4. Laws banning false advertising exist at both the state and local levels, but tend to be applied half-heartedly. Privacy on the internet-in particular, companies and advertisers tracking and monitoring the Web sites consumers visit-is now a major concern of the FTC. *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. E. corrective advertising, The _____ is a federal agency that was founded in 1934 to regulate broadcast communication that include the radio, television, telephone and telegraph industries. 2. Sometimes the misleading statements are minor errors, but other timed they represent a major attempt at deception. Which of the following statements concerning advertising by attorneys is true? Vision Council of America *10-Day Prohibition Period* Commercial speech is most accurately defined as: The advertiser is simply asked to prove the claims are truthful.The substantiation process today involves panels of experts who scrutinize advertisements and target for documentation those claims that seem most suspect. This is an example of: 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. 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. The _____ is a major trade association of the advertising business in the United States. SURVEY . When the FTC recovers money against a company for false or misleading advertisements, who gets to keep it? Litigated orders to advertisers to terminate a particular advertising claim, failure to comply with which can result in severe penalty c. competence. In addition, political robocalls--a major source of annoyance for many during the 2012 election year--and robocalls from charities seeking donations are permissible. B. E. lodge a class action suit for customers who have been in some way negatively affected by the ad. demonstrate full and truthful disclosures to the public. -split hire and fire management and select and appoint a chief executive. this false statement is considered -an advertiser has already put out a campaign and the FTC finds out later; most common E. Network standards have become more stringent in response to competition from independent and cable stations. * 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. E. advertising substantiation. Drug companies must only submit their ads to us when they first appear in public. -short-term disability -person's net income Is this message false or misleading? -if you send spam (unsolicited messages) there must be an opt-out option C. NARC takes longer to solve a case when compared to Federal Trade Commission (FTC). -may never raise premiums, maria the agent would like to advertise an annuity product on a highway billboard. B. FTC Improvements Act State regulation of advertising predates federal regulation buy several years. On the other hand, to the extent that spam pertains to a lawful product and is neither false nor deceptive, it constitutes commercial speech protected by the First Amendment. The Federal Trade Commission requires advertising for any product that is sweetened with saccharin to contain a warning that saccharin may be hazardous to one's health. Corrective Advertising: C. refer the matter to an appropriate government agency. 2. D. Most media accept any advertising they receive since advertising is their major source of revenue. A. Corrective advertising an insurance company needs to obtain personal information from a third party concerning an applicant. C. Lanham 4 & -2 \\ *Functioning Return Address and Opt-Out Mechanism* _______________________: Commercial e-mail messages that include "materially false or misleading" header information or deceptive subject lines are prohibited. -Litigated orders E. U.S. Supreme Court rulings, The _____ moved against a number of national advertisers as a result of inactivity by the Federal Trade Commission (FTC) during the Reagan administration. In addition, many local governments have consumed,er protection laws that apply broadly to false advertising. 5. Marketing Agreements are only binding for those handlers that sign the agreement. E. the advertising relies on the use of puffery to make its point. -producer -total disability what amount will be paid under a policy where the insured misstated his/her age? Spoekspersons for the FTC have said that the agency will use the power only in those instances in which the advertising can cause harm, in those cases that contain a clear law violation, and in those cases in which there is no prospect that the advertising practice will end soon. Staff attorneys at the FTC will issue a complaint against the advertiser, and a hearing will be held before an administrative law judge. -FTC regulates spam E. remuneration. Acceptable forms include: *Recently some consumer class-action lawsuits have netted huge settlements.*. Corrective advertising If a case is not resolved to its satisfaction, the NARB has the power to order an advertiser to stop running its ads. c. secured -1200 employees A television station won't advertise a sporting event that will be telecast on a competing channel. Misleading comparative claims. D. were made legally binding by the Robinson-Patman Act. D. Freedom of speech Federal Trade Commission A. During fiscal year 2013, the FTC received more than 3.7 million complaints regarding alleged violations of the registry, down from about 3.8 million in 2012. 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. C. a cease-and-desist order. 