WebUnder the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. Consent agreement *In addition to the federal CAN-SPAM Act, some states have their own statutes targeting such e-mails.*. -terminated employee In addition, the FTC made it clear that the "opt-out" mechanism, used by a commercial sender cannot require a recipient to take any steps other than sending a reply e-mail message or visiting a single Internet Web page to opt out of receiving future e-mail from that sender. CAN-SPAM Act -CAN-SPAM Act C. National Advertising Review Board 3. *2. A. commercial speech. -presumtive disability "The commission generally will not bring advertising cases based on subjective claims (taste, feel, appearance, smell)," according to the guidelines. D. Most media accept any advertising they receive since advertising is their major source of revenue. E. The four major television networks. ) * The law outlaws bait-and-swithc advertising, in which customers are lured to a store with promises of low prices but then are pushed by salespeople to buy more expensive products. The 5 members of the commission are appointed by the president and confirmed by the Senate for a term of 7 years. C. Wheeler Lea Amendment to the FTC Act No. -1200 employees Endorsement of a product by an unqualified spokesperson or by a spokesperson who doesn't use the product. Admisnitrative law judges can hold hearings, which are somewhat like trials, to determine whether the FTC charges are valid. D. a commercial is approved at the storyboard stage but then is rejected after it is produced. B. implied uniqueness The good news for consumers is that they sometimes get part of their money back. Also, advertising aimed at a special vocational group, such as physicians, will be evaluated from the perspective of a reasonable member of that group. In addition, many local governments have consumed,er protection laws that apply broadly to false advertising. More part of the new law is that the endorsers may also be subject to liability for their statements. A chairperson, one of the 5 commissioners, is appointed by the president. A. B. FTC Improvements Act -Litigated orders 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. In summary, competitor-versus-competitor lawsuits are now common. B. A. Claims about durability, performance, warranties or quality have also been consider material. It applies to "commercial electronic mail messages" that have as their "primary purpose" the "commercial advertisement or promotion of a commercial product or service." In fact, the only lawful sales robocalls are ones where consumers have stated in writing that they want to receive them from the company in question. The act or practice must be considered from the perspective of a consumer who is acting reasonably. In response to a request from the Institute for Public Representation for such a policy statement, the FTC said corrective advertising may be applied: "If a deceptive advertisement has played a substantial role in creating or reinforcing in the public's mind a false and material belief which lives on after the false advertising ceases, there is clear and continuing injury to competition, and to the consuming public as consumers continue to make purchasing decisions based on the false belief." 8. A. An entire industry can be treated similarly, and just one or two businesses are not picked out for complaint. If the judge believes that there is substantial evidence that the advertisement violates the law, he or she will issue an order telling the advertiser to stop this illegal practice (this is the litigated order). d. adopted the principle of strict liability. Injunctions: 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." B. Wheeler Lea E. The Tobacco Institute, The ____ has been heavily involved in the regulation of advertising of prescription drugs. C. there has been material injury to reasonable consumers. E. materiality, Under which of the following FTC programs might a firm be required to have product information verifying the veracity of its advertising claims before making any advertising claims about the product? -subrogation. D. Trademark Revision Act of 1988 -human resource department -The size of damage awards skyrocketed. This is known as: Craigslist, in contrast, did not solicit any content but me merely provided a forum for ads. B. speech that promotes a commercial transaction. A variety of federal agencies are empowered to enforce consumer protection laws. C. Direct Selling Association Act. -person's hire date The FTC does not attempt to scrutinize every advertisement that is published or broadcast. The new law permits state and local governments to: Two divisions of the Better Business Bureau's National Advertising Review Council that provide advice to advertisers: reviews national advertising for truthfulness and accuracy, and it provides a form of alternative dispute resolution for companies that is cheaper than litigation, evaluates child-directed advertising and promotional material in all media to advance truthfulness, accuracy, and consistency with its "Self-Regulatory Guidelines for Children's Advertising" and relevant laws, a variety of federal agencies are empowered to enforce consumer protection laws; FTC and FDA, the primary agent of the govt; nearly 100 years old; it polices unfair methods of business competition and protects consumers from deceptive advertising, responsible for protecting public health and ensuring that products like cosmetics, drugs and food are honestly and accurately represented to the public. In concluding that the registry did not violate the First Amendment free speech rights of telemarketers, the appellate court applied the commercial speech doctrine and Central Hudson test. funding for medicare part B is partially provided by which of the following is NOT a duty of the Commissioner? Bait-and-switch advertising. Incorrectly implying that an endorser uses and advocates a brand. The FTC program that requires an advertiser who is found guilty of false or misleading advertising claims to run ads to rectify the situation is known as: WebLaws must be static and unyielding in order to provide stability for a society. B. affirmative disclosure If a participant is required to give up something of value in order to participate in a game or sweepstakes, then _____ is present, and the promotion is considered a lottery. A. within one month of the appearance of the ad. Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. -partially insured *In a nutshell, the FTC's rules against deceptive advertising break down into 2 critical components:* Advertisers need to take special care when dealing with testimonials and endorsements. It defines an endorsement as any advertising message (including things such as verbal statements, demonstrations and depictions of the name of an individual or the name or seal of an organization) that consumers likely are to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser. C. regulation, restriction, and reconstruction. The advertiser can refuse to sign the agreement. The _____ made it easier for Chevron to sue Texaco for this perceived misrepresentation. D. FDA Act D. economics, consumer protection, and competition, Which division of the Federal Trade Commission would deal with antitrust and consumer protection investigations? -47% of the time people can't tell it is native advertising Which of the following statements is true about National Advertising Review Council (NARC)? Parramore Corp has 12 million dollars of sales, 3 million dollars of inventories, 3.25 million dollars of receivables, and 1.25 million dollars of payables. A. unsolicited order B. A. Wheeler-Lea Amendment Advertisers can still litigate the question, challenge the trade regulation rue, seek an appeal in court and so forth. WebProposed insured. Advertising which praises the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally stating no specific facts. * One commissioner is chosen by the president to be the chairman of the FTC. *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. 1. WebAdvertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. A. Postal Service -3 & 0 Postal Service Which of the following statements describes the NAD/NARB review process? Making a claim without substantiation. It is very difficult for non competitors to gain standing to sue for false advertising under the Landham Act. C. refer the matter to an appropriate government agency. States have what are called unfair and deceptive acts and practice statutes which give consumers the right to seek a judicial remedy in false advertising cases. To be considered commercial speech, it only has to meet 1 of the 3 questions. The agency has never outlined a hard-and-fast policy regarding when corrective advertising will be used. Substantiation: 6. an amount the premium would have purchased at the correct age. Federal Communications Commission Similarly, an advertiser cannot correct a misrepresentation in an advertisement with point-of-sale information. The advertiser may appeal this decision in a federal court. Nor were there limits on the words a brewer could use to describe these products. Freedom to advertise The FTC can seek an injunction to stop advertisements that it believed violated the law. B. all clients and It held that an online roommate-matching service was not immune to liability under Section 230 of the CDA for posting information by others that violated the Fair Housing Act and California housing discrimination laws. b. that harms the environment. They speed up and simplify the process of enforcement. If Parramore could lower its inventories and receivables by 10 percent each and increase its payables by 10 percent, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits? Litigated Order: Misinterpretation Injunctions Worked, however, some companies then decided to just merge together. A. both an encoding and a decoding tool for communications. The law is not designed to protect the foolish or the "feeble minded," the commission has noted. The _____ is a major trade association of the advertising business in the United States. A. are used to regulate public service announcements. An appeal of an adverse ruling by a circuit court can be taken to the Supreme Court, but only if certiorari is granted. What's more, the FTC made sure in 2012 that more than 477,000 consumers received monetary redress totaling $26.8 million. -estoppel 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. D. any advertising on a broadcast media. Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims: c. requiring society as a whole to choose among several actions that must be evaluated as right or wrong. WebA) It is effective in situations in which competitors are able to undercut prices easily. c. permitted consumers to sue the retailer from whom they had purchased the product. -arbitrate claims If an advertiser refuses to sign a consent order, the inquiry is handed to the U.S. Department of Justice. It's What's for Dinner" and "Got Milk?" Advertising *substantiation* has been an important part of the FTC regulatory scheme since 1972. -company's true corporate name A. Is it a violation of the First Amendment for a newspaper, magazine or broadcasting station to refuse to carry an ad? To address the negative aspects of spam, Congress passed and President George W. Bush signed into law in 2003 the __________________. Three major divisions of the Federal Trade Commission are the Bureaus of: The division of Broadcasting This agency was responsible for putting warning labels on alcoholic beverage advertising and Vision Council of America Television advertising: B. creative boutiques, copywriters, and consumers. The FTC enforces rules regarding endorsements of products and services by consumers, celebrities, experts and organizations. B. There has also been a rapid increase in lawsuits brought by advertisers against one another under Section 43(a) of the Lanham Act. Freud defined the healthy adult as one A. Department of Justice (DOJ) E. injunction. -insurance