_________________________: The act proscribes as "aggravated violations," warranting additional civil and commercial penalties, (a) e-mail "harvesting" or the knowing use of harvested addresses, (b) the automated creation of multiple e-mail accounts used for commercial e-mail, and (c) the use of unauthorized relays for commercial e-mail messages. -But courts began to ease this standard at about the same time that they began to increase the size of damage awards. d. adopted the principle of strict liability. that has no correct answer. National Advertising Review Board -disclaimers must be included by the FTC. A. -Maybe 3,000 C. The media can refuse to accept individual ads they find offensive or objectionable. A number of self-regulatory mechanisms have been established by the business community in an effort to control advertising practices and among them the largest and best known is the ____. D. Trademark Improvements Act B. Nevada allowing prostitution in some counties, Airline tickets having to prominently show total price, and Baltimore ordinance banning alcohol ads near children's facilities are all about ________________________. E. Corrective advertising, Under the FTC's program of ____, Novartis Corporation was required to run advertising informing consumers that it could not substantiate its claim that Doan's pills were superior to other over-the-counter analgesics in treating back pain. Therefore, it is consistent with the limits the First Amendment imposes on laws restricting commercial speech.". A. B. B. Drug companies must only submit their ads to us when they first appear in public. If the NAD and an advertiser fail to resolve an advertising controversy, either party can appeal the case to the NARB, The _____ examines advertising claims in direct-response advertising, including infomercials and home-shopping channels. A. conducting the contest or sweepstake only at the regional level and not national level. Although the agency is located Washington D.C., it had 11 regional offices throughout the nation. Voluntary agreements by advertisers to terminate a deceptive advertisement Such an agreement saves the advertiser considerable legal haste, publicity and money, all especially desirable since the advertising campaign is over or almost over. Bureau of Competition the reinstatement provision in a health insurance policy is in which of the following situations would the insurer be liable for a loss? -no interest will be charged on loan balance Deceptive advertising C. National Advertising Review Board People who work in advertising must be aware of such rules as well as all other regulations (libel, invasion of privacy, obscenity) that restrict the content and flow of printed and broadcast material. An advertiser who says that his product is the "best," "greatest," etc. C. a commercial is rejected for reasons such as sex and politics. D. U.S. Justice Department. Consent agreement Advertisers need to take special care when dealing with testimonials and endorsements. *There is an "established business relationship" (EBR) exception to the do-not-call provisions* that allows a company to call a consumer with whom it has such a relationship, even if the customer's number is on the registry. -is not available to the public -It became somewhat easier for plaintiffs to win Lanham Act false advertising suits. There was no government ban on the disclosure of the alcohol content in advertising for these brews, Justice Clarence Thomas wrote. -may raise premiums at anytime A. BBB is the largest and best known self-regulatory mechanism in United States, for controlling advertising practices, that has been established by the business community. In 2012, the FTC filed 62 actions in federal court and obtained 94 orders for redress, disgorgement of profits and permanent injunctions against individuals and businesses. C. trade allowances False. Erikson Remedies for deceptive and unfair advertising, Require Substantiation C. Consumer Protection -Guides and the Child Online Privacy Protection Act A. Corrective advertising ________________________________: All commercial e-mail messages must disclose 3 specific items of content: (a) a clear and conspicuous identification of the message as an "advertisement or solicitation," (b) a notice of "opt-out" mechanism, and (c) a "valid physical postal address." D. Electronic Retailing Self-Regulation Program Advertising which praises the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally stating no specific facts. -policy owners from misrepresentations and loss of benefits B. ad substantiation is not needed because most advertisements make very legitimate claims. Presence of superlative words in the advertisement -medical underwriting, claims payable to a disability income insured, even when the insured can continue to work, are the result of a E. Competitor Trademark Act, The _____ closed a loophole in the Lanham Act and facilitated the ease with which one company can sue a competitor for making false advertising claims about the first company's products. A. misinterpretation 4. C. Lanham What message, either explicitly or implicitly, does the ad convey? Marketing Orders are a binding regulation for the entire industry in the specified geographical