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. Independent Business Alliance A. cease-and-desist 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. "likely to mislead the consumer" B. -If you have a spokesperson, the consumer is affiliating your spokesperson and your brand together (this is what you have to assume) -policy owners Bureau of Compliance Whereas commercial speech typically receives limited First Amendment protection. -keep replacement records on file for at least 10 years -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 Communications Commission which of the following is CORRECT regarding the death benefit amount? -insurance companies, policy owners from misrepresentation and loss of benefits, advertising material for a life insurance policy does NOT need to contain which of the following? D. comparative advertising. D. Bureau of Consumer Protection -disclaimers must be included by the FTC. D. advertisers who want to use misleading wording in their ads. D. Most media accept any advertising they receive since advertising is their major source of revenue. D. STP Corporation. E. Association of American Publishers, Which of the following is the appellate unit of the National Advertising Review Council? B. ad substantiation is not needed because most advertisements make very legitimate claims. 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. 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. Worked, however, some companies then decided to just merge together. C. National Advertising Review Council To be deceptive an advertisement must contain a representation, omission or practice that is likely to mislead the consumer, the advertisement or practice must be considered from the perspective of a reasonable consumer; and the representation, omission or practice must be material. B. It's What's for Dinner" and "Got Milk?" B. C. puffery Guides and the Child Online Privacy : Congres held hearings on the matter. Affirmative disclosures Which of the following statements is TRUE? D. is concerned with the misrepresentation of premiums when used in sales promotions. 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. C. Robinson Patman Act A. misinterpretation B. governance, compliance, and cooperation. -recurrent disability D. The division of Advertising Practices [4230]+[wxyz]=[2305]\left[\begin{array}{rr} B. The registry, however, would also prove controversial. The FTC can seek an injunction to stop advertisements that it believed violated the law. Presence of superlative words in the advertisement C. Consumer Protection D. fairness. The commission considers the entire advertisement as well as all other elements of a transaction when making this determination. C. not requiring consumers to make a purchase as a condition for entering. -Litigated orders An appeal of an adverse ruling by a circuit court can be taken to the Supreme Court, but only if certiorari is granted. If an advertiser disagrees with a NAD or CARU decision, it can appeal to the _______________________________. 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.". But Roommates.com reached the opposite conclusion. -person's net income Central Hudson Test E. Network standards have become more stringent in response to competition from independent and cable stations. * 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. -net death benefit will be reduced if the loan is not repaid -$400,000 C. Lack of selective disclosure 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. Cease-and-desist orders: b. identity. In addition to the national registry, courts have upheld state do-not-call registries, paying favorable attention to the voluntary "opt-in" nature of the state laws (in other words, the registries apply only to individuals who sign up for them, rather than automatically applying to everyone). B. *Qualifying disclosures must be legible and understandable, the FTC has ruled. B. a superlative; illegal In general, advertisements of alcoholic products must be truthful and without deception. D. discounts * Postal Service Under the watchful eye of the FTC, the following general advertising rules must be followed: Ads must be truthful and non-deceptive. *Consumers, as opposed to competitors, have a much more difficult time in maintaining an action for false advertising. E. injunction. It is very difficult for non competitors to gain standing to sue for false advertising under the Landham Act. Endorsements must reflect honest opinions, findings, beliefs or experiences of the endorser. C. Puffery legitimization -If you use a spokesperson, that spokesperson should support the product The basic defense against any false advertising complaint is truth-that 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 as it is advertised to be. 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. 