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ASRC Self-Regulation Program (ERSP) Policies
Oversight By: The Advertising Self-Regulatory Council (ASRC) (formerly known as NARC)
Administered By: The Council of Better Business Bureaus, Inc. (CBBB)
Effective: August 1, 2004
NARC Partners: The American Association of Advertising Agencies (AAAA) The American Advertising Federation (AAF) Association of National Advertisers (ANA) The Council of Better Business Bureaus, Inc. (CBBB) Mission
The mission of the Electronic Retailing Self-Regulation Program (hereinafter “ERSP”) is to enhance consumer confidence in electronic retailing, to offer the industry an expeditious system for review of that advertising and marketing, to discourage advertising and marketing in the electronic retailing industry that contains certain unsubstantiated claims, and to demonstrate the strong commitment of the industry to meaningful and effective self-regulation.
Definitions For purposes of these Procedures:
A. The terms “direct response advertisement” shall mean any commercial message, in any electronic medium of dissemination, in which consumers are asked to place an order or obtain additional information regarding a product or service through any means of electronic device such as a toll-free telephone number, e-mail or online request. Direct response advertising is also customarily and synonymously referred to in the industry as “electronic retailing”. The current primary media of direct response advertising are television and radio and, accordingly, these forms of advertising will be the primary focus of ERSP. Nevertheless, the ERSP review of advertising claims may include all aspects of a direct response advertising and marketing campaign, including, as necessary, without limitation, product packaging, labeling, print advertising, online marketing and direct mail.
B. The term “national direct response advertisement” shall mean any direct response advertisement that is disseminated in a substantial section of the United States or is test market advertising prepared for national campaigns.
C. The term “primary claims” or “core claims” in a national direct response advertisement shall mean those representations which are deemed most significant and fundamental in the marketer’s communication of a product’s attributes or characteristics. The “primary” or “core” claims in a direct response advertisement may include, but shall not be limited to, claims of monadic and/or comparative performance, evidence-based claims, consumer testimonials, health and safety claims and/or claims involving the sales price of a product.
D. The term “marketer” shall mean any person or other legal entity that engages in national direct response advertising.
E. The term “consumer advocacy group” shall refer to an organization dedicated to defending or maintaining a cause or proposal on behalf of the consumer.
1.2 Organization The Electronic Retailing Self-Regulation Program is managed as a separate program under NARC auspices and policy oversight, and administered for NARC by the CBBB under the direction of the NARC President 2.1 ERSP – General Information
A . Functions and Policies ERSP shall be responsible for receiving and/or initiating, evaluating, investigating, analyzing and resolving inquiries regarding the truthfulness and accuracy of the primary or core efficacy or performance claims that are communicated in national direct response advertising.
B . Case Decisions Upon completion of an inquiry, ERSP will publish final case decisions which will identify the marketer, the product or service advertised, and the core advertising claims that were reviewed. The final case decision will also include a summary of the marketer’s position, the rationale for ERSP’s decision and a brief statement from the marketer documenting its agreement to comply with ERSP’s decision. It is the policy of ERSP not to endorse any company, product or service, and a favorable decision regarding advertising claims for the products or service of a particular company should in no way be construed as such. Similarly, a marketer’s modification of advertising, in cooperation with ERSP’s self-regulatory efforts, should not be construed as an admission of any impropriety.
C . Press Releases Upon completion of an ERSP inquiry, the National Advertising Review Council (“NARC”) will publish and publicly issue a press release that will be disseminated to the press and interested members of the industry. The press release will include a brief summary of the case decision. The press release may not be used by any person or legal entity as a form of promotion for any company or any particular product or service.
D . Confidentiality and Publicity To ensure the integrity and cooperative nature of the review process, participants to ERSP proceedings must agree: (i) to keep the proceedings confidential throughout the self-regulatory review process; (ii) not to subpoena any witnesses or documents from ERSP regarding the review proceeding in any future court or other proceeding; and (iii) after a decision has been published, not to mischaracterize any ERSP case decision or use and/or disseminate any ERSP case decision or press release for any advertising and/or promotional purposes. If any person or legal entity violates any of the provisions of this confidentiality and publicity section, ERSP shall have the discretion to administratively close an inquiry by referring the matter to the appropriate government agency and issuing a press release setting forth the detail of the breach of confidentiality. . Moreover, ERSP may issue a public statement, for clarification purposes, if any person or legal entity mischaracterizes any ERSP case decision or uses and/or disseminates any ERSP case decision or press release for any advertising and/or promotional purposes after a decision has been published.