area, once it is approved by the producers and the Secretary of Agriculture. B. all clients and A. Lanham Act Postal Service The NARC became involved in the self-regulation of electronic retailing when it initiated the: Injunctive power to immediately halt advertising campaigns that could cause harm to consumers C. coercion Does this message injure the plaintiff? C. puffery -beneficiaries Pr(\operatorname{Pr}(Pr( Audi after VW) =0.8Pr(=0.8 \quad \operatorname{Pr}(=0.8Pr( Ford after VW)=0.2\mathrm{VW})=0.2VW)=0.2. Complaints against advertisers are prepared by the FTC staff and approved by a vote of the commission. Uder the terms of the CAN-SPAM Act, each separate e-mail in violation of the law is subject to penalties of up to $________________, and more than one person may be held responsible for violations. B. The new law expanded the jurisdiction to practice "affecting commerce." right to transfer ownership and dividend entitlement. D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. Use the following information. D. economics, consumer protection, and competition. It is difficult for courts to reverse an FTC ruling. ______________________________________: All commercial e-mail messages must contain either a functioning return address or an Internet-based reply "opt-out" mechanism for at least 30 days after transmission of a message. Litigated orders to advertisers to terminate a particular advertising claim, failure to comply with which can result in severe penalty E. Magnuson-Moss, _____ has been legally defined as "advertising or other sales presentations which praise the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally, stating no specific facts." (b) Why is a binary predictor sometimes called a "shift variable"? -beneficiaries At this point one of three things can happen: -notify the existing insurer of the proposed replacement 1st amendment doesn't protect false/misleading ads or ads for unlawful goods/services. Again, this law provides little relief for consumers. D. uses any superlatives. C. not requiring consumers to make a purchase as a condition for entering. expression related solely to the economic interest of the speaker and its audience, or proposes a commercial transaction. III. how are survivorship life insurance policies helpful in estate planning? The Magnuson-Moss Act of 1975: E. National Association of Attorneys General, Pizza Hut launched a civil suit against Papa John's pizza claiming false and misleading advertising made Pizza Hut's pizza look inferior to Papa John's. Worked, however, some companies then decided to just merge together. The FTC alleged that when tickers went on sale February 2, 2009, for Bruce Springsteen concerts in May and June that year, Ticketmaster displayed a "No Tickets Found" message on its Web page to consumers to indicate that no tickets were available at that moment to fulfill their request. A. *To illustrate this point, Scalia noted that a person may not opt out of paying income taxes just because he or she soesn't agree with how the govenrment is spending the money. -No, it is not political speech. The endorser must be a bona fide user of the product at the time the endorsement was given and while the endorsement is aired. E. Independent Business Alliance, D. Electronic Retailing Self-Regulation Program. D. enticement The _____ made it easier for Chevron to sue Texaco for this perceived misrepresentation. The 5 members of the commission are appointed by the president and confirmed by the Senate for a term of 7 years. D. Affirmative disclosure E. Telephone Consumer Protection Act, ) The Federal Trade Commission and U.S. The origin of the Federal Trade Commission's corrective advertising program came from a deceptive advertising case involving: Federal Communications Commission (you have to scroll down to be able to see it) If the commissioners agree that the advertisement is not misleading or deceptive, the case ends. Native Advertising/sponsored posts - have come on the rise; it's important to be aware of Injunctions: E. speech governed by the First Amendment to the U.S. Constitution. A. FTC Act -shared E. Advertising guidelines, According to Federal Trade Commission policy, the criteria for determining _____ are (1) a trade practice causes substantial physical or economic injury to consumers, (2) could be reasonably avoided by consumers, and (3) it must not be outweighed by countervailing benefits to consumers or competition. The FTC considers certain categories of information to be more important than others when deciding whether a claim is material. This remedy is infrequently used. Circuit Court of Appeals held that Craiglist was protected from liability by Section 230 of the Communications Decency Act (CDA) after it posted rental ads with discriminatory statements such as "no minorities" and "no children" that violate the federal Fair Housing Act. -Corrective Advertising 2. E. Violation of trade regulation rules, B. All claims made in advertisements must be substantiated such that, before disseminating an ad, advertisers must have a reasonable basis for any and all express and/or implied product claims, with claims relating to health and safety coming under even closer FTC scrutiny that typically requires proof by competent and reliable scientific evidence. -Legally, no, it cannot. -Ads presenting endorsements by individuals who are represented, either directly or by implication, to be "actual consumers" must use actual consumers, in both the auto and video, or else they must clearly and conspicuously disclose that the people in such ads are not actual consumers of the advertised product. 