Truth-in-advertising rules govern business messages

In May, Missouri Attorney General Jay Nixon’s office fined Reliable Imports and Motorhomes Inc. $70,000 as restitution for deceptive advertising practices for a 2004 mailer that claimed a bankrupt car rental company had ordered the dealership to sell a certain number of vehicles by invitation only.

“It was one of those things where someone thought someone else was proofreading the piece, and it didn’t get done,” Reliable General Manager Bryan Penniman told SBJ when the May 18 agreement was announced. An unnamed third party, he said, created the mailer, not Reliable.

Penniman did not return phone calls seeking comment for this story.

But officials at the attorney general’s office said that the burden of approving ads wouldn’t rest on the shoulders of a third party.

“Even if it was an error by the advertising agency, it’s the business that’s ultimately responsible for what they send out to the public,” said Jim Gardner, spokesman for the Missouri Office of the Attorney General. “It’s only appropriate that they be required to verify the accuracy of anything that comes out with their name on it.”

Dianne Miner-Davidson, president of DL Media Inc., agreed, adding that her clients must sign off on projects she and her staff create.

“You would never put anything out without a client approving it. If they don’t, they’re not going to pay for it,” she said.

Speak the truth

Missouri’s truth-in-advertising laws specify that business owners must not make statements in ads that are false or have the capacity to mislead prospective buyers. Ads must not omit any material fact from advertisements and should not make false claims about a product’s performance.

Gardner doesn’t feel that false or misleading advertising is a growing problem in Missouri.

“I think, by and large, most merchants in the state are very much aware of the fact that there are specific guidelines on truth in advertising and adhere to those,” he said.

The state, he added, makes it easy for businesses to comply with advertising laws by making advertising guidelines available for download at www.ago.state.mo.us/

publications/publications.htm.

The Missouri attorney general’s office relies on citizens to report suspicious advertising. “By and large, it’s a complaint-driven system,” Gardner said, adding that 11,003 consumer complaints were filed in 2004. Complaints are categorized under industry rather than the nature of the complaint, and Gardner was unable to determine how many complaints were specific to advertising.

Ad agencies, Miner-Davidson said, create advertisements based on what the client asks for. “We have to build the message, but the core pieces of the puzzle have to be provided by the client,” she said. “An ad agency is, in some degree, a partnership with the client because you have to figure out and make sure that all the mandatories that are in there are there, and that it’s said truthfully.”

Her clients sign contracts with hold-harmless agreements against errors, mistakes or misleading advertising, she said, adding that she makes every effort to portray the client’s intended message in a positive, truthful way.

“No ad agency worth its salt is going to do anything misleading intentionally. You can’t. You don’t stay in business that way. If the client gives you misinformation and you put it in an ad, ultimately you got that info from the client. It’s their responsibility and it’s their neck,” Miner-Davidson said.

Business owners, Gardner said, are responsible for complying with advertising regulations. “If you open up a convenience store and you’re selling gasoline, there are specific environmental laws on how that gasoline must be stored and how it must be monitored and how it’s dispensed. That new store owner would be responsible for researching and complying with those regulations. Same thing with advertising laws,” he said.

Signing off

In the settlement, Reliable was required to have a staff member attest, under penalty of perjury, to the truthfulness of each ad. Agreements such as this, Gardner said, aren’t uncommon.

“The goal of any court action is, first of all, to make sure that consumers are made whole that may have been deceived and, second of all, to prevent the behavior from happening again,” Gardner said. “It’s a relatively rare occurrence, and certainly by taking action whenever it’s warranted, it does put those on notice that might otherwise play a little fast and loose with advertising regulations.”

Signatures are commonplace at many businesses, Miner-Davidson said.

“There’s somebody, ultimately, at every business who – whether it’s an owner or a manager or a CFO or whatever – depending on what it is you’re saying, is going to look at that (ad) and you’re going to know that you have to get that approved before you send it out,” she said.

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