E. Non-Participation Referrals to Law Enforcement Agencies When ERSP commences an inquiry pursuant Section 2.2 of these Procedures, and the marketer elects not to participate in the self-regulatory process, ERSP may compile a record of the facts obtained and the allegations made regarding the claims asserted in the advertising and forward it to the appropriate federal or state law enforcement agency which may include, but is not limited to, the Federal Trade Commission, the Food and Drug Administration and/or any state Attorney Generals’ office. Reports of such referrals shall be included in ERSP press releases.
2.2 Filing an Inquiry
A. Any person or legal entity (including ERSP as part of its monitoring responsibility) may submit to ERSP any inquiry regarding electronic national direct response advertising it believes worthy of ERSP’s review. All inquiries (except those submitted by consumers), should be submitted in both hard copy and in electronic format and should be no longer than eight (8) double-spaced typewritten pages. ESRP encourages all filing persons or legal entities to include, when applicable, a videotape and transcript of the direct response advertisement. (i) Filing Fee - All inquiries submitted by, or on behalf of, non-ERA member companies shall be filed together with a check, made payable to the Council of Better Business Bureaus, Inc., in the amount of $2,500, as a filing fee to help defray some of the administrative costs associated with the advertising review process. The President of NARC shall have the discretion to waive the fee for any challenger who can demonstrate economic hardship. If a review is administratively closed, the filing fee will be $750 for non-ERA member companies. The difference between these administrative closing fees and the initial filing fee will be refunded to the challenger.
B. ERSP encourages those persons or legal entities filing an inquiry to limit any and all arguments to the primary or core efficacy or performance claims in the advertising. The person or legal entity filing the inquiry is not required to submit supporting data with the inquiry.
C. Upon receipt of any inquiry, ERSP shall promptly acknowledge receipt and take the following actions: (i) forward the inquiry to the appropriate person(s) or legal entity responsible for the direct response advertisement at issue and officially open the case (See Section 2.5 for “The Marketer’s Written Response”), or; (ii) advise the person or legal entity filing the inquiry that the matter is not at this time, or is no longer, appropriate for formal investigation in this forum if, at the commencement or during the course of an advertising review proceeding, ERSP determines that: (a) the advertising complained of is not an electronic national direct response advertisement, as defined in section 1.1 (A) and (B) of these Procedures; (b) the advertising complained of is the subject of pending litigation or an order by a court; (c) the advertising claims that are the subject of the inquiry are the subject of a federal government investigation, agency consent decree or order; (d) the advertising claims that are the subject of the inquiry have been permanently withdrawn from use prior to the date of the inquiry and ERSP receives the marketer’s assurance, in writing, that the representation(s) at issue will not be used by the marketer in any future electronic national direct response advertising for the product or service; (e) the inquiry is without sufficient merit to warrant the expenditure of ERSP’s resources; or (f) ERSP cannot dedicate the appropriate time and resources necessitated to expeditiously resolve the inquiry. Upon making such a determination, ERSP shall advise the filing person or legal entity that a case will not be opened, or in the event that an advertising review proceeding has already been commenced, shall administratively close the case file. If the inquiry relates to matters other than the truth or accuracy of the direct response advertising or does not pertain to the primary or core claims in the direct response advertisement, ERSP shall so advise the person or legal entity filing the inquiry as provided above. (iii) advise the person or legal entity filing the inquiry that the matter is not at this time, or is no longer, appropriate for formal investigation in this forum if, at the commencement or during the course of an advertising review proceeding, ERSP determines that specific language in a direct response advertisement is mandated or expressly approved by federal law or regulation; political and issue advertising, and questions of taste and morality are not within ERSP’s mandate. If the inquiry, in part, relates to matters other than the truth and accuracy of the advertising, ERSP shall so advise the challenger.
