Back on the subway this morning, I was checking out the ads and remarking* that many include offers where “terms apply.” Sometimes there’s an asterisk. Often these offers include free trials to start off a subscription: order the product, get it free for a month, then automatically pay for the next how-ever-many months until you cancel. (You remember all those rules about subscriptions, right? See here)

I was especially interested to see three different ads on the same subway car advertising very different products but all touting a $5 offer: one, for an investment app ($5 is the required initial investment amount); one for a meds subscription ($5 is the special price for the first pack); and the third for that hipster electric toothbrush I already wrote about ($5 is a refill price). All the ads have a bold headline, with the $5 price, and direct you to a website or app to find out more. Is that okay?**

We all know the basic rules: material terms and conditions of an offer or claim must be disclosed clearly, and in close proximity to the claim. And what makes something “material”? If an ad makes express or implied claims that are likely to be misleading without certain qualifying information, that information is material and must be disclosed. (Take a look at the FTC’s .com disclosures, particularly page 5, which provide examples of certain types of claims requiring certain types of disclosures.)

As the FTC has further said in the context of online offers, “[w]hen a product advertised online can be purchased from brick and mortar stores or from online retailers other than the advertiser itself, necessary disclosures should be made in the ad before consumers go to other outlets to make their purchase.” Plus, the fact that the advertiser has limited space is no justification for omitting material information: as the FTC has said, if a space-constrained ad doesn’t let you make material disclosures, don’t use that type of ad for that particular claim or offer.

Similarly, NAD has consistently held that the material terms and conditions of an advertised program must be “clearly and conspicuously communicated within the four corners of the advertising in which that claim appears….Additionally, advertising for products or services which can be purchased through multiple different outlets should include any disclosures in the advertisement itself.” (Case Report #5686) NAD has also noted, citing FTC precedent, that advertisers should not use a “misleading initial approach” to attract customers. (Case Report #5679, citing Exposition Press, Inc. v. F.T.C., 295 F.2d 869 (1961)).

Nonetheless, ads with bold headlines and an asterisked “terms apply” statement are ubiquitous. Are they okay? Can you safely say just that “terms apply” without actually including all those terms in your ad? The answer, dear readers, is an unsurprising “it depends.”

Context matters.*** And a lot of factors are relevant to the analysis: first, consider the nature of product itself. Is the product such that consumers will reasonably expect that there will be a lot more to know before they commit, like with a credit card offer as opposed to, say, a pair of shoes? Second, how will consumers buy the product? Will they see the ad and go straight to the store to buy it? Or will go to a website where they’ll be educated with additional information before making the purchase? Third, how complex are the terms themselves? Is there simply too much to communicate in a subway poster (or a Tweet)? Does saying “terms apply” in the particular context communicate that complexity? Is there some, if not all, information that could be included? There are degrees of materiality. Fourth, how sexy**** is the ad copy? Is it clearly a teaser ad inviting you to find out more, or does it seem complete? Would someone understand that there’s more they need to know before purchasing? Finally, does the ad include any of those magic words – like FREE – that simply beg for more disclosures?

It's not always easy to get it right. But, as always, it helps to think like a consumer as well as a lawyer when reviewing ad copy. Plenty of opportunities on the NYC subway!

*to myself, silently, of course. There are enough people on the subway carrying on loud conversations with themselves.

**a reminder that this is not legal advice. It’s just a blog.

***doesn’t it always?

**** and by sexy, I don’t mean the product — though there’s plenty of that on the subway (have you seen those ads for The Museum of Sex?) -- but how enticing the ad copy is.