PC-SIG: Essential Home & Business/PC-SIG - Essential Home and Business Collection.iso/25/3/9/LHARC1.EXE/PART255.STB

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PART 255 -- GUIDES CONCERNING USE OF ENDORSEMENTS AND  TESTIMONI-
ALS IN ADVERTISING

Sec.
255.0     Definitions.
255.1     General considerations.
255.2     Consumer endorsements.
255.3     Expert endorsements.
255.4     Endorsements by organizations.
255.5     Disclosure of material connections.

     AUTHORITY:  38 Stat. 717, as amended: 15 U.S.C. 41-58.

255.0 Definitions.

     (a) The Commission intends to treat endorsements and  testi-
monials  identically  in the context of its  enforcement  of  the
Federal Trade Commission Act and for purposes of this part.   The
term  "endorsements" is therefore generally used  hereinafter  to
cover both terms and situations.

     (b)  For purposes of this part, an "endorsement"  means  any
advertising message (including verbal statements, demonstrations,
or depictions of the name, signature, likeness or other identify-
ing personal characteristics of an individual or the name or seal
of an organization) which message consumers are likely to believe
reflects  the  opinions, beliefs, findings, or  experience  of  a
party  other  than the sponsoring advertiser.   The  party  whose
opinions, beliefs, findings, or experience the message appears to
reflect  will  be called the endorser and may be  an  individual,
group or institution.

     (c) For purposes of this part, an "expert" is an individual,
group or institution possessing, as a result of experience, study
or  training, knowledge of a particular subject, which  knowledge
is superior to that generally acquired by ordinary individuals.

     Example  1:  A film critic's review of a movie is  excerpted
in an advertisement.  When so used, the review meets the  defini-
tion of an endorsement since it is viewed by readers as a  state-
ment  of  the  critic's own opinions and not those  of  the  film
producer, distributor or exhibitor.  Therefore, any alteration in
or  quotation from the text of the review which does  not  fairly
reflect  its substance would be a violation of the standards  set
by this part.

     Example  2:   A  TV  commercial  depicts  two  women  in   a
supermarket buying a laundry detergent.  The women are not  iden-
tified outside the context of the advertisement.  One comments to
the other how clean her brand makes her family's clothes, and the
other then comments that she will try it because she has not been
fully  satisfied  with  her own brand.   This  obvious  fictional
dramatization  of a real life situation would not be an  endorse-
ment.

     Example  3:  In an advertisement for a pain remedy,  an  an-
nouncer  who is not familiar to consumers except as  a  spokesman
for  the advertising drug company praises the drug's  ability  to
deliver fast and lasting pain relief.  He purports to speak,  not
on the basis of his own opinions, but rather in the place of  and
on  behalf of the drug company.  Such an advertisement would  not
be an endorsement.
     Example 4:  A manufacturer of automobile tires hires a  well
known professional automobile racing driver to deliver its adver-
tising message in television commercials.  In these  commercials,
the  driver speaks of the smooth ride, strength and long life  of
the tires.  Even though the message is not expressly declared  to
be  the personal opinion of the driver, it may nevertheless  con-
stitute an endorsement of the tires.  Many consumers will  recog-
nize  this individual as being primarily a racing driver and  not
merely a spokesman or announcer for the advertiser.  Accordingly,
they  may well believe the driver would not speak for an  automo-
bile  product unless he/she actually believed in what he/she  was
saying and had personal knowledge sufficient to form that belief.
Hence they would think that the advertising message reflects  the
driver's personal views as well as those of the sponsoring adver-
tiser.   This attribution of the underlying views to  the  driver
brings the advertisement within the definition of an  endorsement
for purposes of this part.

     Example 5:  A television advertisement for golf balls  shows
a  prominent and well-recognized professional golfer hitting  the
golf  balls.   This would be an endorsement by  the  golfer  even
though he makes no verbal statement in the advertisement.

