FTC Says what “Up To” MeansWritten by Richard Newman
July 22, 2012 # 7:54 pm # Legal Challenges, Specials # 5 Comments
On June 29, 2012 the Federal Trade Commission released a study regarding use of the phrase “up to” in conjunction with representations made in marketing collateral and whether the average consumer believes that they will achieve the maximum possible result or savings.
Specifically, the study describes what a test group of consumers thought about advertisements that claimed to provide “UP TO 47% savings on heating and cooling bills.” The results indicated that almost half of the respondents expected to save about 47% on their heating and cooling bills.
Why does this matter?
For one, claim substantiation. The FTC is now likely operating under the assumption that fifty-percent or more should obtain that result.
Advertisers tend to think that if one person obtains the maximum result then the claim can be safely made. However, it is crucial to remember that the starting point in a regulatory compliance analysis if to evaluate the “overall net impression from the standpoint of the reasonable consumer. Regulators evaluate the words, content, claims, photographs, placement and use of disclosures together, as a whole.
A press release from the Bureau of Consumer Protection Division following the study stated that the finding reinforces the Commission’s view that advertisers using these claims should be able to substantiate marketing claims that consumers are likely to achieve the maximum results promised under normal circumstances.
Those who desire to use the “up to” phrase going forward are well advised to consult with an Internet marketing attorney in order to assess compliance and best practice considerations regarding the dissemination of advertising creative.
While it appears that the new guidance is part of the Commission’s efforts to ensure that popular environmental marketing claims, or “green guides,” are truthful, non-misleading and based upon scientific evidence, there is a clear regulatory trend developing.
The National Advertising Division has provided more specific guidance on “up to” claims in recent decisions. The guidance offered by the recent report should be considered a warning. It is not a policy shift, but rather a specific clarification of the FTC’s ambiguous “up to” claim definition of an “appreciable number of consumers realizing the maximum advertising benefit a substantial amount of time.”
Further complicating matters is that the new guidance could potentially contradict the advertising industry’s self-regulatory “safe-harbor” that ten-percent of the users of a product must realize the maximum benefit.
Make no mistake about it. The Commission is highly-skeptical of “up to” claims. All those in the advertising stream of commerce must focus upon claim qualification and relevant, conspicuous disclosures.
Information conveyed in this interview/article is provided for information purposes only and does not constitute, nor should it be relied upon as legal advice. This information is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this article without seeking the advice of an attorney.