advertising regulations exist in order to quizlet

* The FTC has many remedies to regulate deceptive or untruthful advertising: because the company is in weak financial condition, the treasurer instructs the company claims manager to delay recording several large claims settlements. C. equity The representation, omission or practice must be material. WebAdvertising is not equally productive for firms in every market type. C. are issued by the Federal Trade Commission. Litigated Orders and Injunctions: 8. E. Central Hudson Test, Federal regulation of advertising originated in 1914 with the passage of the _____ Act. The order is published and made final in 60 days. The FTC enforces rules regarding endorsements of products and services by consumers, celebrities, experts and organizations. D. Electronic Retailing Self-Regulation Program (ERSP). D. misrepresentation Its cost of goods sold is 75 percent of sales, and it finances working capital with bank loans at an 8 percent rate. Injunctive power to immediately halt advertising campaigns that could cause harm to consumers Advertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. *3. 2 & -3 \\ that has no correct answer. *There are only a handful of reasons that a judge can use to overturn the commission decision. -establish new insurance laws, establish continuing education requirements, which of the following is true concerning the proceeds of a life insurance policy? The court addded that the rule imposes "no burden on speech other than requiring airlines to disclose the total price consumers will have to pay. Advertisers need to take special care when dealing with testimonials and endorsements. -What's happening now needs to stop immediately -establish continuing education requirements 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." A. cease-and-desist. The FTC usually requires an advertiser to substantiate claims that go beyond those permitted by the guides or may even bring a false advertising action against the business. tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. 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. If Parramore could lower its inventories and receivables by 10 percent each and increase its payables by 10 percent, all without affecting sales or cost of goods sold, what would be the new CCC, how much cash would be freed up, and how would that affect pretax profits? 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 ___________. C. selective retention. As originally written, the law prevented only one advertiser from making false statements about his or her own goods. D. advertisers who want to use misleading wording in their ads. Since advertising campaigns are ephemeral , the FTC often has difficulty in catching up with the advertiser before the short-lived campaign has been replaced with something else. Although that slogan at first may seem to benegit the entire beef and cattle industry, a number of cattle producers objected to it because, as the Supreme Court put it, "the advertising promotes beef as a generic commondity, which, they ccontended, impedes their efforts to promote the superiority of, inter alia, American Beef, grain-fed beef, or certified Angus or Herefore beef." A. 4. D. affirmative disclosure order The publicity can do more harm to the advertiser than a monetary fine. Direct Marketing Reform Act. The government's interest in reducing the amount of alcohol consumed by young people is a laudable goal, a unanimous Supreme Court said, but added that there is really no evidence this rule advances the goal. in this situation, the treasurer may be found guilty of which of the following? 7. -The test of false advertising, for years a complex configuration of criteria, was reduced to basically 3 parts: -establish insurer rates -term life policies are the only type of insurance that allows policy loans -policy owner Central Hudson 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. Advertising Practices found to be unfair or deceptive 3. Federal Trade Commission. A. an insurance company needs to obtain personal information from a third party concerning an applicant. A. U.S. Court of Appeals can review all commission order.s D. Bureau of Alcohol, Tobacco, and Firearms B. speech that promotes a commercial transaction. B. FTC Improvements Act Subjective statements of opinion about a product's quality Falsely implying that a test is scientifically conducted. *Consumers, as opposed to competitors, have a much more difficult time in maintaining an action for false advertising. The regulation of deceptive or untruthful advertising is a difficult task maintained by the advertising industry, the mass media and governmental agencies. Staff attorneys at the FTC will issue a complaint against the advertiser, and a hearing will be held before an administrative law judge. D. Department of the Interior (DOI) The government justified the rule by arguing that it sought to discourage young drinkers from buying a particular beer or malt liquor because it had the highest alcohol content. A. 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. pat owns a 20-pay life policy with a paid-up dividend option. D. U.S. Department of Welfare Federal Trade Commission If they can find none, the case ends. A. a commercial is rejected at the storyboard stage. 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." D. uses any superlatives. Consent agreement E. requiring the consumer to pay a consideration. Children If you advertise directly to children or market kid-related products to their parents, its important to comply with truth-in-advertising standards. 