It’s one of the most vexing questions I get as an NAD practitioner.  Vexing because there’s no hard and fast rule stated in NAD Procedures or in the cases and it’s a big effing deal for advertisers to change their labels and packaging. While it’s understood that getting packaging into compliance is more difficult and expensive than cleaning up online assets, NAD hasn’t established fixed time frames for this process.  But a new NAD Decision in a compliance action brings some very instructive guidance. 

Back in 2024, in a challenge brought by Johnson & Johnson Consumer Inc against ASO, NAD determined that ASO did not have a reasonable basis for its claim that its own Hydrocolloid Gel Bandage product (as opposed to hydrocolloid gel bandages in general) provide “2x faster healing” than dry bandages and recommended that ASO discontinue the claim.  In its Advertiser Statement, ASO agreed to comply but also stated that would “cease use of the challenged claim on its own products upon depletion of current inventories. With respect to third party brands [private label], ASO will recommend that the challenged claim be eliminated upon the next art update or change.”  (Report #7235)

Fast forward six months and JJCI’s requested that NAD initiate a compliance action because it was continuing to see the claim on product packaging and on third-party retailers’ websites.  ASO responded that it had told NAD in its Advertiser Statement it would stop using the claim when it depleted its inventory and was uncertain as to the timeline. It also said that it did not have control over third party manufacturers “but will continue to recommend that they discontinue the challenged claim upon their next artwork revision or update.” NAD was not satisfied with this response.

Acknowledging that “the timeframe for compliance depends on the advertising medium, [and] product packaging changes take the longest to effectuate,” NAD emphasized that compliance requires an “advertiser [to] demonstrate that it has expeditiously removed noncompliant claims from the marketplace and has taken steps to assure that new advertising fully complies with NAD’s recommendations.”  Indeed, it is insufficient for an advertiser to simply say in its Advertiser Statement that it will comply; “[c]ompliance efforts must begin after the NAD decision and press release are issued and continue on an ongoing basis.”

With respect to product packaging specifically, NAD stated that, while it does not require destruction of inventory, it “routinely advises advertisers to ensure that (1) packaging labels with the noncompliant claim(s) are not printed after agreeing to discontinue the claim(s); and (2) that products with the new packaging be provided to retailers as expeditiously as possible.”  And in certain circumstances, NAD recommends “stickering over noncompliant packaging where significant time elapsed since the underlying decision was issued.”  In other words, it’s not sufficient to just use up inventory; the advertiser must take other affirmative steps to cease use of non-compliant claims and to start the process for getting non-compliant packaging out of market right away.

As to ASO’s efforts, NAD noted that six months had elapsed since issuing its Decision and that ASO “cannot wait until inventories are depleted before commencing changes to its product packaging” and “cannot produce any [more] product packaging with the 2X faster claim.”  NAD also recommended that ASO “consider remedial efforts such as stickering over old packaging depending on the timing of packaging updates.” (emphasis added)

With respect to third party retailer advertising, NAD noted that advertisers have an “ongoing responsibility to monitor third-party claims regarding their products to ensure that they are substantiated or discontinued.”  Here, NAD recommended that ASO contact third-party retailers “expeditiously” and “request” that noncompliant claims in the product descriptions be removed and the images be removed or replaced with compliant ones “as expeditiously as possible.” 

ASO did not respond to NAD’s requests for a statement of compliance with these recommendations, so NAD has referred the matter to the appropriate government agency and to the platforms on which ASO’s advertising appears and where NAD has a reporting relationship.