1st amendment doesn't protect false/misleading ads or ads for unlawful goods/services. Webset criteria of regulating advertising. *Qualifying disclosures must be legible and understandable, the FTC has ruled. A. U.S. B. -keep replacement records on file for at least 10 years 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. C. not requiring consumers to make a purchase as a condition for entering. D. affirmative disclosure order -no more than 3 commissioners can be from the same political party, Bryers case and FDA - label said no trans fat, but it had a lot of saturated and total fat - FDA said consumers will not be aware of the difference, Do Not Call List: D. the FTC may charge Acme with using puffery, which is an illegal form of advertising. Advertisers can still litigate the question, challenge the trade regulation rue, seek an appeal in court and so forth. C. NAD/NARB. In fact, the FTC makes it clear that an agency has "a duty to ascertain the existence of substantiation for the claims which it makes." A. deceptive advertising. 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. B. a commercial that was rejected at the storyboard stage is accepted at the final stage. A. -Also court said this case was "in the public interest". Under this policy, express substantiation claims, such as "doctors recommend" and "specific tests prove," require the level of proof advertised. Almost everyone who uses electronic mail has received unsolicited commercial advertising known as "spam." ", 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. Under the watchful eye of the FTC, the following general advertising rules must be followed: Ads must be truthful and non-deceptive. 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? Learn about antitrust or competition laws. C. National Association of Broadcasters A. previous advertising has led to the formation of false beliefs about a product. D. Presence of puffery in the advertisement -Not only is it now possible for plaintiffs to win actual damages and court costs from the defendant, but they can also tap into any profit made by the competitor through the use of a bogus advertising campaign. C. Consumer Protection -waiver of premium WebAdvertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. B. injunctive power. Advertising Practices found to be unfair or deceptive 3. The Federal Trade Commission remains the nation's most potent weapon against false or misleading advertising. advertising regulations exist in order to quizlet. Will you buy the book? a. affiliation. No more than 3 of the commissioners can be from the same political party. -person's employment history D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. C. The Wheeler-Lea Amendment Specifically, the rule requires that the most prominent ticket price displayed on print ads and on Web sites be the total price, including taxes. C. is important to consumer and would likely have an effect on the purchase decision. -former depended of employee no longer of dependent status Advertising, as a form of expression subject to legal regulation and potential First Amendment protection, is the dominant cultural icon of our time. 3. the reinstatement provision in a health insurance policy is in which of the following situations would the insurer be liable for a loss? 8. "acting reasonably in the circumstances" -defer all costs to the federal government for public assistance programs, receive matching funds to expand public assistance programs, ownership of a life insurance policy may be temporarily transferred with a(n), replacement regulation is designed to protect the interests of A. misinterpretation Laws must be static and unyielding in order to provide stability for a society. (The importance of this power alone cannot be overestimated. *Corrective Advertising*is a highly controversial scheme based on the premise that to merely stop an advertisement is in some instances insufficient. Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims: "to the consumer's detriment", Advertising Practices found to be unfair or deceptive 1. Consent Decrees This requirement falls under the FTC's _____ requirement. B. Sherman Antitrust Act the treasurer of XYZ insurance discovers that the treasurer's company is being investigated by the banking and insurance commissioner. -home address It also obtained 19 civil penalties in 2012, including $22.5 million from Google, Inc. E. Independent Business Alliance, D. Electronic Retailing Self-Regulation Program. If an advertiser disagrees with a NAD or CARU decision, it can appeal to the _______________________________. In the actual implementation and application of the 2 critical components of the FTC's rules against deceptive advertising, 3 key considerations emerge that are set forth: A. Virginia Consumer Council Test D. Superlatives such as greatest, best, and finest are puffs that are often used in advertising. There must be a representation, omission or practice that is likely to mislead the consumer* He drives every day and never drives the same car two days in a row. -No ad containing an offer to sell a product should be published if the offer is not a bona fide effort to see that product. -a loan can be taken out for up to the face amount of the policy, net death benefit will be reduced if the loan is not repaid, signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT.. -notify the existing insurer of the proposed replacement B. D. Independent Business Alliance WebProposed insured. funding for medicare part B is partially provided by which of the following is NOT a duty of the Commissioner? If you go to work at an advertising