D. ERSP reserves the right to refuse to open or to continue to handle a case where a person or legal entity to an ERSP proceeding publicizes, or otherwise announces, to third parties not directly related to the case the fact that specific advertising will be, is being, or has been, referred to ERSP for resolution (See Section 2.1 (D) on “Confidentiality and Publicity”). The purpose of this right of refusal is to maintain a professional, unbiased atmosphere in which ERSP can affect a timely and lasting resolution to a case in the spirit of furthering voluntary self-regulation of national direct response advertising and the voluntary cooperation of the parties involved.
E. The ERSP review process should be completed no later than sixty (60) calendar days after the date in which its opening letter is mailed to the marketer. F. Any and all determinations that are rendered pursuant to Section 2.2 of the Procedures shall be at the sole discretion of ERSP. 2.3 Selection of Cases Notwithstanding the specific filing contingencies discussed in Section 2.2 (C) of these Procedures, ERSP will have sole and exclusive authority to select, accept or reject cases for self-regulation based upon criteria that include, but are not limited to, the number of consumers affected by the advertising, the type of advertising claim being made and the prominence of the claim in the advertising.
2.4 Information in an ERSP Inquiry
A. Time periods for all submissions to ERSP shall commence on and include the first day of business following the date of delivery of the triggering document.
B. The person or legal entity that initiates the inquiry will have the option of actively participating in the ERSP inquiry. The identity of the person or legal entity that initiates an inquiry and wishes to actively participate in an ERSP review will be disclosed to the marketer at the outset of an inquiry (and shall hereinafter be referred to as the “challenger”). Similarly, it will be disclosed to the marketer if the inquiry is initiated by ERSP or a consumer. However, the identity of a consumer filing an inquiry will not be made public. (i) A company and/or companies or other entity that initiates an inquiry that wishes to actively participate in an ERSP review will advise ERSP of its decision in writing when initiating the inquiry and shall be privy to the marketer’s non-confidential submission pursuant to Section 2.5 of these Procedures and may add comments to the record pursuant to Section 2.8 (A) of these Procedures. (ii) A company and/or companies or other entity that initiates an inquiry and does not wish to actively participate in an ERSP review will advise ERSP of this decision in writing when initiating the inquiry and will not receive any substantiating information provided by the marketer during the pendency of the inquiry.
C. ERSP shall not consider any written materials submitted by the person or legal entity filing the inquiry that have not been made available to the marketer, and any materials submitted by the person or legal entity filing the inquiry on condition that they not be shown to the marketer shall promptly be returned.
D. A marketer may submit trade secrets and/or proprietary information or data (excluding any consumer perception communications data regarding the advertising in question) to ERSP with the request that such data not be made available to the person or legal entity filing the inquiry, provided it shall: (i) clearly identify those portions of the submission that it is requesting be kept confidential in the copy submitted for ERSP’s review; (ii) redact any confidential portions from the duplicate copy submitted to ERSP that will be forwarded to the person or legal entity filing the inquiry ; (iii) provide a written statement setting forth the basis for the request for confidentiality; (iv) affirm that the information for which confidentiality is claimed is not publicly available and consists of trade secrets and/or proprietary information or data; and (v) attach a comprehensive summary of the proprietary information and data (including as much non-confidential information as possible about the methodology employed and the results obtained) and the principal arguments submitted by the marketer in its rebuttal of the inquiry as an exhibit to the submission.
E. Prior to the transfer of data to the marketer or challenger, ERSP shall obtain assurances that the recipients agree that the materials are provided exclusively for the purpose of furthering ERSP’s inquiry; circulation should be restricted to persons directly involved in the inquiry, and recipients are required to honor a request at the completion of the inquiry that all copies be returned.
F. In the case of studies, tests, polls and other forms of research, the data provided should be sufficiently complete to permit a comprehensive evaluation of the protocol and methodology of such study, poll, test or other research. ERSP shall be the sole judge of whether the data is sufficiently complete to permit such an evaluation.
G. A marketer submitting third party publications or abstracts as substantiation for its advertising claims must make specific reference to the page or pages in the submitted materials where the claim substantiation can be found.
