*75% is only the author's opinion. Actual likelihood
may vary.
In the midst of one of the most brutal heat waves in recent
history, the FTC has published a
research study taking window manufacturers to task for, among
other things, making aggressive "up to" claims regarding
savings on air conditioning bills. (In case you were one of the
millions sweltering without power, here is one of the ads that the
FTC focused on in its report.)
According to the FTC, the key take-away of the study is that
"when marketers use the phrase 'up to' in claims about
their products, many consumers are likely to believe that they will
achieve the maximum 'up to' results." See FTC Press
Release, June 29, 2012. Accordingly, the FTC warns that
advertisers using these claims should be able to substantiate that
consumers are "likely to achieve" the maximum results
promised under normal circumstances.
The study examines consumers' impressions upon exposure to
print advertisements for Bristol Windows with an "up to"
savings claim. Unsuspecting mall shoppers were intercepted by
researchers and presented with one of three variations of the ad
above: (1) "PROVEN TO SAVE UP TO 47%"; (2) "PROVEN
TO SAVE 47%"; AND (3) "PROVEN TO SAVE UP TO 47%*"
(with a conspicuous disclaimer: "The average Bristol Windows
owner saves about 25% on heating and cooling bills."). After
examining the ads, the consumers were asked a series of questions
to determine what messages the ads were communicating.
Here are a few of the conclusions that the FTC drew from the
study:
Between 36% and 45.6% of all respondents exposed to the
"up to" version of the ad said that the ad stated or
implied savings of 47% without mentioning the "up to"
qualifier.
Almost half of respondents exposed to the "up to"
version of the ad indicated that half or more of Bristol Window
users could expect to save about 47% on their heating and cooling
bills.
Approximately 43% of respondents exposed to the ad containing
the disclosure indicated that, in their personal opinion, half or
more of Bristol Windows users could expect to save about 47% on
their heating and cooling bills.
The FTC has always been vigilant to fence in outrageous savings
claims where the advertised results (e.g., up to 75% savings!) are
unlikely to be realized by an "appreciable number of consumers
under circumstances normally and expectably encountered by
consumers." See, e.g., Plaskolite, Inc., 101 FTC 344, 350
(1983). Of course, what constitutes an "appreciable
number" is not always apparent. Decisions of the National
Advertising Division, a self-regulatory association administered by
the Better Business Bureau, might lead advertisers to believe that
the appreciable number standard is easily met. In the context of
"up to" claims comparing prices against a competitor
("save up to 75% off competitor's prices), the NAD has
interpreted "appreciable number" to require that the
number of sales at the maximum savings comprise a "significant
percentage" of all items in the offering and has held that 10%
is a significant percentage. See, e.g., America West Airlines,
Inc., NAD Case Reports, Dec. 1, 1994 (Case #3160).
However, any notion that the bright-line, ten-percent rule will
ensure compliance with the "appreciable number" test in
the wake of this recent study is, well, out the window. If
anything, the FTC has recently signaled an intention to require an
even stricter standard for substantiating "up to" claims.
In the series of related cases in which the FTC commissioned the
research study, the FTC settled with five replacement window
sellers and, in the consent orders, required the companies to
refrain from making "up to" claim unless they could
ensure that "all or almost all consumers are likely to receive
the maximum represented savings."
Whether a judge would ever find an "up to" claim
deceptive or misleading because the advertiser did not have proof
that all or almost all consumers were likely to receive the maximum
savings is debatable. It sure seems like such a standard is just a
round-about way of outlawing up to claims altogether, and unless
the FTC can prove that such claims are inherently deceptive, it
seems likely that a court would not go so far as to prohibit
"up to" claims. But in the meantime, advertisers should
proceed with caution. If you cannot prove that consumers are
"likely to achieve" the maximum results, you may want to
stay away from "up to" claims.
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