-total disability * In addition, many states have what are called unfair and deceptive acts and practices statutes, which give consumers the right to seek a judicial remedy in false advertising cases. Lawsuits for false advertising claims were relatively rare until the last quarter of the 20th century. The companies that received the warning letters had 15 working days to inform the FDA of the steps that they were or would be taking to correct their labels. D. advertising deregulation Food and Drug Administration If he drove the Audi today, what are the probabilities for the cars that he will drive 444 days from now? D. is concerned with the misrepresentation of premiums when used in sales promotions. Remedies for deceptive and unfair advertising, Require Substantiation Is it a violation of the First Amendment for a newspaper, magazine or broadcasting station to refuse to carry an ad? james is the insured on a life insurance policy where his age was misstated on the application. How many ads are in your general vicinity each day? B. B. require an advertiser to run comparative advertisement. D. Internet Champion Sportswear has developed a "Super Bowl Sweepstakes" that it plans to promote. -protection of proceeds against the beneficiary's creditors A. require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. the role of the federal government was expanded when Medicaid was established by allowing the state to May also argue the claim in question is not material, and therefore will not impact a purchasing decision. D. deception C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. B. Michelin advertises a 50,000-mile guarantee for its tires. A. Rarely have these challenges been successful. -Voluntary compliance WebRegulatory concerns never play a major role in the advertising decision-making process. *Child Advertising Review Unit (CARU)*. Advertising by attorneys is legal in the entire United States. The law is not designed to protect the foolish or the "feeble minded," the commission has noted. C. an illegal deception. E. a commercial is rejected at the idea generation stage. If the advertising campaign is successful and long running, a residue of misleading information remains in the mind of the public after the offensive advertisements have been removed. Children If you advertise directly to children or market kid-related products to their parents, its important to comply with truth-in-advertising standards. D. Bureau of Consumer Protection The media cannot refuse to accept advertising for an entire product class such as hard liquor. FTC Definition of False or Deceptive Advertising: This is an example of: A. advertising aimed at children is prohibited. Federal Communications Commission D. advertising substantiation Consent agreements or consent orders signed by advertisers promising to terminate a deceptive advertsiement There is a substantial state interest to justify the regulation. Use the following information. WebSection 18 of the FTC Act, 15 U.S.C. The FTC prohibits ___________________________, which it defines as "an alluring but insincere offer to sell a product to service which the advertiser in truth does not intend or want to sell. C. trade allowances 17. Tags: Question 34 . -Advertisers cannot engage in practices that discourage purchase of advertised merchandise as part of a bait scheme to sell other merchandise, such as refusing to show or sell the product offered in accordance with the terms of the offer. Federal Trade Commission WebAn orgnaization established and funded by businesses that operate primarily at the local level to monitor activities of companies andp promote fair advertising and selling according to HIPAA, this tax will not be applied if the withdrawal is used for medical expenses that exceed ___ of the individual's adjusted gross income. An advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. Web1) advertising must be truth and not misleading, with misleading ads sweeping up those in which relevant info is omitted, those that imply something that's not true and those in WebA life insurable policy's advertising material MUST contain all of the following information EXCEPT: Agent's commission. The FTC wanted to make sure consumers were not under any false impression that Doan's was a superior medication. D. Lanham Act The basic defense against any false advertising complaint is truththat is, proving that a product does what the advertiser claims it does that it is made where the advertiser says it is made, or that it is as beneficial is it is advertised to be. The act or practice must be considered from the perspective of a "reasonable consumer." -subrogation. d. generativity. B. FTC Act SURVEY . -term life policies are the only type of insurance that allows policy loans B. E. Standards and Practices Division, Which of the following media has the most stringent review and approval process for advertising? This provision of the Lanham Act was seldom used by advertisers until the 1970s. * Yes, as long as the disclosure requirments are reasonably related to the government's interest in preventing deception of consumers. In April 2013, the U.S. Supreme Court