H. If the marketer is relying on testing that does not involve the advertised product, the burden will be on the marketer to demonstrate to ERSP the relevance of that test to the advertised product.
2.5 The Marketer’s Written Response
A. The marketer shall, within fifteen (15) calendar days after receipt of the inquiry, submit to ERSP, in hard copy and in electronic format (including exhibits when possible), a written response that provides substantiation for any advertising claims or representations that are the subject of the inquiry, any objections it may have to the inquiry on jurisdictional grounds, as defined in Sections 2.2 C (ii) and (iii) together with copies of all direct response advertising, in any medium, that is related to the campaign. This should include both long and short forms of the direct response advertisement. Submissions by the marketer should include only supporting evidence that is directly relevant to the primary or core efficacy or performance claims that are at issue in the inquiry. To help ensure a timely review, marketers should strive to limit the length of their submissions to no more than eight (8) double-spaced typewritten pages (excluding evidentiary exhibits). Marketer responses that address the issue of ERSP jurisdiction should be submitted as soon as possible after receipt of the inquiry, but in any event, must be submitted no later than fifteen (15) calendar days after the marketer receives the initial ERSP inquiry. (See also Section 2.6 “Failure to Respond.”). A response addressing jurisdiction does not obviate the need for a timely substantive response under this paragraph.
B. ERSP will exercise its discretion to only review evidence that is directly relevant to the primary or core efficacy or performance claims and a marketer is expected to provide complete substantiation for the claims upon ERSP’s initial inquiry.
2.6 Marketer’s Failure to Respond
A. If a marketer fails to file a substantive written response within the period provided in Section 2.5(A), ERSP shall release to the press and the public a “notice” summarizing the advertising claims that were the subject of the inquiry, and indicating the marketer’s failure to substantively respond.
B. If the marketer fails to file a substantive written response within an additional ten (10) calendar days, ERSP may refer the file to the appropriate government agency and release information regarding the referral to the press, the public, and the media in which the advertising at issue has appeared, and shall report the referral on the National Advertising Review Council website.
2.7 Failure to Locate a Marketer
If, after exercising reasonable due diligence, ERSP is unable to locate a mailing address for a marketer whose direct response advertising campaign is under review, ERSP may refer the file to the appropriate government agency and release information regarding the referral to the press, the public, and the media in which the advertising at issue has appeared, and may report the referral on the National Advertising Review Council website . ERSP referrals pursuant to this section may be made either individually or collectively.
2.8 Reply of the Challenger
A. If a person or legal entity has indicated to ERSP that it wishes to be designated as a challenger pursuant to Section 2.4(B)(i) of the Procedures, ERSP shall promptly forward a copy of the marketer’s written response to the challenger that shall have any material designated as confidential redacted, and shall include, as an exhibit, a comprehensive summary of the redacted information in the manner set forth in Section 2.4 (D) above. Within ten (10) calendar days of receipt of the marketer’s response, the challenger shall submit in duplicate hard copy and an electronic format (including exhibits when possible) its reply, if any, to ERSP. To help ensure a timely review, competitors should strive to limit the length of their reply to eight (8) double-spaced typewritten pages (excluding evidentiary exhibits). If the challenger does not submit a reply, ERSP shall proceed to decide the challenge upon the expiration of the challenger’s time to reply, subject to a request by ERSP for additional comments or data under Section 2.11.
B. After the challenger has reviewed the marketer’s first substantive written response; it may notify ERSP in writing that it elects to waive its right to add to the record thereby expediting the inquiry. In the event that a competitor waives its right to reply, additional information from either party may be submitted only upon request from ERSP and shall be treated in the same manner as requests for additional comments or data under Section 2.8(A) of these procedures and any meetings with the parties will be held at the discretion of the ERSP.