[40  FR 22128, May 21, 1975, as amended at 45 Fr 3872,  Jan.  18,
1980.]

255.1 General considerations.

     (a)  Endorsements must always reflect the  honest  opinions,
findings,  beliefs, or experience of the endorser.   Furthermore,
they  may not contain any representations which would  be  decep-
tive,  or  could  not be substantiated if made  directly  by  the
advertiser. [See Example 2 to Guide 3 (255.3) illustrating that a
valid  endorsement may constitute all or part of an  advertiser's
substantiation.]

     (b) The endorsement message need not be phrased in the exact
words of the endorser, unless the advertisement affirmatively  so
represents.   However, the endorsement may neither  be  presented
out  of  context  nor reworded so as to distort in  any  way  the
endorser's opinion or experience with the product.  An advertiser
may use an endorsement of an expert or celebrity only as long  as
it  has  good reason to believe that the  endorser  continues  to
subscribe to the views presented.  An advertiser may satisfy this
obligation by securing the endorser's views at reasonable  inter-
vals  where reasonableness will be determined by such factors  as
new  information  on  the performance  or  effectiveness  of  the
product,  a  material alteration in the product, changes  in  the
performance  of competitors' products, and the advertiser's  con-
tract commitments.

     (c)  In particular, where the advertisement represents  that
the  endorser uses the endorsed product, then the  endorser  must
have been a bona fide user of it at the time the endorsement  was
given.   Additionally,  the advertiser may continue  to  run  the
advertisement only so long as he has good reason to believe  that
the  endorser  remains  a bona fide user of  the  product.   [See
255.1(b) regarding the "good reason to believe" requirement.]

     Guide  1,  Example 1:  A building contractor  states  in  an
advertisement  that he specifies the advertiser's exterior  house
paint  because of its remarkable quick drying properties and  its
durability.   This  endorsement must comply  with  the  pertinent
requirements   of   Guide  3.    Subsequently,   the   advertiser
reformulates  its paint to enable it to cover  exterior  surfaces
with  only one coat.  Prior to continued use of the  contractor's
endorsement, the advertiser must contact the contractor in  order
to determine whether the contractor would continue to specify the
paint and to subscribe to the views presented previously.

     Example  2:   A television advertisement  portrays  a  woman
seated  at a desk on which rest five unmarked electric  typewrit-
ers.  An announcer says "We asked Mrs. X, an executive  secretary
for  over ten years, to try these five unmarked  typewriters  and
tell us which one she liked best."

     The  advertisement  portrays the secretary  typing  on  each
machine, and then picking the advertiser's brand.  The  announcer
asks  her why, and Mrs. X gives her reasons.  Assuming that  con-
sumers  would perceive this presentation as a "blind" test,  this
endorsement  would  probably not represent that Mrs.  X  actually
uses  the  advertiser's machines in her work.  In  addition,  the
endorsement may also be required to meet the standards of Guide 3
on Expert Endorsements.

[Guide 1]

[45 FR 3872, Jan. 18, 1980]

255.2 Consumer endorsements.

     (a) An advertisement employing an endorsement reflecting the
experience of an individual or a group of consumers on a  central
or key attribute of the product or service will be interpreted as
representing that the endorser's experience is representative  of
what consumers will generally achieve with the advertised product
in actual, albeit variable, conditions of use.  Therefore, unless
the advertiser possesses and relies upon adequate  substantiation
for this representation, the advertisement should either  clearly
and  conspicuously disclose what the generally expected  perform-
ance  would be in the depicted circumstances or clearly and  con-
spicuously  disclose the limited applicability of the  endorser's
experience  to  what consumers may generally expect  to  achieve.
The Commission's position regarding the acceptance of disclaimers
or  disclosures  is  described in the preamble  to  these  Guides
published in the FEDERAL REGISTER on January 18, 1980.

