which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? The degree of substantiation that will be deemed reasonable varies with "the type of claim, the product, the consequences of a false claim,, the benefits of a truthful claim, the cost of developing substantiationand the amount of substantiation experts in the field believe is reasonable," the policy statement said. 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. Since advertising campaigns are ephemeral , the FTC often has difficulty in catching up with the advertiser before the short-lived campaign has been replaced with something else. *Functioning Return Address and Opt-Out Mechanism* Quizlet The government's interest in reducing the amount of alcohol consumed by young people is a laudable goal, a unanimous Supreme Court said, but added that there is really no evidence this rule advances the goal. 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 order is published and made final in 60 days. Food and Drug Administration Advertising -partially insured The substantiation does not have to be in the ad itself. 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. D. Federal Trade Commission As a general rule, the First Amendment does not require that the government regulate all aspects of a problem before it can make progress on any front." an accident and health insurer just received written proof of loss from one of its insureds. B. C. affirmative disclosures 57a, empowers the Commission to promulgate trade regulation rules with the force and effect of law that "define with specificity" acts or practices that the Commission finds, based on substantial evidence in the rulemaking record, are prevalent and are unfair or deceptive. A. Puffery is illegal. C. not require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. The FTC, with the help of the Department of Justice, actively enforces the do-not-call rules. The good news for consumers is that they sometimes get part of their money back. Subjective statements of opinion about a product's quality 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. 2. c. competence. -1200 employees E. Affirmative disclosure. -former depended of employee no longer of dependent status Deceptive advertising Information has also been found to be material where it concerns the purpose, efficacy or cost of the product or service. These claims can be viewed as deceptive under the FTC's requirement of: In 1995, the Federal Trade Commission issued a complaint against the manufacturers of New Balance and Saucony athletic shoes based on their "Made in the USA" advertising claims. An advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. E. a commercial is rejected at the idea generation stage. A licensed producer MUST be __________ by an insurer to be -commissioner's name, the new jersey life and health guaranty association protects life insurance death benefit claims up to.. E. fraud, Which of the following is one of the two of the factors the FTC considers in evaluating an ad for deception? Solve the present value formula (5) for nnn. The Federal Trade Commission takes the position that: Bureau of Economics C. Godiva claims that it makes the finest chocolates in the world. Better Business Bureau To address the negative aspects of spam, Congress passed and President George W. Bush signed into law in 2003 the __________________. WebStudy with Quizlet and memorize flashcards containing terms like Any administrative action taken against a producer MUST be reported to the director within ___ days after the final disposition., How many days notice does the Affordable Care Act require insurers to give before rescinding coverage?, According to the Affordable Care Act, new health Insurance Advertising claims that significantly involve health and safety are usually presumed to be material. 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. A. D. affirmative disclosure order -Lawyers are only allowed to state past facts, they can't promise future things This the First mendment plainly permits." B. Endorsements must reflect honest opinions, findings, beliefs or experiences of the endorser. B. Trading stamps, contests, freebies, premiums and even product labels are included in this definition, in addition to the more common categories of product and service advertising. 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. *Attorneys for the FTC can seek these restraining orders in federal court. C. consumers recognize puffery and don't believe it. There is a "reasonable fit" means "narrowly tailored" WebStudy with Quizlet and memorize flashcards containing terms like Advertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of C. Consumer Protection 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). D. Food and Drug Administration FTC's means to police deceptive advertising, Guides and the Child Online Privacy Protection Act B. a commercial that was rejected at the storyboard stage is accepted at the final stage. D. corrective advertising. NAD recommended that Gillette stop using "MoistureRich" in both the product name and as a descriptor when used in isolation in phrases such as "Treat Your Skin to MoistureRich." D. Robinson Patman Act 17. 