The Better Business Bureau (BBB), known for being the home of NAD, CARU and other advertising self-regulatory forums, is now also the proud owner of an updated advertising code. The BBB announced earlier this month significant updates to its Code of Advertising for the first time since 1985 (when the number one single was “Careless Whisper” by Wham.)
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In a press release, the BBB indicated that changes to the Code were made “to reflect the many new ways that advertisers reach consumers via websites, social media, texting and other channels.”
The BBB’s Code of Advertising not only provides industry guidance but also forms the basis for the self-regulatory system administered by the BBB. The BBB’s Code has typically tried to closely follow the Federal Trade Commission’s (FTC) guidance and regulation. Not surprisingly, significant changes to the Code now include a focus on emerging issues similar to those addressed by the FTC, such as social media endorsements, environmental claims, labels that tout products as being “Made in the USA,” and the addition of a section addressing negative option sales programs. In making these additions, the BBB tried to closely adhere to the FTC’s guidance, often citing FTC source material or additional information. For example, negative option programs must include affirmative consent; if a testimonial features an atypical result, then typical results must be disclosed and general, unqualified claims of environmental benefit should be avoided. In addition, the BBB modified one of its long-standing provisions relating to price savings claims. “Up to” savings claims such as “save up to 40%” no longer have to include the range of savings but advertisers should still ensure that at least 10% of the advertised goods are on sale at the highest advertised savings
While advertising disputes and the self-regulatory process are typically associated with the NAD, the BBB’s Code of Advertising also governs advertising disputes that are heard at the BBB’s 112 local offices. Local BBB offices are staffed with a designated advertising specialist to handle such disputes and use the BBB’s Code of Advertising as guidance. While we blog here primarily on NAD cases, it’s worth noting that significantly more cases are heard at the local level. According to Advertising Age, in 2014 the NAD heard 140 advertising cases—compared to the more than 11,000 advertising review cases heard at the local BBB level.
The BBB has also recently announced changes its Business Review ratings system for accredited businesses. The changes went into effect January 21, and include a modification of the BBB’s algorithm for assigning letter grades to businesses. Significant changes to the way ratings are calculated include allowing older complaints to ‘age out,’ having resolved complaints carry a less negative impact on the database, giving recognized patterns of complaints greater weight, and determining business size by total revenue.