1. -Injunctions Substantiation: * Federal Trade Commission B. implied uniqueness -person's net income 1. If an advertiser refuses to comply with rulings made by the National Advertising Review Board (NARB), the NARB is most likely to: -It was easier to block a competitor's claims than to win damages, because in order to gain a monetary award the plaintiff had to show specific monetary loss, something that is often difficult to do given the nebulous nature of advertising claims and the forces that motivate a consumer to buy a specific brand of a product. The U.S. Supreme Court turned back a challenge to the appellate court's ruling, thus bringing an end (at least for the time being) to telemarketers' efforts to invoke free speech arguments to have the popular ban on unwanted phone solicitations declared unconstitutional. D. NARC can handle cases at lower cost as compared to a court. It is also important to remember that an ad may mislead because it omits material information. \end{array}\right]+\left[\begin{array}{ll} Weba. D. Cease-and-desist orders Substantiation of advertisements, in which the advertiser must prove all claims made in an advertisement -if you send spam (unsolicited messages) there must be an opt-out option D. advertising deregulation The basis of the program is simple: The commission asks advertisers to substantiate claims made in their advertisements. C) It involves underpricing products so that companies make larger sales. C. not requiring consumers to make a purchase as a condition for entering. Substantiation D. FDA Act C. the Better Business Bureau may sue Acme if it cannot substantiate its claims. Department of Justice (DOJ) *Remember, a mass medium is permitted to reject any content it chooses, with or without a reason. The federal Lanham Act was adopted more than 60 years ago by Congress to stop unfair competition in the marketplace. These guides are policy statements that alert businesses to what the agency believes are permissible advertising claims or practices. E. the consumers may sue the company for non substantiation of the ad. Trade regulation rules have had a great deterrent effect, as they comprehensively delimit what constitutes an illegal practice. C. Electronic Retailing Agency. A. U.S. B. D. The Supreme Court has ruled that professionals such as attorneys, dentists and physicians have the right to advertise. D. a commercial is approved at the storyboard stage but then is rejected after it is produced. [4320]+[wyxz]=[2035]. Injunctions: 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 This requirement falls under the FTC's _____ requirement. D. Food and Drug Administration. The law is not designed to protect the foolish or the "feeble minded," the commission has noted. Although truthful advertising for lawful goods or services receives some First Amendment protection, the extent and scope of that protection is more limited when compared with ___________________. B. D. Trademark Improvements Act Bureau of Economics -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. C. consumers recognize puffery and don't believe it. B. These (like the Sherman Act) were made to protect consumers and promote competition in the marketplace. 1. Worked, however, some companies then decided to just merge together. SUMMARY: WebAdvertising regulations exist to Assure full and truthful disclosures to the public An agent has committed an insurance crime that violates US code 1033 (interstate commerce). -insured all commercial e-mail messages must contain either a functioning return e-mail address or an "opt-out" mechanism. Guides or advisory opinions that attempt to outline in advance what advertisers may say about a product -joint period of time after the premium is due but the policy remains in force. C. National Advertising Review Board B. affirmative disclosure 57a, empowers the Commission to promulgate trade regulation rules with the force and effect of law that "define with specificity" acts or practices that the Commission finds, based on substantial evidence in the rulemaking record, are prevalent and are unfair or deceptive. -waiting period Most newspapers ship at least a few copies across state lines. Three major divisions of the Federal Trade Commission are the Bureaus of: D. corrective advertising. -treatment for alcoholism -Court said overbroad and law shut down He drives every day and never drives the same car two days in a row. -beneficiaries The _____ made it easier for Chevron to sue Texaco for this perceived misrepresentation. C. not requiring consumers to make a purchase as a condition for entering. -short-term disability D. fairness. National Advertising Review Board Department of Foreign Affairs E. injunction. The company must conduct careful studies to provide support for the claim because: Marketers only need to engage in environmental scanning if they are promoting eco-friendly or "green" products. E. Network standards have become more stringent in response to competition from independent and cable stations. -5 commissioners, appointed by the President, including the chair man -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 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. (you have to scroll down to be able to see it) Whereas commercial speech typically receives limited First Amendment protection. 