective medical expert. According to the complaint, he provided his endorsement without appropriately examining the products or exercising his purported expertise. The defendants also didn’t mention that he was paid a percentage of FlexiPrin and CogniPrin sales—a material connection under the FTC’s Endorsement Guides that should have been disclosed.
It’s fine for creatives to be creative. But you’re still under an obligation to be scrupulously accurate about the claims ads convey.
The big-picture point for modern-day “Mad” men and women involved in direct response is the breadth of potential liability under the FTC Act. Conscientious marketers don’t create questionable claims or engage in deceptive business practices, and they don’t look the other way when others involved in a promotion engage in iffy conduct. Whether you think of yourself as an agency executive or something else, the FTC will evaluate the facts—not the title.
Furthermore, when it comes to crafting ad copy, it’s fine for creatives to be creative. But you’re still under an obligation to be scrupulously accurate about the claims ads convey to consumers and the science that supports those representations. And if an ad features an “expert” endorsement, the endorser’s opinion must be based on an examination or testing of the product at least as extensive as an expert in the field would normally conduct to support such conclusions.
Both the CEO and the endorser were held individually liable for their roles in the promotions. That should give any businessperson pause before assuming that truth in advertising is someone else’s responsibility.