agency, you must understand that your agency may be held liable if it is an active participant in preparing a deceptive advertisement or if it knows or should know that an ad is either false or lacks substantiation. A. require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. Federal Communications Commission D. Electronic Retailing Self-Regulation Program (ERSP). B. deception 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. Injunctive power to immediately halt advertising campaigns that could cause harm to consumers 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. C. Robinson Patman Act food and pharmaceuticals Which promotional strategy requires a In this case the commission can issue an order, usually called a *litigated order,* to stop the particular advertising claim. C. children, advertisers, and agencies. Network standards regarding acceptable advertising have remained constant over the past 30 to 40 years. B. require an advertiser to run comparative advertisement. 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." Professional Development. -Voluntary compliance The FTC considers certain categories of information to be more important than others when deciding whether a claim is material. B. consent order C. National Advertising Review Council B. refer the case to an industry trade association. The most recent commission policy statement on substantiation was issued in 1984. Three major divisions of the Federal Trade Commission are the Bureaus of: Corrective advertising, in which an advertiser must admit in future advertisements that past advertisements have been incorrect an advertiser promotes his/her own good and tends to pick holes in a competitor's version of the product. WebSection 18 of the FTC Act, 15 U.S.C. B. Puffery is banned in a 1996 revision of the Uniform Commercial Code. Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that regulate the kind of advertising they carry. III only. C. any type of comparative advertising. -No, it is not political speech. So, in 19114 the Clayton Act was put in place to stop them. WebAdvertising is not equally productive for firms in every market type. D. Advertising deregulation C. Robinson Patman Act B. The basis of the program is simple: The commission asks advertisers to substantiate claims made in their advertisements. C. Electronic Retailing Agency. A. Puffery is illegal. D. enticement C. affirmative disclosure A large protion of that money, under the federal Beef Promotion and Research Act, has gone to finance generic advertising for the beef industry, including the "Beef. A. Wheeler-Lea Amendment If the advertiser loses this final appeal before the commissioners, he or she can appeal the litigated order in federal court. -partially insured The federal law that made this suit possible was the _____ Act. This is known as: 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. -third party administrators When advertisements or sales practices are targeted to a specific audience, such as those aimed at children or people who are elderly or terminally ill, they will be viewed from the perspective of a reasonable member of that group. D. Bureau of Reconstruction D. Fairness -Attempts by competitors to undermine or dilute these images or claims were regarded more seriously than in the past. One commissioner is chosen by the president to be the chairman of the FTC. -establish new insurance laws, establish continuing education requirements, which of the following is true concerning the proceeds of a life insurance policy? To settle the issue, Ticketmaster agreed to pay refunds to consumers who bought tickets for 14 Bruce Springsteen concerts through its ticker resale Web site TicketsNow, and to be clear about the costs and risks of buying through its reseller sites. A. enhance the credibility of the publication. Most commercials once rejected cannot be rerun. * For instance, in 2012 CARU recommended that the maker of Bratz Party Dolls alter packaging that featured the text "now with 100s of poses" and included photos of 3 dolls posed without assistance in various stances. -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. C. not require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. They would, instead, rather spend their own money on distictinve advertising for a particular niche or premium variety of beef, such as organizally fed. Typically the advertising campaign is already over. The representation, omission or practice must be material. A. -fully insured 2. C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. B. A. Children's Advertising Review Unit (CARU) 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. B. -producers, a guaranteed issue insurance policy has no Almost anyone who has watched television advertisements during the past decade or so is familiar with trademarked slogans such as "Beef. Whereas commercial speech typically receives limited First Amendment protection. B. -agents commission rate Deceptive advertising A. 