Although MyGait LLC could support claims that its Elite II Computer was "designed for seniors," the National Advertising Division recently recommended that the company modify its product benefit claims and disclosures about how to obtain technical support.

The self-regulatory body took a closer look at ads that appeared in the American Association for Retired Persons' monthly newsletter, as well as claims that appeared on MyGait's website, promoting the company's $999 computer that is designed to meet the needs of elderly consumers. Express claims included "The failure-free, worry-free computer designed just for seniors," "Does everything a costly complicated computer does," and "Lifetime Unlimited Support** ** Computer includes a worry-free $19.95 monthly service program."

Noting that technology and Internet connectivity are "integral parts of modern life in the United States," the NAD expressed concern that MyGait's ads implied the one-time purchase price of $999 provided a purchaser with worry-free technical support. In reality, the purchase price did not include a mandatory and separate $19.95 monthly charge for the support program.

Particularly when considering the vulnerable nature of the audience targeted by the ads, "the advertiser's 'failure-free' and 'worry-free' claims are directly tied to its computer, not to its monthly service program," the NAD wrote. "NAD noted that without the advertiser's ongoing service, its computer is not particularly 'failure-free' or 'worry-free.'"

These claims should be modified "to ensure that consumers understand that the benefit is related to the purchase of the MyGait service program, not the purchase of the MyGait computer alone," the self-regulatory body said.

MyGait's functionality claims were similarly overbroad. The NAD took issue with the claim that the computer "Does everything a costly complicated computer does." For example, the MyGait computer included a word processor but did not have a CD-ROM drive, photo or video editing software, or spreadsheet and slideshow development programs.

"This simplification pares away some of the functionality available on more standard personal computers—the very functionality that makes them more 'complicated,'" the NAD said. "While the MyGait [computer] may provide its consumers with the functionality it believes its consumers need (and in a way that is easily accessible and understandable), it does not provide all of the complex functionality that many other personal computers provide."

The NAD's most fundamental concern "was the manner in which the advertiser disclosed the fact that, to attain most of the benefits of purchasing a MyGait computer, consumers must also purchase the advertiser's 'worry-free $19.95 monthly service program.'" Print ads touted numerous features of the computer without informing consumers that they would not obtain such benefits simply with the one-time purchase of the computer.

"What is actually being marketed are the benefits that senior citizen consumers can attain by purchasing a product and service plan in combination: the MyGait computer and the MyGait worry-free service program," the NAD wrote. The NAD found that the advertising reasonably conveys the unsupported message that consumers can attain these benefits by simply making a one-time purchase of the physical MyGait computer. To avoid the potential for any consumer confusion, NAD recommended that the advertiser modify its main claims to "expressly state that the claimed benefits require the purchase of its computer together with a monthly service program."

The NAD was not persuaded by the advertiser's position that consumers learned about the cost of the recurring monthly fee at some point prior to purchase. "NAD has held that disclosure of material terms must be within the four corners of the advertising in which the related claim appears," the decision emphasized. "Reviewing the claims in the context in which they appear, NAD found that consumers, particularly less technologically savvy consumers, would not understand that the advertiser's product benefits necessarily requires two interrelated purchases … not one."

To read the NAD's press release about the decision, click here.

Why it matters: While addressing claims and marketing practices for a product directed specifically to mature consumers, the NAD decision offers some valuable lessons for advertisers generally. In addition to providing a reminder that the self-regulatory body will consider the audience targeted by the advertiser—in this case, a vulnerable population—the NAD reiterated the importance of disclosures. "Clear and conspicuous disclosures should specifically be easily noticed, read and understood by the audience of consumers targeted by the advertising," according to the decision.