     (b)  Advertisements  presenting  endorsements  by  what  are
represented, directly or by implication, to be "actual consumers"
should  utilize actual consumers, in both the audio and video  or
clearly  and  conspicuously  disclose that the  persons  in  such
advertisements  are  not  actual  consumers  of  the   advertised
product.

     (c) Claims concerning the efficacy of any drug or device  as
defined in the Federal Trade Commission Act, 15 U.S.C. 55,  shall
not  be  made in lay endorsements unless (1) the  advertiser  has
adequate  scientific substantiation for such claims and  (2)  the
claims are not inconsistent with any determination that has  been
made by the Food and Drug Administration with respect to the drug
or device that is the subject of the claim.

     Guide 2, Example 1:  An advertisement presents the  endorse-
ment of an owner of one of the advertiser's television sets.  The
consumer  states that she has needed to take the set to the  shop
for  repairs only one time during her 2-year period of  ownership
and  the  costs  of servicing the set to  date  have  been  under
$10.00.  Unless the advertiser possesses and relied upon adequate
substantiation  for the implied claim that such  performance  re-
flects that which a significant proportion of consumers would  be
likely to experience, the advertiser should include a  disclosure
that  either states clearly and conspicuously what the  generally
expectable  performance  would be or  clearly  and  conspicuously
informs consumers that the performance experienced by the endors-
er  is not what they should expect to experience.  The mere  dis-
closure that "not all consumers will get this result." is  insuf-
ficient  because  it can imply that while  all  consumers  cannot
expect  the advertised results, a substantial number  can  expect
them.   [See  the  cross reference in Guide  2(a)  regarding  the
acceptability of disclaimers or disclosures.]

     Example 2:  An advertiser presents the results of a poll  of
consumers  who have used the advertiser's cake mixes as  well  as
their own recipes.  The results purport to show that the majority
believed  that their families could not tell the  difference  be-
tween the advertised mix and their own cakes baked from  scratch.
Many of the consumers are actually pictured in the  advertisement
along with relevant, quoted portions of their statements  endors-
ing the product.  This use of the results of a poll or survey  of
consumers probably represents a promise to consumers that this is
the  typical result that ordinary consumers can expect  from  the
advertiser's cake mix.

     Example  3:  An advertisement purports to portray a  "hidden
camera"  situation in a crowded cafeteria at breakfast  time.   A
spokesperson  for the advertiser asks a series of actual  patrons
of  the cafeteria for their spontaneous, honest opinions  of  the
advertiser's  recently introduced breakfast cereal.  Even  though
the  words "hidden camera" are not displayed on the  screen,  and
even though none of the actual patrons is specifically identified
during the advertisement, the net impression conveyed to  consum-
ers may well be that these are actual customers, and not  actors.
If actors have been employed, this fact should be disclosed.

[Guide 2]

[45 FR 3872, Jan. 18, 1980]

255.3 Expert endorsements.

     (a)  Whenever  an advertisement represents, directly  or  by
implication,  that the endorser is an expert with respect to  the
endorsement  message, then the endorser's qualifications must  in
fact give him the expertise that he is represented as  possessing
with respect to the endorsement.

     (b) While the expert may, in endorsing a product, take  into
account factors not within his expertise (e.g., matters of  taste
or  price), his endorsement must be supported by an actual  exer-
cise  of his expertise in evaluating product features or  charac-
teristics  with respect to which he is expert and which are  both
relevant to an ordinary consumer's use of or experience with  the
product  and also are available to the ordinary  consumer.   This
evaluation  must have included an examination or testing  of  the
product at least as extensive as someone with the same degree  of
expertise would normally need to conduct in order to support  the
conclusions  presented  in the endorsement.  Where,  and  to  the
extent  that, the advertisement implies that the endorsement  was
based  upon a comparison such comparison must have been  included
in  his evaluation; and as a result of such comparison,  he  must
have  concluded that, with respect to those features on which  he
is  expert  and which are relevant and available to  an  ordinary
consumer,  the endorsed product is at least equal overall to  the
competitors' products.  Moreover, where the net impression creat-
ed by the endorsement is that the advertised product is  superior
to  other products with respect to any such feature or  features,
then the expert must in fact have found such superiority.

