New BBB Advertising Standards Reflect 21st Century Advertising in Traditional and New Media

  
     
Updated Code provides comprehensive guidance for  all businesses on truth-in-advertising rules
February 12, 2015


Arlington, VA
 – Better Business Bureau has made comprehensive changes to its cornerstone product, the BBB Code of Advertising, to reflect the many new ways advertisers reach consumers via websites, social media, texting and other channels. Every business that advertises in North America is expected to follow BBB’s Code, and compliance is monitored by 112 BBB offices in the U.S. and Canada. Industry self-regulation of truth-in-advertising rules has earned the support of federal regulators who take seriously cases referred to their agencies.

“BBB’s mission is to advance trust in the marketplace, and nothing is more fundamental to that mission than truth-in-advertising,” says Mary E. Power, president and CEO of the Council of Better Business Bureaus. “Businesses must be truthful in what they say, what they infer, and what they omit from their advertising. This core message of the Code is unchanged, but this comprehensive update covers the many new channels businesses have to reach potential customers.”

The key proviso of the Code is that “the primary responsibility for truthful and non-deceptive advertising rests with the advertiser” and that advertisers “should be prepared to substantiate any objective claims or offers made before publication or broadcast.”

One of the most significant changes to the Code is an update to the section on testimonials and endorsements, to reflect the Federal Trade Commission’s current thinking on, among other things, the use of such testimonials in social media. The most noticeable change to the Code is the elimination of the requirement that advertisers include a range of savings whenever an “up to” price savings claim is made (for instance, up to 40%); the Code retains the requirement that at least 10% of the class of items identified in the ad must be offered at 40% off.

Other updates address close-out and liquidation sales, duration of sale periods, rebate promotions, and distinctions between puffery and objective superlative claims. New additions to the Code cover environmental benefit claims, “Made in USA” and “Product of Canada” claims, and continuity programs often offered with free and low-cost merchandise. The goal is to make industry self-regulation track with regulatory approaches to encourage the most honest and ethical marketing by businesses.

All 112 BBBs across North America have Advertising Review Specialists who work with businesses in their service area to help ensure truth-in-advertising in all channels. When BBB learns of an advertisement or questionable marketing claim, it notifies the business and seeks voluntary substantiation, modification or discontinuation of the claim(s) in question. All 4.7 million BBB Business Reviews include a section where concerns about advertising that BBB is aware of may be highlighted. In 2014, BBBs conducted more than 11,000 ad reviews at the local level, and nearly 250 national advertising reviews were conducted by various programs at the Council of Better Business Bureaus.

BBB and Truth-in-Advertising – Historic Highlights

  • The National Vigilance Committee (later changed to Better Business Bureau) was founded in Dallas in 1912 by ethical business leaders, with principles based on “The Ten Commandments of Advertising” by Samuel Candler Dobbs of Coca-Cola. The first BBB opened in Minneapolis that year, followed by Cleveland and Salt Lake City in 1913.
  • The first BBB Guide to Retail Advertising and Selling was published in 1930.
  • Over the next several decades, BBB developed numerous standards and recommendations addressing advertising issues, and helped draft legislation that outlawed bait-and-switch advertising in 17 states.
  • The Federal Trade Commission used many of BBB’s guidelines when it published their Guides Against Deceptive Pricing in 1958.
  • BBB worked with key advertising associations to create the Advertising Code of American Business in 1964. It had nine basic principles: Truth, Responsibility, Taste and Decency, Disparagement, Bait Advertising, Guarantees and Warranties, Price Claims, Unprovable Claims, and Testimonials.
  • The renamed BBB Code of Advertising was developed in the 1970s to provide guidance to BBBs across North America in reviewing advertising claims by local and regional businesses.
  • The Advertising Self-Regulatory Council, founded in 1971 as the National Advertising Review Council, establishes polices and procedures for national advertising programs impartially administered by BBB. Its board of directors includes BBB and executives with five major advertising associations.
  • BBB-administered self-regulatory programs include the National Advertising Division, Children’s Advertising Review Unit, National Advertising Review Board, Electronic Retailing Self-Regulation Program, Online Interest-Based Accountability Program, and Children’s Food and Beverage Advertising Initiative.
  • Some updates were made to the BBB Code of Advertising in 1985.
  • In 2015, updates were made to the BBB Code of Advertising to expand truth-in-advertising principles to reflect online and social media advertising.

ABOUT BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2014, people turned to BBB more than 165 million times for BBB Business Reviews on more than 5.4 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for 112 local, independent BBBs across North America, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.