A recent case provides three valuable lessons to advertisers involved in proceedings before the National Advertising Division of the Better Business Bureau (commonly referred to as the NAD). For those unfamiliar with the NAD, its mission is to review national advertising for truthfulness and accuracy. Reviews are usually commenced when an unhappy competitor files a challenge against a particular advertisement. The NAD can also institute proceedings on its own accord. In a case decided in March, the Council For Responsible Nutrition challenged ads for Serranol, which claimed to help everything from fighting immunity to joint inflammation to slowing down the aging process as well as helping erectile dysfunction and "life-threatening conditions like cancer."
In response to the challenge, the advertiser submitted scientific evidence to the NAD purporting to validate its claims. The submissions, however, were in the form of abstracts or summaries of studies showing the health benefits of the individual ingredients contained in Serranol. The manufacture had not conducted any tests on the product as a whole. The NAD afforded very little weight to these studies.
Lesson number one: This point may be review for some of you, but the NAD repeats it so frequently that it bears remembering. The gold standard of competent and reliable scientific evidence for health claims are methodologically sound human clinical trials on the advertised product itself. Tests on the individual ingredients fall short of this benchmark because they do not take into account the possible interaction that the ingredients may have when combined into the product.
Lesson number two: According to the NAD, abstracts and informal summaries of studies do not impart enough information to be considered as competent and reliable scientific evidence. An abstract or informal summary of an article is less reliable than the full text of the study, because summary documents usually do not give the reader enough insight into how the research was conducted or how the data were analyzed to objectively evaluate the quality of the research and the conclusions drawn by the authors.
As a result of these shortcomings, the NAD recommended that all of the claims for Serranol be discontinued except that it could still be touted as an edible brown algae that reduced joint inflammation. This obviously was not the outcome the advertiser was looking for, and it refused to acknowledge that it would adhere to the NAD's recommendations. Which brings us to...
Lesson number three: There is a very big potential downside to ignoring the NAD. Under the NAD's procedures, if an advertiser does not submit a statement that it will follow the NAD's ruling (subject to its right of appeal to the National Advertising Review Board), the matter gets referred to the Federal Trade Commission for review and possible prosecution. The NAD made such a referral in this case. Given the cancer-related claims made for the Serranol product, an FTC action would not be at all surprising. This referral to the FTC shows that the NAD expects full participation in its proceedings even though it is not a court of law.
PartnerScott has focused on complex commercial litigation and arbitration involving advertising and marketing law, class action defense, administrative investigations, contractual disputes, consumer fraud, and business ...