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. -person's hire date Advertisers don't like the publicity that accompanies a charge of false advertising. Its cost of goods sold is 75 percent of sales, and it finances working capital with bank loans at an 8 percent rate. How many ads are in your general vicinity each day? There was no government ban on the disclosure of the alcohol content in advertising for these brews, Justice Clarence Thomas wrote. -contributory Five commissioners, each of whom is nominated by the president of the U.S. to serve a 7-year term, head 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. -whether a spokesperson is paid. which of the following is CORRECT regarding the death benefit amount? Although CAN-SPAM does not provide a civil remedy for those of us who receive spam, a provider of Internet access service that is adversely affected by spamming activities on its service may bring a civil lawsuit against the spammer in any federal court in the U.S. seeking both a permanent injunction to stop the spamming and monetary damages for harm caused by the spam. The former phrase played a pivotal role in a case decided by the U.S. SUpreme Court in 2005. E. Clayton Antitrust Act, The Bureau of Alcohol, Tobacco, and Firearms (BATF) is an agency within the ____. For a long time, advertising was ______ protected by the First Amendment. Trade regulation rules, guides & Child's Online Privacy Protection Act, FTC issues industry guides for a variety of products, services, and marketing practices. pat owns a 20-pay life policy with a paid-up dividend option. E. advertisers, government, and the television networks. 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 C. FCC Act -But judges have said past facts can be misleading, It's not nearly as easy to prove "substantial state interest" in commercial speech than porn and obscenity. An appeal of an adverse ruling by a circuit court can be taken to the Supreme Court, but only if certiorari is granted. -this is why there are so many laws because there are so many ads; also, Lanham Act gives a good amount of money if you win one of these cases, ______ is a powerful, strong, and influential agency. 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. C. consumers recognize puffery and don't believe it. Sometimes the owner of the medium thinks the product that is being advertised is offensive, like NC-17 or adult movies, or condoms. D) It is ineffective in situations in which competitors are unable to enter the market easily. The FTC believes that the claim is deceptive. E. Most media reject political ads. B. Wheeler Lea which of the following must be included in the ad? Consent agreement Substantiation of advertisements, in which the advertiser must prove all claims made in an advertisement A man owns an Audi, a Ford, and a VW. C. Advertising for contraceptives is completely banned on all networks since 1995. -Usually for campaigns 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. B. is regulated through codes developed and enforced by the Federal Trade Commission. Federal Trade Commission D. misleading omission D. Trademark Improvements Act Advertising Practices found to be unfair or deceptive 2. A. Advertisers claimed the Registry violated their First Amendment rights to free speech. The FTC issues industry guides for a variety of products, services and marketing practices. A. E. puffery. ) Nor were there limits on the words a brewer could use to describe these products. -purchase health insurance from the federal government What happens to an advertiser who signs a consent decree, then violates the provisions of the decree? The commissioners then vote on whether to issue a complaint. *Disclosure Requirements* Food and Drug Administration. 6. The high court has granted states fairly extensive authority to regulate advertising for professional services by individuals like doctors, lawyers, dentists and others. A. If the advertiser has had a good record in the past and if the offense is not too great, the company can voluntarily agree to terminate the advertisement and never use the claim again. A. a consent order. *Attorneys for the FTC can seek these restraining orders in federal court. These statutes protect consumers from predatory business practices by ensuring fair competition exists. The law originally required consumers to re-register their numbers every 5 years to remain on the registry. The advertiser can refuse to sign the agreement. The _____ regulates and controls the advertising of alcoholic beverages. D. Television is the most carefully scrutinized of all forms of advertising. Nearly a century later, the FTC today is the only federal agency with jurisdiction to protect consumers and maintain competition in broad sectors of the economy. E. the consumers may sue the company for non substantiation of the ad. President Theodor Roosevelt broke up many Trusts by making anti-trust laws. The basic defense against any false advertising complaint is truththat is, proving that a product does what the advertiser claims it does that it is made where the advertiser says it is made, or that it is as beneficial is it is advertised to be. Twisting is best defined as. *Aggravated Violations*. reggie purchased a life insurance policy with a face amount of $500,000. A. unsolicited order A. selective exposure -waiting period A. In doing this, the advertiser makes no admission and the agency no determination that the claim is deceptive. D. a commercial is approved at the storyboard stage but then is rejected after it is produced. Within how many days must a producer notify the department of banking and insurance of a change in address? Using an ambiguous or easily confused phrase. C. National Advertising Review Board -establish insurer rates 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. -if spam has anything to do with sexually explicit, in header, it has to say "SEXUALLY EXPLICIT:" in all caps and you have to scroll down to see the sexual explicit content
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