3 sections of the act expanded the remedies the FTC can use against deceptive advertising. -are the only ones to involve courts Prohibits any false descriptions or representations of a brand (yours or someone else's), including words or other symbols tending falsely to describe or represent the same. Freedom to advertise Which of the following statements describes the media's role in the self-regulation of advertising? In 2004 the U.S. Court of Appeals for the 10th Circuit upheld the National Do not Call Registry in Mainstream Marketing Services, Inc. v. Federal Trade Commission. an insurance company needs to obtain personal information from a third party concerning an applicant. Voluntary compliance: *3. A television station won't advertise a sporting event that will be telecast on a competing channel. Federal Trade Commission. Corrective Advertising: This agency was responsible for putting warning labels on alcoholic beverage advertising and The advertiser can agree to sign the agreement, and the commissioners vote to accept this agreement. Independent Business Alliance 3. Food and Drug Administration B. governance, compliance, and cooperation. -custodial care permitted consumers to sue manufacturers with whom they had no contractual relationships. -insured A. Deception If this happens the order is published and made final in 60 days. C. if the ad uses puffery. after an insured gives a notice of loss, what must he/she do if the insurer does not furnish forms? -agents commission rate The law originally required consumers to re-register their numbers every 5 years to remain on the registry. C. selective retention When the FTC recovers money against a company for false or misleading advertisements, who gets to keep it? It is not uncommon that an advertisement is ___________ because of economic interests. The following are all instances in which a court can overturn an FTC ruling: (1) "convincing evidence" that the agency made an error in the proceedings, (2) no evidence to support the commission's findings, (3) violation of the Constitution-for example, the agency did not provide due process of law, (4) the action goes beyond the agency's powers; (5) facts relied on in making the ruling are not supported by sufficient evidence, and (6) arbitrary or capricious acts by the commission. b. product safety. an employee under a group insurance policy has the right to name a beneficiary and the right to convert to an individual policy in the event of employment termination, HIPAA considers which of the following as Under the ________ Act, a plaintiff can prove an ad is literally false if the test used to prove a claim for a product either is: 1) not sufficiently reliable to permit a conclusion; or 2) simply irrelevant. *Consumers, as opposed to competitors, have a much more difficult time in maintaining an action for false advertising. If they can find none, the case ends. The appellate court, however, rejected the unerinclusiveness argument, writing that "First Amendment challenges based on under inclusiveness face an uphill battle in the commercial specs context. -producer More part of the new law is that the endorsers may also be subject to liability for their statements. B. A. D. Bureau of Alcohol, Tobacco, and Firearms -insurers A. U.S. c. requiring society as a whole to choose among several actions that must be evaluated as right or wrong. C. Newspapers FTC's rules against deceptive advertising (2 components), 1) advertising must be truth and not misleading, with misleading ads sweeping up those in which relevant info is omitted, those that imply something that's not true and those in which any disclaimers are not clear and not prominent enough for reasonable consumers to see, hear, and understand them 2) all claims made in advertisements must be substantiated, such that before disseminating an ad, advertisers must have a reasonable basis for any and all express and/or implied product claims, with claims relating to health and safety coming under even closer FTC scrutiny that typically requires proof by competent and reliable scientific evidence. B. affirmative disclosure The issue of truth and deception in such ads gained both public and congressional attention in 2008 when Pfizer, Inc. canceled commercials for its Lipitor cholesterol pill that featured Robert Jarvik, an artificial heart pioneer. The 10th Circuit ruled in 2004 that the Registry did not violate First Amendment rights because the government asserted a _______ and the Registry directly advanced that interest. C) It involves underpricing products so that companies make larger sales. -commissioner's name, the new jersey life and health guaranty association protects life insurance death benefit claims up to.. FTC Tools or Remedies to Stop False Advertising: D. misrepresentation In addition to such legal action, the FTC also educates consumers and businesses to