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. C. Robinson Patman Act C. Lanham Act Staff attorneys at the FTC will issue a complaint against the advertiser, and a hearing will be held before an administrative law judge. C. there has been material injury to reasonable consumers. Federal Communications Commission E. National Association of Attorneys General, C. Bureau of Alcohol, Tobacco and Firearms, The _____ is a government regulation that is increasingly being used by companies to sue competitors for false or misleading advertising claims. A. C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. -Advertisers cannot engage in practices that discourage purchase of advertised merchandise as part of a bait scheme to sell other merchandise, such as refusing to show or sell the product offered in accordance with the terms of the offer. Federal Trade Commission The use of mock-ups and props to demonstrate visually a quality that is material to the sale of a product. 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. The advertiser is not responsible for every interpretation or behavior by a consumer. -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. B. offer only merchandise and no cash as part of the sweepstakes prizes. Determining what constitutes commercial speech, however, is not easy. Under the Wheeler-Lea Amendment, the Federal Trade Commission is empowered to stop an advertiser from making a specified claim within 30 days and refrain from doing so until a hearing is held. B. injunctive power. -company's true corporate name 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. demonstrate full and truthful disclosures to the public. Almost everyone who uses electronic mail has received unsolicited commercial advertising known as "spam." 3. If a case is not resolved to its satisfaction, the NARB has the power to order an advertiser to stop running its ads. E. speech governed by the First Amendment to the U.S. Constitution. D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. The _____ is a major trade association of the advertising business in the United States. Trade Regulation Rules: A. Magnuson-Moss Act of 1975 D. advertising substantiation Voluntary compliance -guaranteed insurability rider, the commissioner may D. Internet -If an ad represents that an endorser uses the product, then the endorser must have been a bona fide user of it at the time the endorsement was given and, in addition, the advertiser may continue to run the ad only so long as it has good reason to believe that the endorser remains a user of this product. If the advertiser loses this final appeal before the commissioners, he or she can appeal the litigated order in federal court. D. Television is the most carefully scrutinized of all forms of advertising. B. refer the case to an industry trade association. Advertisers need to take special care when dealing with testimonials and endorsements. E. Consumer Protection Act, The _____ gave the FTC the power to issue cease-and-desist orders and levy fines on violators. C. National Advertising Review Board B. B. Also, advertising aimed at a special vocational group, such as physicians, will be evaluated from the perspective of a reasonable member of that group. US Postal Service (USPS) Responsible for regulating direct mail advertising and John Oliver video on Native Advertising: B. advertising on children's programs is limited to 12 minutes per hour on weekdays and 10.5 minutes per hour on weekends. The burden is on the government to disprove the advertiser's claim. E. avoid questionable advocacy advertising. C. Cease-and-Desist C. Bureau of Alcohol, Tobacco and Firearms Similarly, an advertiser cannot correct a misrepresentation in an advertisement with point-of-sale information. the policy may be paid up early by using policy dividends. A. unsolicited order WebA) It is effective in situations in which competitors are able to undercut prices easily. The law is not designed to protect the foolish or the "feeble minded," the commission has noted. WebAdvertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. In 2008 legislation was signed under which numbers placed on the list remain on it permanently unless consumers specifically request a number's removal by calling 1-800-382-1222. Laws must be static and unyielding in order to provide stability for a society. Consent agreements or consent orders signed by advertisers promising to terminate a deceptive advertsiement When a complaint is received, FTC staff attorneys examine it to see if it has merit. D. impose a fine. Presence of superlative words in the advertisement Consent Agreement: It is difficult for courts to reverse an FTC ruling. -terminated employee C. consumers recognize puffery and don't believe it. There are 2 key divisions of the Better Business Bureau's Advertising Self-Regulatory Council (ASRC), which was known until April 2012 as the National Advertising Review Council, that provide both advice to advertisers and out-of-court methods for resolving disputes about advertisements. Guides and the Child Online Privacy : A. misinterpretation In particular, several telemarketing agencies filed lawsuits in 2003 against the FTC, alleging that it was beyond the scope of the FTC's jurisdiction to adopt the National Do Not Call Registry and claiming that the registry violated the First Amendment right of free speech of advertisers who use telemarketing. The _____ regulates and controls the advertising of alcoholic beverages. Federal Communications Commission Corrective Advertising Fact Sheet 5 Tobacco Product Marketing Restrictions - Public -does not include political calls or spam artists B. C. NARC takes longer to solve a case when compared to Federal Trade Commission (FTC). Advertising *substantiation* has been an important part of the FTC regulatory scheme since 1972. D. enticement _____________________________ (______): This agency describes itself as the children's arm of the advertising industry's self-regulation program, and it 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. Vision Council of America By July 2012, the FTC had brought a dozen enforcement cases targeting illegal