Have you ever seen an advertisement for a product that seemed a little too good to be true? Truth in advertising is a hotly contested issue, and advertising that may cross the line could be drawn into a dispute with the Federal Trade Commission or into court by a competitor. But did you know that there is another group that monitors and polices advertising? The National Advertising Division (NAD) of the Better Business Bureau is an industry group set up to review false or misleading advertising and referee complaints between competitors.

In a competitor dispute, the NAD will consider both parties’ arguments, review evidence, meet separately with each party, and issue a decision finding either that an advertiser’s claims are substantiated or that the advertiser must modify or discontinue the challenged claims. NAD can also review advertising without a competitor challenge.

We recently participated in the NAD’s annual conference, where NAD staff, FTC representatives, and advertising lawyers discussed the NAD process. The benefits of that process are:

  • It is a lower-cost alternative to litigation. The process provides for briefing and, if desired, meetings, but does not allow for discovery, and therefore avoids discovery battles and costs.
  • NAD’s staff has deep expertise in advertising review and substantiation. Expert reports and consumer surveys may be submitted, but are not required.
  • The burden of proof is on the challenged advertiser to substantiate its claims.
  • In an NAD procedure, all data the NAD receives in reviewing a case is kept confidential.
  • The NAD process is relatively quick.