3. Therefore, it is consistent with the limits the First Amendment imposes on laws restricting commercial speech.". A. This agency was responsible for putting warning labels on alcoholic beverage advertising and D. Regulations developed by a consortium of trade associations Other times the ads themselves might be regarded as tasteless, like an advertisement for clothing in which then models are scantily dressed or posed erotically. -is made available after paying a $50 fee. D. U.S. In the past, the agency had to pursue deceptive advertisements one at a time. E. National Association of Broadcasters, C. American Association of Advertising Agencies. -jurisdiction is not particularly limited 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. -the court held it went against First Amendment Postal Service have laws that govern the use of a(n) ____, whereby a company proposes to send merchandise to consumers and expects payment unless a rejection or cancellation notice is sent by the consumer. D. Electronic Retailing Self-Regulation Program (ERSP). C. Robinson Patman Act This remedy is infrequently used. Unsolicited junk fax ads and telemarketing calls to consumers who do not want to be called are banned under the: Federal Trade Commission's advertising substantiation program requires advertisers to substantiate their claims: III. Trade regulation rules C. Wheeler-Lea Amendment Independent Business Alliance B. speech that promotes a commercial transaction. *, *National Advertising Division (NAD)* E. consumers believe in puffery. B. CARU determined the packaging might mislead children into believing that they could make the dolls duplicate the poses featured on the packaging when, in fact, they could not do so. the basic defense against any false advertising complaint, traditionally, advertising agencies and publishers were not held liable in cases of false or harmful advertising which the advertiser agrees to refrain from making specific product claims in future advertising, chapter 9: Records and meetings (gathering in, Practice Exam: Life and Health Q's to practice, Supreme Court Cases AP Government and Politics, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Daniel F Viele, David H Marshall, Wayne W McManus. 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. Federal Trade Commission E. Affirmative disclosure. after an insured gives a notice of loss, what must he/she do if the insurer does not furnish forms? 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. Local radio 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. It may believe that the advertising claim is truthful or may simply want to hold off any FTC ban on certain kinds of product claims. -Comparative advertising, in which an advertiser not only promotes his or her own goods but tends to disparage the product made by a competitor, became more common. * 1) Federal Trade Commission (FTC) (most active) controls unfair methods of Law greatly enlarged both the power and the jurisdiction of the FTC. In particular, Johanns v. Livestock Marketing Association centered on a federal statute and related order adopted in the 1980s under which the U.S. secretary of agriculture imposes a $1-per-head assessment, knwn as a checkoff, on all sales of cattle in the U.S. A. _______________________ (_____): This organization, a self-regulatory forum for the advertising industry, reviews national advertising for truthfulness and accuracy, and it provides a form of alternative dispute resolution for companies that is cheaper than litigation. 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. A. selective exposure A. Although the burden is on the government to disprove the advertiser's claim, it is always helpful for an advertiser to offer proof to substantiate advertising copy. a. affiliation. The commissioners then vote on whether to issue a complaint. 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. -It became somewhat easier for plaintiffs to win Lanham Act false advertising suits. A. C. the findings of marketing research studies. -person's employment history B. advertisers so that they can sue media for not providing them with the promised reach and frequency. FTC initiated this in 2003 that allows people to block the calls of telemarketers. Information Technology Act (ITA). period of time after the premium is due but the policy remains in force. Trade regulation rules that can be issued to regulate advertising throughout an entire industry. Advertising Practices found to be unfair or deceptive 2. E. puffery, unethical. 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. E. Federal Communications Commission, D. National Association of Attorneys General. *2. Bureau of Economics Advertisers can still litigate the question, challenge the trade regulation rue, seek an appeal in court and so forth. -incontestable period Determining what constitutes commercial speech, however, is not easy. B. Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that regulate the kind of advertising they carry. The FTC usually requires an advertiser to substantiate claims that go beyond those permitted by the guides or may even bring a false advertising action against the business. For instance, in the seminl 1943 opinion in West Virginia Board of Education v. Barnette, the court held that children in public schools could not be forced or compelled to recite the Pledge of Allegiance or salute the American flag. The commission evaluates the entire advertisement when examining it for misrepresentation. D. Electronic Retailing Self-Regulation Program D. cease-and-desist B. consumers need to know information about consequences, conditions, and limitations associated with the use of the product. Consumer Redress, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. 2. B. But if the commissioners support an administrative law judge's ruling against an advertiser, the order becomes law after it is finalized by an appellate court. -There was no substantial state interest. Self Regulation by the Advertising Industry, Local Regulation and Better Business Bureau. An investigation into the lengths of celery sticks grown in a certain US state. 