     Example 1:  An endorsement of a particular automobile by one
described  as an "engineer" implies that the  endorser's  profes-
sional training and experience are such that he is well acquaint-
ed  with the design and performance of automobiles.  If  the  en-
dorser's  field  is, for example, chemical engineering,  the  en-
dorsement would be deceptive.

     Example  2:  A manufacturer of automobile  parts  advertises
that  its  products are approved by the  "American  Institute  of
Science."   From  its very name, consumers would infer  that  the
"American Institute of Science" is a bona fide independent  test-
ing  organization with expertise in judging automobile parts  and
that,  as such, it would not approve any automobile part  without
first testing its efficacy by means of valid scientific  methods.
Even  if  the American Institute of Science is such a  bona  fide
expert  testing  organization,  as consumers  would  expect,  the
endorsement  may nevertheless be deceptive unless  the  Institute
has  conducted valid scientific tests of the advertised  products
and the test results support the endorsement message.

     Example  3:   A  manufacturer  of  a  non-prescription  drug
product represents that its product has been selected in  prefer-
ence to competing products by a large metropolitan hospital.  The
hospital  has  selected  the product  because  the  manufacturer,
unlike  its  competitors, has packaged each dose of  the  product
separately.  This package form is not generally available to  the
public.  Under the circumstances, the endorsement would be decep-
tive  because  the  basis for the choice  of  the  manufacturer's
product, convenience of packaging, is neither relevant nor avail-
able to the consumers.

     Example  4:   The president of a commercial  "home  cleaning
service"  states in a television advertisement that the  services
uses  a particular brand of cleanser in its business.  Since  the
cleaning service's professional success depends largely upon  the
performance of the cleansers it uses, consumers would expect  the
service  to be expert with respect to judging cleansing  ability;
and  not be satisfied using an inferior cleanser in its  business
when it knows of a better one available to it.  Accordingly,  the
cleaning  service's  endorsement must at least conform  to  those
consumer expectations.  The service must, of course, actually use
the endorsed cleanser.  Additionally, on the basis of its  exper-
tise,  it must have determined that the cleansing ability of  the
endorsed cleanser is at least equal (or superior, if such is  the
net impression conveyed by the advertisement) to that of  compet-
ing products with which the service has had experience and  which
remain  reasonably available to it.  Since in this  example,  the
cleaning  service's president makes no mention that the  endorsed
cleanser  was  "chosen," "selected," or  otherwise  evaluated  in
side-by-side  comparisons against its competitors, it  is  suffi-
cient  if  the  service has relied solely  upon  its  accumulated
experience  in evaluating cleansers without having to  have  per-
formed side-by-side or scientific comparisons.

     Example  5:  An association of professional athletes  states
in an advertisement that it has "selected" a particular brand  of
beverages  as its "official breakfast drink."  As in  Example  4,
the  association  would  be regarded as expert in  the  field  of
nutrition  for purposes of this section, because consumers  would
expect it to rely upon the selection of nutritious foods as  part
of its business needs.  Consequently, the association's  endorse-
ment  must be based upon an expert evaluation of the  nutritional
value  of the endorsed beverage.  Furthermore, unlike Example  4,
the  use of the words "selected" and "official" in this  endorse-
ment  imply that it was given only after direct  comparisons  had
been performed among competing brands.  Hence, the  advertisement
would  be deceptive unless the association has in fact  performed
such  comparisons  between  the endorsed brand  and  its  leading
competitors in terms of nutritional criteria, and the results  of
such  comparisons  conform to the net impression created  by  the
advertisement.