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. E. an illegal comparative advertisement. Way back in the 1800s, there were several giant businesses known as Trusts that controlled whole sections of the economy. The FTC can seek an injunction to stop advertisements that it believed violated the law. -is available to the public A. A. U.S. A. misinterpretation For some specialized products or services, additional rules may apply. C. Fairness Doctrine Instead, the FTC's guides would be revised such that testimonials that do not depict typical consumer experiences should be accompanied by a clear and conspicuous disclosure of the results consumers can generally expect to achieve from the advertised product or program. WebA life insurable policy's advertising material MUST contain all of the following information EXCEPT: Agent's commission. National Advertising Review Board E. Puffery is only illegal if it eliminates a competitive advantage. B. Lanham Act *Qualifying disclosures must be legible and understandable, the FTC has ruled. In an article on the CAN-SPAM Act, attorneys Glenn B. Manishin and Stephanie A. Joyce identify 5 specific components of the law: C. Affirmative Disclosure D. multiple interpretations. Weban insurance applicant has made a false statement on the application that will affect the insurer's decision on whether or not to issue the policy. The act or practice must be considered from the perspective of a consumer who is acting reasonably. The advertiser can agree to sign the agreement, and the commissioners vote to accept this agreement. * Voluntary compliance A. A. Virginia Consumer Council Test C. the findings of marketing research studies. Commercial speech is most accurately defined as: A. Wheeler-Lea Amendment Telephone Consumer Protection Act of 1991. * which of the following is CORRECT regarding the death benefit amount? 0 & 5 -dental care. WebThus, state and local governments remain free to regulate the time, place or manner, but not the content, of advertising and promotion of all non-cigarette tobacco products, subject to possible judicial review relating to the First Amendments protections of commercial speech. Nor were there limits on the words a brewer could use to describe these products. Nevada allowing prostitution in some counties, Airline tickets having to prominently show total price, and Baltimore ordinance banning alcohol ads near children's facilities are all about ________________________. Texaco claimed its ClearSystem gasoline cleaned car engines, boosted mileage, and reduced pollution emissions better than any other gas. All of these are included in the DTPA under trade and commerce . Champion Sportswear has developed a "Super Bowl Sweepstakes" that it plans to promote. -set sales quota C. Department of Commerce (DOC) Federal Communications Commission D. National Association of Broadcasters A. -There was no substantial state interest. The guides are of great benefit, however, to honest advertisers who seek to stay within the boundaries of what is allowable under the law. In doing this, the advertiser makes no admission and the agency no determination that the claim is deceptive. A. The FTC alleged that when tickers went on sale February 2, 2009, for Bruce Springsteen concerts in May and June that year, Ticketmaster displayed a "No Tickets Found" message on its Web page to consumers to indicate that no tickets were available at that moment to fulfill their request. B. creative boutiques, copywriters, and consumers. D. any advertising on a broadcast media. Bureau of Economics SUMMARY: Deceptive advertising -does not include political calls or spam artists The commission evaluates the entire advertisement when examining it for misrepresentation. These statutes protect consumers from predatory business practices by ensuring fair competition exists. E. can be substantiated. In 1938 Congress adopted the Wheeler-Lea Amendment to the Trade Commission Act, which gave the FTC the power to proceed against all unfair and deceptive acts or practices in commerce, regardless of whether they affect competition. C. Godiva claims that it makes the finest chocolates in the world. It has its own standards of practice and creative code. SUMMARY: General FTC Advertising Rules. D. discourage comparative advertising. An advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. An entire industry can be treated similarly, and just one or two businesses are not picked out for complaint. B. ad substantiation. w & x \\ E. fraud, Which of the following is one of the two of the factors the FTC considers in evaluating an ad for deception? 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 agency believes the typical reasonable consumer does not take such claims seriously and thus they are unlikely to be deceptive. Ocean Spray Cranberry Juice. Unfairness Since the mid-1970s commercial advertising has been given the qualified protection of the First Amendment because much advertising contains information that is valuable to consumers. Magazines E. noncompetitive advertising. These claims can be viewed as deceptive under the FTC's requirement of: Newspapers, magazines, broadcasting stations, online service providers and other mass media all have rules that regulate the kind of advertising they carry. 