declined to hear the airlines' appeal in the case. Webset criteria of regulating advertising. B. provides for the review and evaluation of all child-directed advertising. SUMMARY: It held that an online roommate-matching service was not immune to liability under Section 230 of the CDA for posting information by others that violated the Fair Housing Act and California housing discrimination laws. Consumer Redress, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. Guides or advisory opinions that attempt to outline in advance what advertisers may say about a product Significant omission of important information. Local radio The FTC believes that the claim is deceptive. A variety of federal agencies are empowered to enforce consumer protection laws. Federal Trade Commission Pr(\operatorname{Pr}(Pr( Audi after VW) =0.8Pr(=0.8 \quad \operatorname{Pr}(=0.8Pr( Ford after VW)=0.2\mathrm{VW})=0.2VW)=0.2. The commission evaluates the entire advertisement when examining it for misrepresentation. B. The commissioners then vote on whether to issue a complaint. Ads that promote illegal goods and services, that contain claims that appear to be deceptive or are not substantiated, or that unfairly trash a competitor's products might also be ___________. -establish continuing education requirements Ads must tell they truth, not mislead (either by sins of omission or sins of express or implied misrepresentation) and be backed up with prior substantiation. D. corrective advertising. FTC Tools or Remedies to Stop False Advertising: SUMMARY: D. Cease-and-desist orders -If an ad represents that an endorser uses the product, then the endorser must have been a bona fide user of it at the time the endorsement was given and, in addition, the advertiser may continue to run the ad only so long as it has good reason to believe that the endorser remains a user of this product. Distribution . 1) Federal Trade Commission (FTC) (most active) controls unfair methods of D. Lanham Act. The Federal Trade Commission takes the position that: *Qualifying disclosures must be legible and understandable, the FTC has ruled. E. Competitor Trademark Act, Which of the following is used by many states as a basis for their advertising regulations? In addition, political robocalls--a major source of annoyance for many during the 2012 election year--and robocalls from charities seeking donations are permissible. Under the commercial speech doctrine and the Central Hudson test, the government may prohibit advertising (1) that promotes an unlawful activity or (2) that is misleading or untruthful. E. dealt with consumers' rights regarding product warranties. * Advertising must be truthful and not misleading, with misleading ads sweeping up those in which relevant information is omitted, those that imply something that's not true and those in which any disclaimers or disclosures are not clear and not prominent enough for reasonable consumers to see, hear and understand them. Writing for a 6-justice majority, Justice Antonin Scalia wrote that "the message set out in the beef promotions is from beginning to end the message established by the Federal Government" and that the secretary of agriculture "exercises final approval authority over every word used in every promotional campaign." -premium past due -presumtive disability * WebMost direct influence has been on regulation of advertising for alcoholic beverages. In addition to such legal action, the FTC also educates consumers and businesses to encourage informed consumer choices, compliance with the law and public understanding of the competitive process. It enforces the laws that prohibit business practices that are anticompetitive, deceptive or unfair to consumers, and it seeks to do so without impeding legitimate business activity. There are 2 key divisions of the Better Business Bureau's Advertising Self-Regulatory Council (ASRC), which was known until April 2012 as the National Advertising Review Council, that provide both advice to advertisers and out-of-court methods for resolving disputes about advertisements. Omitting a needed qualification. Better Business Bureau FTC's rules against deceptive advertising (2 components), 1) advertising must be truth and not misleading, with misleading ads sweeping up those in which relevant info is omitted, those that imply something that's not true and those in which any disclaimers are not clear and not prominent enough for reasonable consumers to see, hear, and understand them 2) all claims made in advertisements must be substantiated, such that before disseminating an ad, advertisers must have a reasonable basis for any and all express and/or implied product claims, with claims relating to health and safety coming under even closer FTC scrutiny that typically requires proof by competent and reliable scientific evidence. *To illustrate this point, Scalia noted that a person may not opt out of paying income taxes just because he or she soesn't agree with how the govenrment is spending the money. A television station won't advertise a sporting event that will be telecast on a competing channel. All broadcasting stations are considered to affect