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. In other words, commercials should makes ear what the typical results are (an, of course, have prior substantiation for such claims); merely stating that the results of the endorser are not typical will not cut it. There must be a representation, omission or practice that is likely to mislead the consumer. Although $1 taken alone may seem small for each sale, the program has collevted more than $1 billion since 1988. The advantages of the *trade regulation rules (TRRs)* are numerous. 3. additional penalties may be applied to those who a) engage in e-mail "harvesting," b) use multiple e-mail accounts for commercial messages, or c) use unauthorized relays for commercial. which of the following statements is true? -is available to the public B. 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. B. puffery has detrimental effect on consumers' purchase decisions. Since the mid-1970s commercial advertising has been given the qualified protection of the First Amendment because much advertising contains information that is valuable to consumers. -$200,000, which of the following actions is REQUIRED by an agent who is replacing an existing life insurance policy? President Theodor Roosevelt broke up many Trusts by making anti-trust laws. B. selective exposure. If the staff members believe there is a provable violation, then a proposed complaint, a proposed consent agreement, and a memorandum are prepared for the commissioners. -former depended of employee no longer of dependent status these are policy statements that alert businesses to what the agency believes are permissible advertising claims or practices, if the ftc believes a claim to be deceptive, the company can voluntarily agree to terminate the advertisement and never use the claim again, also known as a consent order or decree is a written agreement between the commission and the advertiser in any representations that would be deceptive or could not be substantiated if made directly by the advertiser, the commission can issue an order to stop the particular advertising claim, the commission asks advertisers to prove all the claims made in the advertisements, the ftc forces the advertiser to inform the public that in the past it has not been honest or misleading, the ftc can seek an injunction to immediately stop advertisements that it believed to violate the law; the agency will only use this power in those instances where the advertising can cause harm, these can be issued to regulate advertising through an entire industry, 1) The advertiser can agree to sign the agreement, and the commissioners vote to accept the agreement. A. 1st amendment doesn't protect false/misleading ads or ads for unlawful goods/services. (2) An advertisement shall not state or imply that the payment or amount of nonguaranteed elements is guaranteed. May also argue the claim in question is not material, and therefore will not impact a purchasing decision. -conduct investigations Industry guides apply only to prospective advertising campaigns, events that have not yet occurred. C. is regulated by affiliates. Writing for a 6-justice majority, Justice Antonin Scalia wrote that "the message set out in the beef promotions is from beginning to end the message established by the Federal Government" and that the secretary of agriculture "exercises final approval authority over every word used in every promotional campaign." E. a commercial is rejected at the idea generation stage. -may cancel the policy only at renewal B. a commercial that was rejected at the storyboard stage is accepted at the final stage. B. Robinson Patman Act SUMMARY: D. limits on the amount of television advertising per hour targeted to children are eliminated. A. There was no government ban on the disclosure of the alcohol content in advertising for these brews, Justice Clarence Thomas wrote. Although that slogan at first may seem to benegit the entire beef and cattle industry, a number of cattle producers objected to it because, as the Supreme Court put it, "the advertising promotes beef as a generic commondity, which, they ccontended, impedes their efforts to promote the superiority of, inter alia, American Beef, grain-fed beef, or certified Angus or Herefore beef." D. Fairness the New Jersey Temporary Disability Benefits Law. provides non-occupational disability benefits. For instance, in 2012 NAD determined that Gillette's use of the term "MoistureRich" in the name of its "Gillette Venus ProSkin MoistureRich" women's razor conveyed the misleading message that the razor moisturizes the skin while one shaves. Corrective advertising, in which an advertiser must admit in future advertisements that past advertisements have been incorrect Postal Service -premium paid, an insurer has the right to recover payment made to the insured from the negligent party. A. permitted consumers to sue manufacturers with whom they had no contractual relationships. c. secured Its cost of goods sold is 75 percent of sales, and it finances working capital with bank loans at an 8 percent rate. The law also gave the agency important new power. A. C. is important to consumer and would likely have an effect on the purchase decision. It may also regulate truthful advertising for lawful activities and goods if it can prove (1) there is a substantial state interest to justify the regulation, (2) that