Thursday, October 18, 2007

Advertising Industry Board Revises Self-Regulatory Procedures

This posting was written by William Zale, Editor of Do's and Don'ts in Advertising.

The Board of Directors of the National Advertising Review Council (NARC) has approved revisions to the policies and procedures that guide the advertising industry’s system of self regulation.

The revisions, effective immediately, include (1) the expansion of the categories of case dispositions reported by the National Advertising Division (NAD) of the Council of Better Business Bureaus, (2) the implementation of a filing fee for competitive challenges brought before the Electronic Retailing Self-Regulation Program, and (3) an increase in the filing fee for appeals before the National Advertising Review Board.

New Reporting Category

Prior to the revisions, NAD decisions have reported that the advertising claims at issue were “substantiated” or should be “modified” or “discontinued.” Changes to the procedures allow the NAD to report that claims at issue are “substantiated in part/discontinued in part.”

“The new reporting category will allow us to more accurately report the final outcome of many NAD cases,” said C. Lee Peeler, NARC president and CEO. “In the majority of cases, the advertiser provides adequate substantiation of at least some of the challenged claims, even though NAD may also recommend that other claims be modified or discontinued.”

Electronic Retailing

The Electronic Retailing Self-Regulation Program (ERSP) was launched in 2004 when the Electronic Retailing Association (ERA) requested that NARC develop an advertising self-regulation program for the direct-response marketing industry. The ERSP examines the truth and accuracy of claims in direct-response marketing. ERSP’s work is funded by the ERA. Under the revised procedures, non-ERA member companies filing a claim will pay a fee of $2,500.

Filing Fees for Appeals

The Board also approved an increase in filing fees for appeals brought before the National Advertising Review Board (NARB), the appellate body for the advertising industry’s system of self regulation. The filing fees for appeals were increased from $1,000 to $1,500 for members of the Council of Better Business Bureaus and from $2,000 to $2,500 for non-members of the Council.

The revised procedures appear in full text in the Do’s and Don’ts in Advertising, a two-volume, monthly reporter of the Council of Better Business Bureaus.

Through a partnership with the CBBB, Do’s and Don’ts in Advertising is being published by Wolters Kluwer Law & Business. Further details regarding the publication are available at the CCH Online Store.

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