2.9 Marketer’s Final Response
If the challenger submits a reply pursuant to section 2.4 (B)(i) of these Procedures, ERSP shall promptly forward a copy of that reply to the marketer. Within ten (10) calendar days after receipt of this reply, the marketer shall submit a response, if any, in duplicate hard copy and an electronic format (including exhibits when possible). To help ensure a timely review, marketers should strive to limit the length of their response to 8 double-spaced typewritten pages (excluding evidentiary exhibits)
2.10 Meetings with the Marketer
A. If a marketer whose direct response advertising campaign is under review requests, within the (15) fifteen calendar day period after receiving notification of the inquiry, to meet with ERSP, ERSP will conduct a meeting, either in person or by teleconference, within fifteen (15) calendar days of the request. A meeting under this paragraph does not increase the time in which a response under 2.5(A) must be submitted.
B. The meeting between ERSP and the marketer will not be conducted in lieu of the submission of a written response, but the meeting shall, instead, be conducted to further elaborate on the marketer’s substantiating evidence.
2.11 Additional Responses
A. In the event that it is deemed necessary, within ten (10) calendar days after ERSP’s receipt of the marketer’s written response pursuant to section 2.5 (A) of these Procedures, ERSP may send the marketer a written list of questions or comments regarding the marketer’s substantiating evidence.
B. If ERSP does not request further comments or data under this paragraph, no other additional submissions will be accepted as part of the case record, unless as provided by Section 2.8 (A) of these Procedures, and any unsolicited submissions received by ERSP will not be considered, and returned to the marketer.
C. In the event that ERSP does request further information from the marketer pursuant to section 2.8 (A) of these Procedures, the marketer will have ten (10) calendar days from receipt of ERSP’s request to submit a written reply to those questions or comments.
2.12 Time Extensions
A. In order to maintain the program objective of facilitating an expeditious inquiry of a marketer’s direct response advertising campaign, extensions to the time specifications stated in these Procedures will only be granted in the most urgent and meritorious of occasions.
B. Requests for time extensions will not result in a tolling of the time for submissions unless the extension is granted. Any time extensions granted by ERSP shall be limited to forty-eight (48) hours (two business days) unless the marketer can demonstrate extraordinary cause for a greater amount of time. The request for a time extension shall be in either hard copy or electronic form and shall include a justifiable reason for the time extension requested.
2.13 Final Decision
A. Within fifteen (15) business days of its receipt of the last document authorized by these Procedures, ERSP will formulate its decision on the truth and accuracy of the claims at issue; prepare the “final decision;” provide a copy to the marketer and invite the marketer to add a Marketer’s Statement within five (5) calendar days of receipt of ERSP’s written determination
B. In the decision, ERSP will state whether the primary or core claims that were reviewed have been sufficiently supported by the marketer’s evidence and will recommend whether the primary or core claims that were reviewed should be modified or discontinued. The ERSP decisions will apply with equal force and effect to the reviewed claims to the extent that they appear on product packaging or in any other advertising.
C. ERSP may distinguish between claims that do not appear capable of substantiation at all, even if made or qualified in some manner other than the form in which they appeared in the direct response advertising that was reviewed and those claims that might be capable of substantiation if properly qualified. ERSP may make recommendations as to how claims should be modified or qualified, however this determination will ultimately be the responsibility of the marketer.
D. An ERSP review or inquiry that does not result in a recommendation that claims be discontinued or modified will not constitute approval of the direct response advertisement or other advertising or marketing that were reviewed, and marketers may not state or imply in any way that their advertising claims have been approved.
E. An ERSP review that does not result in a recommendation that claims be discontinued or modified will not assure the marketer that some other action, filing or adverse finding will not occur in another regulatory forum including the Federal Trade Commission and the National Advertising Division.
F. ERSP will apply these Policies & Procedures to any person or legal entity that subsequently acquires the ownership rights of a product or service that has been the subject of an ERSP inquiry and continues to disseminate the same electronic national direct response advertising that ERSP had recommended be modified or discontinued.
3.1 Marketer’s Statement
A. In the event that ERSP decides that some or all of the advertising claims at issue are not substantiated, the marketer shall, within five (5) business days of receipt of the decision, submit a Marketer’s Statement stating whether the marketer agrees to modify or discontinue the advertising. The Marketer’s Statement is not the venue to reargue the merits of the case, bring in new facts, or restate or summarize ERSP’s conclusions.
