Ad regulators ignore deceptive spots, professor charges

A UW–Madison advertising expert charges advertising regulators, including the Federal Trade Commission, with dereliction of duty in identifying and prosecuting deceptive advertising claims.

Ivan L. Preston, professor emeritus of journalism and mass communication, has published an article on the subject in the new issue of the Journal of Law and Commerce. In “Puffery and Other ‘Loophole’ Claims, How the Law’s ‘Don’t Ask, Don’t Tell’ Policy Condones Fraudulent Falsity Advertising,” Preston accuses the FTC of:

• Giving potentially deceptive advertisers immunity from investigation under so-called “loophole” exemptions. Preston says chief among the deceptions is “puffery,” the marketplace term for unverified opinions such as “better” and “best.”

  Another commonly used but potentially deceptive technique is the use of “lifestyle” claims, such as depictions of consumers using the product enjoying social or health benefits. Preston says such representations sometimes draw erroneous links between the product and the benefit, and should be examined.

• Assuming advertising methods have no effect on consumer buying behavior.

  “FTC regulators maintain this incorrect assumption through a ‘don’t ask, don’t tell’ policy,” Preston says. “By routinely declining to examine consumers’ responses to loophole claims, the FTC doesn’t ask. This also encourages advertisers, who know whether or not the product claims are meaningful, not to tell.”

  However, he says there is ample evidence that consumers often see factual meaning in advertising puff claims and lifestyle implications. “That means that in many cases the FTC and state regulators are condoning, not merely the falsity of such advertising, but also its fraudulent use,” he says. “Further, the regulators’ may themselves be acting fraudulently — or at least negligently — in their failure to examine the claims while ignoring the evidence and reasoning that suggests the claims often are false.”

Preston says no one industry has a lock on fraudulent advertising; however, he says that the selling of name brands contributes significantly to the problem.

“The tendency for advertisers to use puffery, lifestyle claims and other loopholes stems from the need to differentiate their own brand from those of competing companies. Brand names, labels, logos, images are all ways that advertisers try to achieve that all-important differentiation,” he says.

Granting immunity to advertising loopholes means consumers are left to rely on their own skepticism when faced with advertising claims, Preston says. However, “buyers shouldn’t have to beware to their own detriment. The makers of a product are the experts about it, and we need to be able to rely on what they say. Product information is available elsewhere, in ‘Consumer Reports,’ for example, but manufacturers are our chief source of it. The law is now telling us we might be wise to ignore what product makers say.”

Preston says the solution is for the FTC and fellow regulators to examine carefully how advertising claims work in the minds of consumers and eliminate deceptive claims: “The public should be able to trust rather than forced to distrust advertisers.”