Purpose of the program:
- Improve consumer confidence.
- Demonstrate to the FTC the industry is committed to effective and meaningful self-regulation.
- Provide a quick and efficient process to review egregious advertising claims.
Benefits to ERA members:
- Create a level playing field amongst industry professionals.
- Keep media costs level.
- Increase industry credibility and pride.
Federal Trade Commission’s opinion on ERA’s Self Regulation Program:
The FTC has reviewed our plan and generally is very favorable of it as they share the Electronic Retailing Association's frustration that a few bad players taint the direct response industry. The FTC has made it clear however, that our members should understand that this is not a “free pass.” In other words, advertising that meets the standards of the review process may still be subject to challenge by the FTC and others. They may in some cases challenge things that our plan does not evaluate. For example, our review process will not extensively examine clinical trials, etc. as the FTC in perhaps certain circumstances.
How is the program structured?
Advertising Self-Regulatory Council (ASRC) provides policy oversight to the program, is administered by the Council of Better Business Bureaus, and is sponsored by the Electronic Retailing Association. However, this program works independently of the ERA and the ERA Board of Directors in order to create an unbiased self-regulatory support system for the electronic retailing industry.
Will all advertising campaigns be reviewed?
The majority of campaigns reviewed will be long and short form infomercials. The review however will apply to all aspects of a marketing campaign, including radio and internet marketing efforts. Further, SPAM emails along with website pop-ups that lead to further internet marketing efforts are in ERSP's purview as well. In addition, advertising on TV shopping channels will be subject to review.
How are advertising or programs referred?
There are a couple of ways that advertising can be referred:
- An ERA Member or another competitor may refer a campaign.
- A consumer or advocacy group may refer a campaign.
- Through ERSP's own on-going monitoring system.
- ERA will not refer advertising.
How many campaigns will be reviewed in a month?
It is difficult to know at this time but ERA believes approximately 7–10 campaigns a month. Remember, this review will not be as extensive as the NAD process and, therefore, more cases can be reviewed.
Will the marketer know that their campaign is being reviewed?
A dialogue with the marketer is integral in the ERSP inquiry process. An opening letter is sent to the marketer with specific core claims in the advertising that ERSP has concerns about. The marketer then has 15 days to submit a response in regards to those claims. After reviewing the substantiation provided by the marketer, ERSP then again goes back to the marketer with further questions. After receiving the marketer's 2nd response, ERSP writes a decision with its recommendations an the marketer is given the opportunity to respond to the decision.
All reviews will be completed within no more than 60 days as outlined in the ERSP Policy and Procedures.
What happens next?
If the campaign being reviewed is found to be in compliance, no further action is taken and the marketer will be notified of the outcome. The marketer may not, however, use this decision in any of their marketing material.
If more information is requested, the marketer has 15 days to provide the information. The only information required would be supporting evidence that is directly relevant to the concerns. If the marketer fails to provide the information, the program administrator will assume that the program is noncompliant. The marketer may also request a meeting. All reviews will be completed within no more than 60 days.
What happens if a campaign is noncompliant?
The marketer is notified in the ERSP decision of the reasons why it feels modifications need to be made and given the opportunity to withdraw the campaign or make changes. If the marketer fails to comply within what ERSP deems as a reasonable amount of time, the program will be referred to the appropriate government agency.
Is there an appeal process?
There is no appeal process.
What will the FTC do with cases that are referred?
The FTC has indicated that they will give these cases more priority over others due to initial work.
What will be looked for when reviewing a program?
ERSP deals with the core claims at issue. In its review of the claims in a specific advertisement, it will request evidence that supports claims made in the advertisement or program.
Substantiation of claims:
Does the substantiation address the claims being made?
Does the substantiation meet general standards of competent and reliable scientific evidence?
Will the results of these reviews be made public?
Yes, all final decisions and related press releases are found on both the ASRC website and on ERA's own website, along with being included in the weekly ERA newsletter.
Can an ERA member remain in the association if their campaign in found to be noncompliant?
If the member takes corrective action that is satisfactory or pulls the program all together, then that company can remain a member. If, however, they fail to adhere to the decision, they will be expelled from the membership.
What about the service providers? Will they be able to conduct business with companies that have noncompliant programs?
ERA suppliers will have the benefit of information that will assist them in making decisions regarding whether to do business with those companies that do not adhere to these decisions. ERA hopes that membership chooses not to do business with violators.