B. In the event that ERSP decides that all of the advertising claims at issue have been substantiated, a marketer may elect not to submit a Marketer’s Statement to ERSP.
C. The Marketer’s Statement should be concise and may not exceed one (1) double spaced page in length. ERSP reserves the right to edit for length or inappropriate material.
D. In the event that the marketer fails to submit a Marketer’s Statement as required by Section 3.1(A) stating that it agrees to modify or discontinue the advertising, ERSP may refer the matter to an appropriate government agency for review and possible law enforcement action.
3.2 Publication of the Decision
Upon receipt of the final version of the Marketer’s Statement, ERSP shall provide a final copy of the complete decision to the marketer and all interested parties, including the Electronic Retailing Association and shall also make the decision available through press announcements in various industry and trade publications.
3.3 Closing a Case When a case has been concluded with the publication of an ERSP decision the case will be closed and, absent extraordinary circumstances, no further materially similar inquiries on the claim(s) in question shall be accepted by ERSP, except as provided for in Section 4.1.
A. Thirty (30) calendar days after an ERSP decision requesting that advertising be “Modified or Discontinued” is published, together with a Marketer’s Statement indicating the marketer’s agreement to comply with ERSP’s recommendations, ERSP may notify the marketer and request a report back on the status of the advertising at issue which shall include an explanation about the steps the marketer has taken to bring its direct response advertising into compliance with ERSP’s decision
B. If, after reviewing the marketer’s response to a request for a status report on compliance, pursuant to Section 4.1, or, if the marketer fails to respond after ERSP independently reviews the current advertising, ERSP determines that the marketer has not made a good faith or bonafide attempt to bring its advertising into compliance with ERSP’s recommendations and/or the representations with respect to compliance made in its Marketer’s Statement, ERSP may refer the file to the appropriate government agency and release information regarding the referral to the press, the public, and to the media in which the advertising at issue has appeared, and shall report the referral on the National Advertising Review Council website.
C. If ERSP determines that the marketer has made a reasonable attempt to comply with its decision, but remains concerned about the truthfulness and accuracy of the advertising as modified, ERSP will notify the marketer, in writing, detailing its concerns. The marketer will have ten (10) calendar days after receipt of ERSP’s notice to respond. Within ten (10) days of receipt of the marketer’s response, ERSP will make one of the following determinations regarding the marketer’s compliance: (i) if ERSP concludes that the advertising is in compliance with ERSP’s decision, ERSP will notify the marketer and close the compliance inquiry; (ii) if ERSP recommends that further modifications be made to bring the advertisement into compliance with ERSP’s original decision, ERSP will notify the marketer of its findings and any further recommendations. (a) If the marketer accepts ERSP’s compliance findings and agrees to discontinue the advertising at issue until it makes further modifications as recommended by ERSP, ERSP shall report this on the National Advertising Review Council website. (b) If the marketer indicates that it disagrees with ERSP’s compliance findings and refuses or fails to make the further modifications recommended, ERSP may document such non-compliance and refer the matter to the appropriate government agency, report this action to the press, the public, and any medium in which the advertising at issue appeared and shall report its findings on the National Advertising Review Council website.
D. When a marketer has made a good faith or bonafide attempt to comply with ERSP’s decision, but has yet to fully implement the recommendations in a modified advertisement within the time parameters stated in this section, ERSP reserves the right to make subsequent compliance inquiries of the marketer and, depending upon the actions that the marketer has taken to comply with the decision within a reasonable period of time, ERSP will proceed with the enforcement mechanisms pursuant to sections 4.1 (B) and (C) of the Procedures.
E. Any determination rendered by ERSP with respect to the advertised claim or claims at issue in an inquiry shall remain in full force and effect as it pertains to the dissemination of the same claim in another form of direct response advertising for the product or service.
Procedural Note: While theses Procedures specifically allow for the availability of both administrative and substantive ERSP determinations on the NARC website, NARC has been advised by the Electronic Retail Association (“ERA”) that ERSP determinations will also be made available on the ERA website. Further, NARC reserves the right to interpret, change, modify, amend or rescind these ERSP Procedures & Policies in whole, or in part, at any time upon consultation with the ERA.
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