The National Advertising Division & The Better Business Bureau

1. The National Advertising Division &The Better Business Bureau …&how they keep us safe and happy Veronica Krutous 15 February 2005

2. What is the BBB? • founded in 1912 • This organization is based in the US & Canada • It’s purpose is to promote and maintain ethical, honest business practices • primarily funded by its member corporations (thus leading to criticism that it is less than effective as a consumer protection agency)

3. Alright, the BBB is devoted to honest business… but what exactly do they do? Core Services Include: • Business Reliability Reports • Dispute Resolution • Consumer Complaint Settlement • Charity Review • Consumer and Business Education • Advertisement Monitoring ( focusing on truth and accuracy ) • Screenadvertisements involving products for children • Provide information to consumers & businesses that will help them make informed purchasing decisions

4. the BBB in action… In Jan, 2005 the BBB and Javelin Strategy & Research Co. released a Identity Fraud Survey Report. (This was an update of the Federal Trade Commission's 2003 Identity Theft Survey Report)

5. What they’d found: • “Despite growing fears about identity theft and online fraud, such crimes are more frequently committed offline than online” • Internet-related fraud problems are actually *less severe *less costly *not as widespread than previously thought.

6. Online/ Offline • The study concluded that those who access accounts online can provide earlier detection of crime than those who rely only upon mailed monthly paper statements. • By managing their financial activities online, consumers can reduce access to personal information on paper bills and statements that may be used to commit identity theft and fraud.

7. key points made in the report: • The most frequently reported source of informationused to commit fraud was a lost or stolen wallet or checkbook. • Among cases where the perpetrator's identity is known, 1/2 of all identity fraud is committed by a friend, family member, relative, neighbor or in-home employee - someone known by the victim. • Although identity fraud is not growing, it is still a significant area of risk. • The majority of identity fraud crimes are self-detected.

8. The BBB urges Consumers to: Protect their Wallets, Purses and Checkbooks KeepHighlySensitive Financial Information Awayfrom where others, including Family, Friends, Neighbors and Employees who perform work in your house, can get access to it. Take A Close Look At Your Mailbox (pick up your incoming mail as soon as it is delivered and you don't have a locking mailbox to protect it, consider getting one.) Move to Online Statements and Bills and Pay Bills Online Whenever Possible Shred personal papers to avoid "dumpster diving" Be Safe Online : password protect your computer and your sensitive files , ensure that you have a firewall , make sure you have good anti-virus/anti-spyware Monitor your credit report at least annually Take the BBB/Javelin Quiz & find out: “HOW SAFE ARE YOU?” http://www.bbbonline.org/idtheft/safetyQuiz/

9. How the BBB can help you: • If you go to their website (www.bbb.org) you can find information on over 2 million organizations. . . • Before investing or donating to any business or charity, you should check this site out

10. Another service the BBB provides: • If you think that a company or charity has treated you unfairly, file a complaint online at www.bbb.org. • (this includes issues pertaining to: Lemon Law/ Auto, Warranty, Cell Phones, Business, Charity, ID theft, and Privacy) • The BBB will contact the organization to help resolve the issue.

11. The National Advertising Division • The National Advertising Division (NAD) of the Council of Better Business Bureaus (CBBB) takes responsibility of reviewing national advertisements for truthfulness and accuracy. • Their mission is to foster public confidence in the credibility of advertising.

12. What NAD does: • Advertisers who use NAD save money. (The NAD process is much cheaper than litigation…and it also saves companies several thousands of dollars typically spent seeking compensation through the court system) • NAD provides a quick and private process  (Companies can expect advertising challenges to be resolved while the ad campaign is still running because NAD provides written decisions/ responses within 60 business days) • NAD settles disputes fairly and effectively. (The in-house counsel, marketing executives, research and development departments and outside consultants work together to decide whether claims are valid. Each party has the opportunity to explain its position and provide supporting data)

13. How else NAD helps… • NAD attorneys are experts in advertising review. (NAD has experienced attorneys working for them. These attorneys have substantial experience working with claim validation, advertisements, regulations on trade, legal actions and negotiation.) • NAD helps to ensure a level playing field. (Government regulation is usually costly and burdensome. NAD has earned the respect of consumers and regulators alike for providing an effective, successful self-regulatory mechanism. Advertisers' willingness to support NAD and voluntarily adhere to its decisions help ensure an honest & open playing field in advertising.)

14. One Example of NAD in action: Five Brothers Brand Pasta Sauce

15. What happened? • A competitor challenged freshness-related claims made by Lipton for its Pasta Sauce • 1st, the NAD concluded that claims of a product attribute, in this case, that the product was made with fresh tomatoes, did not necessarily constitute an implied, comparative taste claim • Thus claims such as "Fresh tomatoes make the difference!" and "made only with fresh, vine-ripened tomatoes," did not, in the NAD's view, necessarily imply a better or fresher taste claim. • ALSO- the challenger also contended that the "fresh tomato" claimsconveyed the message that the Five Brothers Brand sauce was itself fresh, and that such a claim could not be made for a thermally processed product, such as pasta sauce • The NAD, however, distinguished the claims made here from claims that imply that the product itself is fresh. 

16. Then what? • The NAD found that the advertiser's claims simply conveyed, truthfully, that the product was made from fresh ingredients, not that the product, itself, is fresh • The NAD determined that Lipton was not wronging anyone and that the competitors were out of line