interstate commerce. D. fairness. B. Congress shall make no laws "abridging the freedom of speech, or of the press", Criteria for Judging whether Prior Restraint is Justified. C. the findings of marketing research studies. -is made available after paying a $50 fee. A. Magnuson-Moss Act of 1975 Q. The Printer's Ink Statutes E. Most media reject political ads. First anti-trust law was passed in 1890: the Sherman Act. B. consideration -offer the insured a 60 day free look period, submit to the replacing insurer a list of the policies to be replaced. The _____ regulates and controls the advertising of alcoholic beverages. Under the FTC's rules, several key points emerge that must be understood: D. were made legally binding by the Robinson-Patman Act. The Federal Trade Commission requires advertising for any product that is sweetened with saccharin to contain a warning that saccharin may be hazardous to one's health. E. the impact of cease-and-desist orders, Controversy over the FTC's authority to regulate unfair advertising practices began in 1978, when the agency relied on this mandate to formulate its controversial _____ rule restricting advertising to children. B. if the ad does not provide sufficient information to the consumers so as to make an informed decision. 3. A licensed producer MUST be __________ by an insurer to be the death benefit paid will be what the premium would have been purchased at the correct age, a 10% excise tax is normally applied to an early withdrawal from an IRA. E. National Association of Broadcasters. Complaints against advertisers are prepared by the FTC staff and approved by a vote of the commission. * E. the FCC is granted the right to fine advertisers who exceeded advertising limits as defined by the act. Which of the following programs is more likely to be the most controversial of all the Federal Trade Commission's programs? Under the ________ Act, a plaintiff can prove an ad is literally false if the test used to prove a claim for a product either is: 1) not sufficiently reliable to permit a conclusion; or 2) simply irrelevant. On the other hand, to the extent that spam pertains to a lawful product and is neither false nor deceptive, it constitutes commercial speech protected by the First Amendment. -may cancel the policy only at renewal -defer all costs to the federal government for public assistance programs, receive matching funds to expand public assistance programs, ownership of a life insurance policy may be temporarily transferred with a(n), replacement regulation is designed to protect the interests of Association of National Advertisers. The key elements in the FTC's definition of deception are that the representation, omission, or practice must be likely to mislead the reasonable consumer and that it has: -indemnity * -No, it is not political speech. A prepackaged milkshake sold in convenience stores advertises that it has more chocolate-taste than shakes purchased at restaurants. C. Lack of selective disclosure -conduct investigations E. puffery. ) -covered employee is terminated for gross misconduct, a covered employee who is terminated for gross misconduct. Several other companies received similar letters in 2010 from the FDA regarding front-panel "no trans fat" claims that failed to disclose significant levels of saturated fat and total fat. E. contests and sweepstakes, Marketers' use of trade allowances is controlled by the ____, which prohibits price discrimination. An injunction is clearly a drastic remedy and one that the agency has said it will not use often. A. cease-and-desist order The challenge wad filed with NAD by a competitor of Gillette, namely Schick, which makes "Intuition Plus" razors. B. Centre for Electronic Technology. voting power on major issues and ownership in a portion of the company. A. E. the consumers may sue the company for non substantiation of the ad. E. Advertising guidelines, According to Federal Trade Commission policy, the criteria for determining _____ are (1) a trade practice causes substantial physical or economic injury to consumers, (2) could be reasonably avoided by consumers, and (3) it must not be outweighed by countervailing benefits to consumers or competition. b. D. Affirmative disclosure The origin of the Federal Trade Commission's corrective advertising program came from a deceptive advertising case involving: Corrective advertising, in which an advertiser must admit in future advertisements that past advertisements have been incorrect ______________________________________: All commercial e-mail messages must contain either a functioning return address or an Internet-based reply "opt-out" mechanism for at least 30 days after transmission of a message. A. -dental care. The FTC enforces rules regarding endorsements of products and services by consumers, celebrities, experts and organizations. The basis of the program is simple: The commission asks advertisers to substantiate claims made in their advertisements. B. a commercial that was rejected at the storyboard stage is accepted at the final stage. Under the watchful eye of the FTC, the following general advertising rules must be followed: Ads must be