prospectors hire and fire management and select and appoint a chief executive. B. The most commonly used FTC remedy is the consent agreement, or _____________________________. WebThe Telephone Disclosure and Dispute Resolution Act of 1992 requires FTC to promulgate regulations concerning advertising for, operation of, and billing and collection procedures for, pay-per-call or "900 number" telephone services.The regulations must include certain provisions, such as price disclosure requirements, mandatory warnings on services D. Regulations developed by a consortium of trade associations B. Lanham Tags: Question 34 . C. refer the matter to an appropriate government agency. E. speech governed by the First Amendment to the U.S. Constitution. & 1125, provides that a person who generates "any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, whichin commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or another person's goods, services, or commercial activities" is liable for civil damages. B. Federal Trade Commission. The new law expanded the jurisdiction to practice "affecting commerce." -On top of this, the judge can double or triple the damage award in cases of especially flagrant falsity. Local radio -offer the insured a 60 day free look period, submit to the replacing insurer a list of the policies to be replaced. which of the following is CORRECT regarding the death benefit amount? Refusing to sign the agreement will result in litigation and publicity. Webadvertising regulations exist in order to? There Falsely implying that a benefit is needed. Its cost of goods sold is 75 percent of sales, and it finances working capital with bank loans at an 8 percent rate. 3. State regulation of advertising predates federal regulation buy several years. c. secured -No, it is not political speech. What happens to an advertiser who signs a consent decree, then violates the provisions of the decree? An investigation into the lengths of celery sticks grown in a certain US state. A. previous advertising has led to the formation of false beliefs about a product. -no interest will be charged on loan balance -Missouri law banned billboards about SOBs to take down these buildings Since that time the commission has developed into one of the nation's largest independent regulatory agencies. Such regulation is geared toward satisfying the interests of advertisers rather than consumers, however. *Qualifying disclosures must be legible and understandable, the FTC has ruled. C. Bureau of Alcohol, Tobacco and Firearms B. *National Advertising Review Board (NARB)*. The advertiser can agree to sign the agreement, but the commissioners reject it. WebMarketers should monitor developments outside a firm's control in order to detect and respond to threats and opportunities. E. fraud, Which of the following is one of the two of the factors the FTC considers in evaluating an ad for deception? C. is important to consumer and would likely have an effect on the purchase decision. In the past, after the commission issued a cease and desist order, businesses frequently attempted to undertake practices that fell just outside the narrow boundaries of the order. * Trade Regulations Rules: Information has also been found to be material where it concerns the purpose, efficacy or cost of the product or service. Alcohol Advertising Laws The First Amendment allows for a lot of freedom of speech in general and therefore limits how much the federal government can regulate advertising, even in regard to alcohol. -keep replacement records on file for at least 10 years Federal Communications Commission. -shared -incontestable period In doing this, the advertiser makes no admission and the agency no determination that the claim is deceptive. C. Comparative advertising E. advertising substantiation. -$400,000 The plaintiffs thus alleged a violation of their First Amendment right not to be compelled to fund speech-an unenumerated right to remain silent, as it were-with which they disagreed. The _____________________________ is why commercial speech gets First Amendment protection (in chapter 2), ____________________ in _______ - made it a misdemeanor for a publication for advertising for an abortion (a weekly magazine gave a doctor's name to schedule an abortion A. 4. A. The signing of a consent order is an admission of guilt by the advertiser. In 1977, the _____ ruled that restrictions on advertising by lawyers are unconstitutional and that they have a First Amendment right to advertise. Under the corrective advertising scheme, the FTC forces the advertiser to inform the public that in the past it has not been honest or has been misleading. Advertising Practices found to be unfair or deceptive 3. D. is more stringently self-regulated than any other medium. FTC's means to police deceptive advertising, Guides and the Child Online Privacy Protection Act E. Information Technology Act. to address the negative aspects of spam, Congress and Bush signed into this law; it applies to the commercial electronic mail messages that have as their primary purpose the commercial advertisement or promotion of a commercial product or service, false/misleading messages, function return addresses and opt-out mechanism, 10 day prohibition period, disclosure requirements, aggravated violations, functioning return addresses/opt out mechanism. If the advertising campaign is successful and long running, a residue of misleading information remains in the mind of the public after the offensive advertisements have been removed. Presence of superlative words in the advertisement C. Most FTC inquiries are settled by consent order. ) E. Puffery is only illegal if it eliminates a competitive advantage. -person's employment history Federal Trade Commission's (FTC's) _____ program required advertisers to have supporting documentation for their claims and to prove the claims are truthful. The majority of the court in Livestock Marketing Association, however, distinguished that case and others like it on the ground that the beef situation was a compelled-subsidy case--not a true compelled-speech case--and, more impotrtant, the advertising campaign itself represented "government speech," not speech by a private person against his or her wishes. E. Substantiation, The _____ is the government agency that has authority over the labeling, packaging, branding, ingredient listing and advertising of packaged foods and drug products. The substantiation does not have to be in the ad itself. E. are issued by the National Association of Attorneys General. Advertising must be truthful and not misleading, with misleading ads sweeping up those in which relevant information is omitted, those that imply something that's not true and those in which any disclaimers or disclosures are not clear and not prominent enough for reasonable consumers to see, hear and understand them. 