2023 is here, but a few NAD cases published towards the end of 2022 are worth noting.
One case of interest is one initiated by NAD itself challenging express and implied claims made by Cash App, the financial services platform operated by Block, Inc., which allows users to, among other things, invest in stocks and Bitcoin. As issue were claims in a commercial featuring rap artist Megan Thee Stallion, including the statement “you’ll have your empire in no time” and “see you at the top,” along with visuals of a growing stack of gold bars, all of which the advertiser defended as puffery. Although NAD acknowledged that the statements and visuals were hyperbolic and unlikely to be understood literally, it concluded that they did convey “a message that consumers can achieve significant wealth with small investments” and that they would likely appeal to “an audience that may not be familiar with the risks associated with investing or the volatility associated with Bitcoin in particular,” particularly since the ad touts a low barrier to entry with its “invest as little as $1 on CashApp” claim. NAD also was concerned that the disclosure about the riskiness of Bitcoin investment was not clear or conspicuous. Accordingly, NAD recommended that the ad be discontinued or modified. NAD Case #7100 (11/08/2022). The volatility of cryptocurrency and the involvement of celebrity endorsers were, of course, big issues in 2022 and are likely to stay at the forefront for regulators and self-regulators alike.
Another case demonstrating that NAD’s concerns are running on a parallel track with the FTC’s, is the challenge it initiated regarding Blue Apron’s advertising for its food delivery subscription service. NAD inquired whether Blue Apron’s claim that “canceling meals is easy” was substantiated. Citing the FTC’s “dark pattern” guidance that consumers should be able to cancel their subscription plans as easily as they can sign up for them, NAD examined Blue Apron’s cancellation functionality. As described by the Decision, Blue Apron provides customers multiple methods to cancel via its app and its website and the steps for doing so are easy to find and follow. Furthermore, cancellation is not delayed by multiple inquiries and save attempts; rather “[u] pon selecting the “Cancel my meal subscription” hyperlink, consumers are taken to a page that asks a single question: “Why are you canceling?” Finally, NAD noted that during the course of the inquiry, Blue Apron discontinued its practice of requiring consumers to email Blue Apron for instructions on how to cancel. Accordingly, NAD determined that Blue Apron’s claim that cancellation is easy was truthful and adequately substantiated. NAD Case #7099 (12/01/2022). While NAD does not have authority to enforce ROSCA, the federal law that governs subscription and other negative option plans, it’s clear that it, like FTC, is also focused on “dark patterns,” and in particular how they appear in subscription marketing.
And, finally, 2022 saw a challenge brought by Truth In Advertising, Inc. (commonly known as “TINA”) at NAD. NAD Fast-Track SWIFT (Disclosure) Case #7159 (12/01/2022). While the Decision itself, addressing the money-back guarantee disclosures in The Princeton Review’s advertising for its SAT preparation courses (which the advertiser voluntarily agreed to modify), was nothing unusual, the fact that the case was initiated by TINA was. TINA, a consumer advocacy non-profit founded in 2012 and focused on deceptive advertising, typically takes its complaints to the companies themselves or to federal and state regulators. A significant TINA tactic is “name and shame,” which it does through its website, inviting complaints, announcing its investigations and letters to regulators, and publishing a Wall of Shame. What it hasn’t typically done is go to NAD, notwithstanding NAD’s preeminence in the field. Now that it has, will it continue to use the self-regulatory forum to address its concerns?
Keeping an eye on NAD in 2023! (For discussion of other significant NAD cases published at the end of 2022, see here and here.)