encourage informed consumer choices, compliance with the law and public understanding of the competitive process. -may never raise premiums, maria the agent would like to advertise an annuity product on a highway billboard. A. A life insurance policy sold in Louisiana can be contested by the insurer only during the first ____ years of the contract. In either case, the losing side can appeal to the federal trade commissioners for a final ruling. B. FTC Improvements Act In 2009 the FTC banned so-called robocalls (those annoying prerecorded commercial telemarketing calls to consumers) unless the telemarketing company has obtained written permission from a consumer to receive such calls. -frequency of the premium payment FTC Definition of False or Deceptive Advertising: C. U.S. Refusing to sign the agreement will result in litigation and publicity. But Congress amended the act in 1989, and now the law also prohibits an advertiser from making false claims about a competitor's product as well. There must be a representation, omission or practice that is likely to mislead or to confuse the consumer. *, *National Advertising Division (NAD)* If an advertiser refuses to comply with rulings made by the National Advertising Review Board (NARB), the NARB is most likely to: In fiscal year 2012, the FTC had more than 1,000 full-time employees and a budget of $313 million. D. Puffery C. is important to consumer and would likely have an effect on the purchase decision. Marketers only need to engage in environmental scanning if they are promoting eco-friendly or "green" products. Vision Council of America B. refer the case to an industry trade association. "individually identifiable health information" ? E. Federal Communication Reform Act. Information has also been found to be material where it concerns the purpose, efficacy or cost of the product or service. All broadcasting stations are considered to affect interstate commerce. Under this policy, express substantiation claims, such as "doctors recommend" and "specific tests prove," require the level of proof advertised. *Recently some consumer class-action lawsuits have netted huge settlements.*. E. National Association of Broadcasters, C. American Association of Advertising Agencies. All of these are included in the DTPA under trade and commerce . -terminated employee Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser." C. U. S. Postal Service Voluntary compliance If the advertiser loses this final appeal before the commissioners, he or she can appeal the litigated order in federal court. D. National Association of Attorneys General E. Central Hudson, The _____ empowered the Federal Trade Commission to regulate unfair or deceptive practices including those in advertising. Review the following transactions for Birdy Birdhouses and record any required journal entries. E. noncompetitive advertising. The FTC prohibits ___________________________, which it defines as "an alluring but insincere offer to sell a product to service which the advertiser in truth does not intend or want to sell. It's What's for Dinner" and "Got Milk?" it is basically when articles or tv programs are sponsored by companies or products or service (like how American Idol judges always drank from coke bottle or snapple bottles). This fact is not surprising when you consider that at the time the public became interested in advertising regulation-around the turn of the century-the federal government was a minuscule creature relative to its present size. The U.S. Supreme Court turned back a challenge to the appellate court's ruling, thus bringing an end (at least for the time being) to telemarketers' efforts to invoke free speech arguments to have the popular ban on unwanted phone solicitations declared unconstitutional. B. speech that promotes a commercial transaction. E. an illegal comparative advertisement. -Missouri law banned billboards about SOBs to take down these buildings Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. -home address -submit to the replacing insurer a list of the policies to be replaced The Federal Trade Commission may require affirmative disclosure if: E. the impact of cease-and-desist orders, Controversy over the FTC's authority to regulate unfair advertising practices began in 1978, when the agency relied on this mandate to formulate its controversial _____ rule restricting advertising to children. D. Most advertising cases investigated by the NAD are resolved without being sent to the NARB. E. requiring the consumer to pay a consideration. protects insured from insurance company insolvency. There was time when competition between businesses hardly existed. A. misleading omission Is this message false or misleading? Yes, as long as the disclosure requirments are reasonably related to the government's interest in preventing deception of consumers. Postal Service. C. Direct Selling Association Act. -Not too often; almost as if a newspaper has to submit a retraction Central Hudson C. Electronic Retailing Agency. E. Trade Regulation Act. B. This provision of the Lanham Act was seldom used by advertisers until the 1970s. -guaranteed insurability rider, the commissioner may Federal Trade Commission Act
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