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. Association of National Advertisers. The hearing is a lot like a trial, only more informal. B. if the ad does not provide sufficient information to the consumers so as to make an informed decision. The Federal Trade Commission has the power to regulate virtually all advertising that is deceptive or misleading. E. Federal Trade Commission (FTC). was not protected by the first amendment until 1975, The Supreme Court held that commercial advertising receives a degree of First Amendment protection; Supreme Court, ""The relationship of speech to the marketplace of products or of services does not make it valueless to the marketplace of ideas. C. contradictory option -producer The telemarketers, however, argued that the exemptions for political and charitable calls made this state "under inclusive"--that to effectively serve the interests of protecting privacy and preventing fraud, the registry should also apply to political and charitable solicitations, not just to commercial sales calls. A. A. misinterpretation In the past the FTC would have to issue a complaint against each advertiser and in each case prove that the statement rule that declares that claims of product superiority based on excessive dosage of vitamins and minerals are false and misleading. The high court has granted states fairly extensive authority to regulate advertising for professional services by individuals like doctors, lawyers, dentists and others. ________________________________: 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." American advertising is regulated by laws adopted by all levels of government. Does this message injure the plaintiff? C. a cease-and-desist order. _______________________: Commercial e-mail messages that include "materially false or misleading" header information or deceptive subject lines are prohibited. 2. is false or misleading, promotes unlawful goods or services, or is discriminatory on the basis of race. Voluntary compliance Advertisers claimed the Registry violated their First Amendment rights to free speech. With the rapid growth of comparative advertising (in which the advertised product is compared to a competitor's product), more and more advertisers have taken competitors to court over what they claim is deceptive and false advertising. In other words, the Livestock Marketing Association and the other plaintiff in the case objected to the fact that they were compelled to subsidized speech-the generic beef advertising campaign-to which they objected. By July 2012, the FTC had brought a dozen enforcement cases targeting illegal robocalls, with violators paying $5.6 million in total fines. 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. In 2007, the FTC requested public comment on its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," and proposed several minor revisions to its guides, including, among others, clarification that when determining whether statements in an ad constitute an endorsement, it does not matter whether the statements made by an endorser are identical to or different from those made by the sponsoring advertiser. Ads that promote illegal goods and services, that contain claims that appear to be deceptive or are not substantiated, or that unfairly trash a competitor's products might also be ___________. -former depended of employee no longer of dependent status If a case is not resolved to its satisfaction, the NARB has the power to order an advertiser to stop running its ads. D. enticement in this situation, the treasurer may be found guilty of which of the following? B. puffery has detrimental effect on consumers' purchase decisions. which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? There was time when competition between businesses hardly existed. E. advertisers, government, and the television networks. -Not too often; almost as if a newspaper has to submit a retraction Litigated orders to advertisers to terminate a particular advertising claim, failure to comply with which can result in severe penalty -protection of proceeds against the insured's and the beneficiary's creditors *Recently some consumer class-action lawsuits have netted huge settlements.*. Cease-and-desist orders: E. puffery, unethical. -fully insured E. Clayton Antitrust. Under the Reagan administration, the controversial _____ Doctrine, which required broadcasters to provide time for opposing viewpoints on important issues, was repealed on the grounds that it was counterproductive. A. C. FCC Act This remedy is infrequently used. D. comparative advertising. There must be a representation, omission or practice that is likely to mislead or to confuse the consumer. A. the fairness doctrine. ", courts have developed this to articulate just how much first amendment protection advertising receives and the criteria the government must satisfy to permissibly regulate it, false or misleading advertising, as well as advertising about unlawful foods or services, receives, truthful and non-misleading advertising about lawful goods and services receives an __________ _______ of first amendment protection.
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