ERA: After a Year, ERSP Helps Weed Out False Ad Claims

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The Electronic Retailing Association said yesterday that efforts to thwart misleading or fraudulent advertising have been successful one year after it implemented its Electronic Retailing Self-Regulation Program.


The ERSP, which was designed to identify egregious advertising programs and remove them from the airwaves, claims to have tracked 1,730 direct response advertisements since August of last year.


"We believe that in order to continue to thrive as an industry, e-retailers must be held accountable to the industry, to regulators and ultimately, to consumers," said ERA president/CEO Barbara Tulipane in a statement. "The success of this program is a clear indication of the industry's willingness to adhere to guidelines that ensure consumers receive fair and accurate information about products."


Of the 45 cases found to include potentially false advertising, 80 percent of the marketers in question agreed to modify or discontinue their advertisements based on ERSP's recommendations.


Working with the National Advertising Review Council, the self-regulatory body for the traditional advertising industry, this program looks at major claims within a direct response advertisement and assesses the adequacy of the supporting substantiation and scientific evidence.


Also, advocacy and consumer groups, direct response marketers and other interested parties have the opportunity to refer suspect advertisements to ERSP.


The program stipulates that all marketers must provide adequate substantiation within 15 days of an evidence request, and all reviews will be completed within 60 days of notification.


If the claims are found to have inadequate support and the marketer does not pull the program or make necessary alterations within the specified time period, that individual or company is referred directly by ERSP to the Federal Trade Commission, or another appropriate regulatory agency.


The FTC has been supportive of the development of this program and has indicated that ERSP referrals are given strong scrutiny, according to the ERA.


In particular, nine of ERSP's 45 total cases have been referred to the FTC for noncompliance. Of these referrals, one resulted in the largest FTC health consumer redress in history and another resulted in a company's expulsion from ERA's membership.


Most violators falsely advertised a portion of a product in the weight loss, dietary, skin treatments and health improvement categories. Consumers are able to file complaints in any product category by visiting www.savvyshopper.org and completing ERSP's consumer complaint log.


The electronic retailing industry, which includes infomercials, live shopping, radio and online retailing, experienced an eight percent growth rate in 2004 and grossed over $296 billion.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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