Cosmetic Claims Moving Away From "Hope In A Bottle," NAD Says

National Advertising Division attorneys say cosmetic product claims they have reviewed over the past five years have become more performance-based in nature and less about "hope in a bottle."

NAD Director Andrea Levine addressed that development during the Council of Better Business Bureaus division's annual conference in New York Oct. 6.

By making specific claims on their performance, cosmetic and personal-care marketers accept the burden of substantiating those results, though many fail to do so prior to NAD reviews.

In their reviews, NAD attorneys weigh evidence from advertisers and challenging firms to determine whether specific ad claims are substantiated. Without substantiating evidence, advertisers are advised to modify or discontinue certain claims.

The number of cosmetic, beauty and toiletry product claim reviews by NAD and other CBBB divisions reached 19 in 2007 and 11 in 2008.

Using Testimonial Advertising

A recurring issue in NAD reviews of cosmetic and other product claims is the use of testimonials and endorsements, according to the attorneys.

The Federal Trade Commission recently updated its guidelines for using testimonials and endorsements in ads, in part to make clear that atypical results disclaimers - fine-print stating that the touted results from use of a product or service are not typical - do not exonerate an otherwise misleading message.

"That is the law. It was never intended that advertisements using testimonials would be subject to a lesser standard," FTC Bureau of Consumer Protection Chief David Vladeck said during an Oct. 5 presentation opening the NAD conference.

"That has been a fundamental problem with this form of advertising. Endorsements and testimonials too often convey results that consumers would never achieve," he added.

NAD also is focusing increasingly on advertorials and the posting of ad content on blogs.

"As advertising proliferates in new and different mediums and different forms and [as] advertisers become increasingly more creative in their attempts to reach the audience, sometimes it's not clear whether it's an ad," senior attorney Mark Levine observed.

But NAD expects firms to let consumers know when they are taking in promotional material. "The burden [is] on them to make sure to make clear to consumers that it's an ad," he said.

Vladeck said that in response to the way in which many courts are interpreting current FTC orders -allowing marketers to sustain questionable claims - the commission is looking to strengthen its enforcement by "crafting more precise injunctive language for future orders."

"We need to ensure that our orders are enforceable and that claims are substantiated, and we will make changes to make sure that happens," he said.

Another consumer protection priority for FTC is enforcement against online businesses making unsubstantiated claims or unauthorized charges to customers' credit cards.

Vladeck said FTC has brought multiple actions against online firms, but the problem is growing. "We will be looking closely at the tactics of these online marketers, trying to develop new tactics to ferret out and disable these abuses," he said.

Despite the growing number of issues that surface in the self-regulation process, Lesley Fair, a senior attorney in FTC's Division of Consumer and Business Education, lauded advertisers' efforts in complying with the program.

She added that companies' efforts in the program are also working to their benefit, as the self-regulation process helps bridge knowledge gaps that often exist between a company's R&D and marketing departments.

Still, some firms need a push to cooperate with NAD. "You might just magically and miraculously see that their ad claims have changed shortly after their case comes to FTC," Fair quipped.

FTC says it willingly allows advertisers referred to the commission to return to the NAD process to resolve issues and avoid possible regulatory fines or actions.

- Malcolm Spicer ( ¹ [email protected] )