truthful and non-deceptive. C. a cease-and-desist order. In either case, the losing side can appeal to the federal trade commissioners for a final ruling. \end{array}\right]=\left[\begin{array}{rr} because the company is in weak financial condition, the treasurer instructs the company claims manager to delay recording several large claims settlements. The test is whether the consumer's interpretation or reaction is reasonable. President Theodor Roosevelt broke up many Trusts by making anti-trust laws. demonstrate full and truthful disclosures to the public. Importantly today, the FTC's prohibition against unfair or deceptive advertising and fraudulent marketing in any medium includes the Internet. E. advertising substantiation. B. Implied uniqueness A. The regulation of deceptive or untruthful advertising is a difficult task maintained by the advertising industry, the mass media and governmental agencies. C. Wheeler Lea Amendment to the FTC Act these are policy statements that alert businesses to what the agency believes are permissible advertising claims or practices, if the ftc believes a claim to be deceptive, the company can voluntarily agree to terminate the advertisement and never use the claim again, also known as a consent order or decree is a written agreement between the commission and the advertiser in any representations that would be deceptive or could not be substantiated if made directly by the advertiser, the commission can issue an order to stop the particular advertising claim, the commission asks advertisers to prove all the claims made in the advertisements, the ftc forces the advertiser to inform the public that in the past it has not been honest or misleading, the ftc can seek an injunction to immediately stop advertisements that it believed to violate the law; the agency will only use this power in those instances where the advertising can cause harm, these can be issued to regulate advertising through an entire industry, 1) The advertiser can agree to sign the agreement, and the commissioners vote to accept the agreement. \end{array}\right]+\left[\begin{array}{ll} -contributory In 2008 legislation was signed under which numbers placed on the list remain on it permanently unless consumers specifically request a number's removal by calling 1-800-382-1222. Substantial Omission -Advertising, as a part of the marketing mix for all products, took on more importance in the past 50 years. As a general rule, the First Amendment does not require that the government regulate all aspects of a problem before it can make progress on any front." -former depended of employee no longer of dependent status A. the New Jersey Temporary Disability Benefits Law. provides non-occupational disability benefits. A. enhance the credibility of the publication. BBB is the largest and best known self-regulatory mechanism in United States, for controlling advertising practices, that has been established by the business community. C. Newspapers -employer At times a business has challenged the FTC by arguing that its particular exposition is not an advertisement but an essay or a statement of business philosophy. d. adopted the principle of strict liability. The most commonly used FTC remedy is the consent agreement, or _____________________________. * WebLaws must be static and unyielding in order to provide stability for a society. all commercial e-mails must disclose a) it is an advertisement or solicitation, b) an opt-out mechanism, and c) a "valid physical postal address.". C. National Advertising Review Council _________________________: Spam senders are barred from transmitting commercial e-mail messages to any recipient after 10 business days following the exercise by the recipient of his or her right to opt out of future commercial e-mail messages. E. dealt with consumers' rights regarding product warranties. Ad substantiation -Comparative advertising, in which an advertiser not only promotes his or her own goods but tends to disparage the product made by a competitor, became more common. The law also gave the agency important new power. Such claims are referred to as _________________ and include representations that a store sells "the most fashionable shoes in town" or a cola drink is "the most refreshing drink around." E. Food and Drug Administration, In 1996, President Clinton signed an executive order declaring that nicotine was an addictive drug and gave the _____ broad jurisdiction to regulate the advertising of cigarettes and smokeless tobacco. A. what is an insurance policy's grace period? -survivorship, in contrast to a guaranteed renewable policy, a non cancellable policy There is a "reasonable fit" means "narrowly tailored" D. advertisers who want to use misleading wording in their ads. In 2008 the 7th U.S. C. FCC Act The burden is on the government to disprove the advertiser's claim. Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that more or less regulate the kind of advertising they will carry. A. unfairness As originally written, the law prevented only one advertiser from making false statements about his or her own goods.

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