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. advertising regulations exist in order to quizlet. -subrogation. Corrective Advertising Federal Trade Commission's (FTC's) _____ program required advertisers to have supporting documentation for their claims and to prove the claims are truthful. In the past, after the commission issued a cease and desist order, businesses frequently attempted to undertake practices that fell just outside the narrow boundaries of the order. -policy owners from misrepresentations and loss of benefits C. Affirmative Disclosure Privacy on the internet-in particular, companies and advertisers tracking and monitoring the Web sites consumers visit-is now a major concern of the FTC. B. speech that promotes a commercial transaction. The problem for Roommates.com was that it solicited specific content from users and forced them to use pull-down menus with questions featuring specific answer options in which they could express illegal and discriminatory views. C. a cease-and-desist order. C. a commercial is rejected for reasons such as sex and politics. E. Independent Business Alliance, D. Electronic Retailing Self-Regulation Program. -statements that dividends are not guaranteed Litigated orders In brief, Roomates.com was more akin to a publisher or speaker rather than a mere conduit for the information that it posts. C. Direct Selling Association Act. A. misleading omission A. both an encoding and a decoding tool for communications. Commercial Speech Doctrine. Marketing Orders are a binding regulation for the entire industry in the specified geographical area, once it is approved by the producers and the Secretary of Agriculture. The substantiation does not have to be in the ad itself. Federal Communications Commission Congress decided a special agency was needed to stop unfair business practices. One of the most pervasive and annoying forms of advertising today is on the ________________. What message, either explicitly or implicitly, does the ad convey? C. Cease-and-Desist D. Federal Trade Commission C. National Advertising Review Board C. children, advertisers, and agencies. Congress shall make no laws "abridging the freedom of speech, or of the press", Criteria for Judging whether Prior Restraint is Justified. Competition C. not require that consumers make a purchase of one of their products as a condition for entering the sweepstakes. Food and Drug Administration -person's hire date C. Lanham Act B) It can be profitably used when the product's quality and image support its price. Imagine that a company is nearing the end of an advertising campaign in which it has advertised that its mouthwash can prevent a consumer from getting a common cold. A. -person's health claim Information, Health Chapter 10 Exam - NJ Laws and Rules, Health Policy Provisions, Clauses & Riders, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Critical Point Personal hand hygiene, garbing. B. E. lodge a class action suit for customers who have been in some way negatively affected by the ad. 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.". If you respond by pressing any number, it will probably lead to more robocalls.". Presence of superlative words in the advertisement C. avoid self-regulation. D. Federal Trade Commission Section 43(a) creates a legal cause of action for false advertising. B. The use of mock-ups and props to demonstrate visually a quality that is material to the sale of a product. The ___________________________________ is the primary agent of the government, but clearly not the only agent. (c) How do we test a binary predictor for significance? Information Technology Act (ITA). D. Advertising deregulation E. Information Technology Act. WebAdvertisers are often supportive of voluntary self-regulation because: A. self-regulation is viewed as a way of limiting government interference of advertising. The Better Business Bureau guidelines What is the role of the leader and follower in the leadership process? A life insurance policy sold in Louisiana can be contested by the insurer only during the first ____ years of the contract. The advertiser admits no wrongdoing by signing such an order, so there is no liability involved. In other words, the creators of ads should be wary of creating false implications. *Attorneys for the FTC can seek these restraining orders in federal court. In 2007, the FTC requested public comment on its "Guides Concerning the Use of Endorsements and Testimonials in Advertising," and proposed several minor revisions to its guides, including, among others, clarification that when determining whether statements in an ad constitute an endorsement, it does not matter whether the statements made by an endorser are identical to or different from those made by the sponsoring advertiser. 3. Voluntary compliance: 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." 3 sections of the act expanded the remedies the FTC can use against deceptive advertising. WebStudy with Quizlet and memorize flashcards containing terms like Any administrative action taken against a producer MUST be reported to the director within ___ days after the final disposition., How many days notice does the Affordable Care Act require insurers to give before rescinding coverage?, According to the Affordable Care Act, new health Insurance The statute, set forth at 15 U.S.C. Therefore, it is consistent with the limits the First Amendment imposes on laws restricting commercial speech.". B. provides for the review and evaluation of all child-directed advertising. -submit to the replacing insurer a list of the policies to be replaced B. C. Godiva claims that it makes the finest chocolates in the world. In fiscal year 2012, the FTC had more than 1,000 full-time employees and a budget of $313 million. Which type of life insurance policy is this? Suggesting that a trivial difference is important. Since these firms have differentiated products, they Is this message false or misleading? B. A. B. So, in 19114 the Clayton Act was put in place to stop them. Significant omission of important information The _____________________________ is why commercial speech gets First Amendment protection (in chapter 2), ____________________ in _______ - made it a misdemeanor for a publication for advertising for an abortion (a weekly magazine gave a doctor's name to schedule an abortion -partially insured

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