The Better Business Bureau recently updated its Code of Advertising. The Code provides comprehensive guidance for businesses on a wide range of truth-in-advertising issues. The Code, which was last updated in 1995, was recently revised to address advertising in social media and new media channels, and to align the guidance with the Federal Trade Commission’s Green Guides and Endorsement and Testimonial Guides. The key updates to the Code include:
- Endorsements and Testimonials: The section now states that endorsements are likely to mislead or confuse consumers if they are placed by advertisers in online blogs or on other third-party websites and do not clearly and conspicuously disclose the connection to the advertiser, and when advertisers compensate consumers for leaving feedback on third-party online blogs or websites, but fail to ensure that consumer disclose such facts on those blogs or websites.
- “Up to” Price Savings Claims: The section was revised to eliminate the requirement for advertisers to include a range of savings when an “up to” savings claim is made. Instead, when such a claim is made (e.g., “save up to 40%”), the maximum savings must comprise a significant percentage (at minimum, 10%) of all items in the offering.
- Sales: This section was revised to clarify that advertisers may, in good faith, extend a time limit or introductory sale for a stated period, but if the extension is for more than a short period of time, the advertiser must be prepared to substantiate that the offering has not become the regular price.
- Emergency or Distress Sales: These sales must be limited to a short period of time and may only offer products or services that are affected by the emergency. Advertisers should only use the unqualified term “liquidation sale” when the advertiser’s entire business is in the process of being liquidated prior to an actual closing.
- Rebates: Advertisements for rebates must clearly and conspicuously state the before-rebate cost, as well as the amount of the rebate. Advertising must clearly and conspicuously disclose any material terms and conditions, including any purchase requirement or additional fees, and when consumers can expect to receive their rebate.
- Puffery: This new section addresses what constitutes “puffery” in advertising, including statements such as “best food in the world” and “we try harder,” as well as other individual opinions, statements of corporate pride, exaggerations, blustering, and boasting statements upon which no reasonable buyer would be justified in relying.
- Environmental Benefit Claims: This new section states that advertisers should not make broad, unqualified environmental benefit claims like “green” or “eco-friendly.” Additionally, qualified claims should highlight important environmental benefits and should clarify whether the claim applies to the product, its packaging, or just a portion of the packaging or product. The section also contains guidelines regarding recycled content claims and “non-toxic” claims.
- “Made in USA” Claims: This new section sets forth the requirements to make “Made in USA,” “Assembled in the USA,” and qualified “Made in the USA” claims, consistent with the FTC’s guidance regarding such claims.
- “Product of Canada” and “Made in Canada” Claims: This new section states that goods must be composed of at least 98% Canadian content for “Product of Canada” claims and must be at least 51% Canadian content to make “Made in Canada” claims. Additionally, “Made in Canada” claims must also contain a qualifying statement indicating that the product contains imported content. In both cases, substantial transformation of the product must have occurred in Canada.
TIP: Companies should carefully review the updated Code of Advertising to ensure that all advertising complies with the new and revised provisions of the Code.