such regulation directly advances this interest, and (3)that there is a reasonable fit between the interest asserted and the governmental regulation. E. the FCC is granted the right to fine advertisers who exceeded advertising limits as defined by the act. All of these are included in the DTPA under trade and commerce . E. National Association of Broadcasters. -notify the existing insurer of the proposed replacement C. affirmative disclosure Ticketmaster and its affiliates agreed to refund some concertgoers to settle FTC charges that they used deceptive bait-and-awitch tacts to sell tickets. Again, this law provides little relief for consumers. B. -agents commission rate -Guides and the Child Online Privacy Protection Act Such an agreement saves the advertiser considerable legal haste, publicity and money, all especially desirable since the advertising campaign is over or almost over. 5. advertising regulations exist in order to quizlet. The FTC prohibits this; Lures consumers into a store who are in the market for an item seen at one price. A well-educated physician might be better able to understand a complicated pharmaceutical ad than the average individual can. The U.S. Supreme Court established the ____, a four-part test, to determine restrictions on commercial speech. A. 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 Better Business Bureau guidelines An advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. C. are issued by the Federal Trade Commission. -The act also make sit illegal for a business to be a monopoly if that company is cheating or not competing fairly. As a discipline, marketing is not affected by things that occur outside of the firm's control. It also obtained 19 civil penalties in 2012, including $22.5 million from Google, Inc. Corrective Advertising: (you have to scroll down to be able to see it) In some cases it is not easy to distinguish political speech from commercial speech, as courts recently have observed. E. peripheral importance. Although ad agencies and publishers/broadcasters are generally not held liable in cases of false or harmful advertising, there are signs that the law is changing. Which of the following statements is true about National Advertising Review Council (NARC)? -Injunctions f(x)=(x5)(12x)f(x)=(x-5)(1-2 x) This the First mendment plainly permits." Acceptable forms include: Which of the following statements about advertising by attorneys, dentists and physicians is true? C. coercion -indemnity US Postal Service (USPS) Responsible for regulating direct mail advertising and 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. -It was easier to block a competitor's claims than to win damages, because in order to gain a monetary award the plaintiff had to show specific monetary loss, something that is often difficult to do given the nebulous nature of advertising claims and the forces that motivate a consumer to buy a specific brand of a product. C. Bureau of Alcohol, Tobacco and Firearms This is known as: Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. B. -presumtive disability 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. D. advertising substantiation C. Bureau of Alcohol, Tobacco and Firearms D. Cease-and-desist orders -if you're saying something subjective ("old puffery"), you are not likely to get in trouble with the FTC for false advertising, Guides: E. Competitor Trademark Act, Which of the following is used by many states as a basis for their advertising regulations? D. Distilled Spirits Council. The NARC became involved in the self-regulation of electronic retailing when it initiated the: * A. Virginia Consumer Council Test When the FTC recovers money against a company for false or misleading advertisements, who gets to keep it? _____ are industry-wide rules used by the Federal Trade Commission that define unfair or deceptive practices. The publicity can do more harm to the advertiser than a monetary fine. C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. 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. Sometimes the misleading statements are minor errors, but other timed they represent a major attempt at deception. The ___________________________________ is the primary agent of the government, but clearly not the only agent. Advertising Practices found to be unfair or deceptive 3. E. Trade Regulation Bureau, The _____ is the division of the Federal Trade Commission that is responsible for investigating cases involving deceptive or misleading advertising. The majority concluded that while "citizens may challenge compelled support of private speeech" they "have no First Amendment right not to fund government speech." -insured A chairperson, one of the 5 commissioners, is appointed by the president. B. speech that promotes a commercial transaction. E. Advertising substantiation. -waiver of premium E. Consumer Protection Act, The _____ gave the FTC the power to issue cease-and-desist orders and levy fines on violators. Federal Communications 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. 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. c. requiring society as a whole to choose among several actions that must be evaluated as right or wrong. The _____ was formed by three advertising associations and the Council of Better Business Bureaus to sustain high standards of truth, accuracy, morality and social responsibility in national advertising.
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