robocalls, with violators paying $5.6 million in total fines. B. ad substantiation is not needed because most advertisements make very legitimate claims. Another angle that advertisers can pursue is to attack a different aspect go the government's case rather than try to prove the statement true. Advertising on television and radio was regulated for many years through codes developed by the _____ until the courts found some of its regulations served to restrain trade. -Substantiation B. superiority advocacy. Injunctions C. Lanham B. A. Today, an individual can file a complaint online from the FTC's website. SUMMARY: All commercial e-mail "that includes sexually oriented material" must also include a warning label on the subject line. -net death benefit will be reduced if the loan is not repaid E. Trade Regulation Bureau, Which of the following divisions of the Federal Trade Commission protects consumers from deceptive and unsubstantiated advertising and enforces the provisions of the FTC Act that forbid misrepresentation, unfairness, and deception in general advertising at the national and regional level? the death benefit paid will be what the premium would have been purchased at the correct age, a 10% excise tax is normally applied to an early withdrawal from an IRA. A. are used to regulate public service announcements. D. affirmative disclosure The 3rd section of the law gave the FTC the right to sue in federal court on behalf of consumers victimized by practices that are in violation of a cease and desist order or by practices that are in violation of a TRR, a right that the agency has been reluctant to use. D. Affirmative disclosure C. Bureau of Alcohol, Tobacco and Firearms Importantly today, the FTC's prohibition against unfair or deceptive advertising and fraudulent marketing in any medium includes the Internet. The law also gave the agency important new power. B. Regulations WebAdvertising is not equally productive for firms in every market type. all commercial e-mails must disclose a) it is an advertisement or solicitation, b) an opt-out mechanism, and c) a "valid physical postal address.". The court addded that the rule imposes "no burden on speech other than requiring airlines to disclose the total price consumers will have to pay. What's more, the FTC made sure in 2012 that more than 477,000 consumers received monetary redress totaling $26.8 million. -Interstate commerce - anything that involves commerce between 2 states D. Most media accept any advertising they receive since advertising is their major source of revenue. A. Postal Service C. Robinson Patman Act C. Campbell Soup. Self Regulation by the Advertising Industry, Local Regulation and Better Business Bureau. C. affirmative disclosure which of the following must be included in the ad? E. Puffery is only illegal if it eliminates a competitive advantage. One of the most pervasive and annoying forms of advertising today is on the ________________. If either of the last two events occur, a complaint is issued against the advertiser and a hearing is scheduled before an administrative law judge. A. Ads can't be unfair, meaning the advertisement can't cause substantial injury to consumers that consumers E. dealt with consumers' rights regarding product warranties. an amount the premium would have purchased at the correct age. B. affirmative disclosure A. In brief, the majority of the court concluded that the beef advertising is the government's own speech and, as such, does not raise First Amendment problems. A. unfairness Congress decided a special agency was needed to stop unfair business practices. A material misrepresentation or practice is one that is likely to affect a consumer's choice of a product. Between 1946 and 1968 the courts heard fewer than 30 false advertising cases. If this happens the order is published and made final in 60 days. An investigation into the lengths of celery sticks grown in a certain US state. Implied uniqueness E. the FCC is granted the right to fine advertisers who exceeded advertising limits as defined by the act. When the FTC recovers money against a company for false or misleading advertisements, who gets to keep it? 5. A. the fairness doctrine. A. FTC Act * A. enhance the credibility of the publication. The FTC believes that the claim is deceptive. 4. As with the structure of the Federal Communications Commission described in Chapter 16, no more than 3 of the 5 commissioners can be from the same political party. All of these are included in the DTPA under trade and commerce . E. are issued by the National Association of Attorneys General. An entire industry can be treated similarly, and just one or two businesses are not picked out for complaint. -Guides and the Child Online Privacy Protection Act To implement this provision, the FTC in 2004 adopted a rule requiring spammers who send sexually oriented material to include the warning "SEXUALLY-EXPLICIT:" in the e-mail subject line or face fines for violations of federal law. The regulation of deceptive or untruthful advertising is a large and difficult task policed by the advertising industry itself, the mass media and various governmental agencies. E. the advertising relies on the use of puffery to make its point. The advertiser can agree to sign the agreement, and the commissioners vote to accept this agreement. But if time is the greatest enemy, publicity is the FTC's strongest ally. -guaranteed benefit *Accurate information in the text may not remedy a false headline. C. FCC Act The FTC enforces rules regarding endorsements of products and services by consumers, celebrities, experts and organizations. D. Electronic Retailing Self-Regulation Program (ERSP).