[Guide 3]

[40 FR 22128, May 21, 1975]

255.4 Endorsements by organizations.

     Endorsements  by organizations, especially expert ones,  are
viewed  as representing the judgment of a group whose  collective
experience  exceeds  that  of any individual  member,  and  whose
judgments  are generally free of the sort of  subjective  factors
which vary from individual to individual.  Therefore an organiza-
tion's endorsement fairly reflects the collective judgment of the
organization.   Moreover,  if an organization is  represented  as
being expert, then, in conjunction with a proper exercise of  its
expertise  in  evaluating the product under 255.3  of  this  part
(Expert  endorsements),  it  must utilize an  expert  or  experts
recognized  as such by the organization or  standards  previously
adopted by the organization and suitable for judging the relevant
merits of such products.

     Example:   A mattress seller advertises that its product  is
endorsed  by a chiropractic association.  Since  the  association
would  be regarded as expert with respect to judging  mattresses,
its  endorsement must be supported by an expert evaluation by  an
expert  or experts recognized as such by the organization, or  by
compliance with standards previously adopted by the  organization
and  aimed at measuring the performance of mattresses in  general
and not designed with the particular attributes of the advertised
mattress in mind (See also 255.3, Example 5.)

[Guide 4]

[40 FR 22128, May 21, 1975]

255.5 Disclosure of material connections.

     When there exists a connection between the endorser and  the
seller of the advertised product which might materially affect he
weight or credibility of the endorsement (i.e., the connection is
not reasonably expected by the audience) such connection must  be
fully  disclosed.  An example of a connection that is  ordinarily
expected  by  viewers and need not be disclosed  the  payment  or
promise of payment to an endorser who is an expert or well  known
personality,  as long as the advertiser does not  represent  that
the  endorsement was given without compensation.   However,  when
the  endorser is neither represented in the advertisement  as  an
expert  nor  is  known to a significant portion  of  the  viewing
public,  then  the advertiser should  clearly  and  conspicuously
disclose  either the payment or promise of compensation prior  to
and in exchange for the endorsement or the fact that the endorser
knew or had reasons to know or to believe that if the endorsement
favors the advertised product some benefit, such as an appearance
on TV, would be extended to the endorser.

     Example  1:   A  drug company commissions  research  on  its
product by a well-known research organization.  The drug  company
pays a substantial share of the expenses of the research project,
but the test design is under the control of the research  organi-
zation.  A subsequent advertisement by the drug company  mentions
the research results as the "findings" of the well-known research
organization.   The  advertiser's  payment  of  expenses  to  the
research  organization need not be disclosed in  this  advertise-
ment.  Application of the standards set by Guide 3 and 4 provides
sufficient  assurance  that  the advertiser's  payment  will  not
affect the weight or credibility of the endorsement.

     Example 2:  A film star endorses a particular food  product.
The  endorsement  regards  only points of  taste  and  individual
preference.   This endorsement must of course comply with  255.1;
but  even though the compensation paid the endorser  is  substan-
tial,  neither  the fact nor the amount of compensation  need  be
revealed.

     Example 3:  An actual patron of a restaurant, who is neither
known  to the public nor presented as an expert, is shown  seated
at  the counter.  He is asked for his "spontaneous" opinion of  a
new  food product served in the restaurant.  Assume, first,  that
the  advertiser had posted a sign on the door of  the  restaurant
informing  all who entered that day that patrons would be  inter-
viewed  by the advertiser as part of its TV promotion of its  new
soy  protein "steak".  This notification would materially  affect
the  weight  or  credibility of the  patron's  endorsement,  and,
therefore,  viewers  of the advertisement should be  clearly  and
conspicuously  informed  of  the circumstances  under  which  the
endorsement was obtained.

     Assume,  in  the alternative, that the  advertiser  had  not
posted a sign on the door of the restaurant, but had informed all
interviewed  customers of the "hidden camera" only  after  inter-
views  were completed and the customers had no reason to know  or
believe  that  their response was being recorded for  use  in  an
advertisement.  Even if patrons were also told that they would be
paid for allowing the use of their opinions in advertising, these
facts need not be disclosed.