United States: Twelve Months Of NAD Decisions, By The Numbers

Last Updated: September 25 2018
Article by August T. Horvath

The annual conference of the National Advertising Division of the Council of Better Business Bureaus (NAD), coming up next week, September 24 and 25, in New York, is one of the key events on the advertising-law professional calendar. A highlight of the event is always the review of the key NAD cases and emerging themes over the past year, as determined both by NAD attorneys and by participants and their counsel. This will be discussed in panels on various issues such as claim substantiation, customer review of products, industry standards and certifications, NAD evidentiary standards, and more.

I recently examined NAD's decisions for the twelve months between August 1, 2017, and July 31, 2018, with some specific questions in mind. I wanted to know: Which industry sectors are using NAD? How often are advertisers' claims being found substantiated, and how often is NAD recommending discontinuation or modification? How many matters never reach a full decision, and for what reasons? Are there any indications that the FTC's declining interest in investigating and prosecuting advertising violations by national advertisers is changing participants' approach to NAD, which relies on the FTC as its ultimate enforcement backup?

Which Industries Are Using NAD?

NAD issued 90 case reports between August 2017 and July 2018. They were unevenly distributed across industry sectors. Some sectors have historically relied on NAD to resolve their advertising differences, while others have not. The most numerous category of advertisers before NAD, however, doesn't exactly appear voluntarily. This is the dietary supplement sector, which accounted for 17 of the 90 cases, mostly brought by the Council for Responsible Nutrition, a public interest group that uses the NAD forum to police dietary supplement efficacy claims. The next largest category (12 cases) was personal care products and cosmetics. A further 11 cases involved appliances, with vacuum cleaners being repeat players, and 11 more cases involved telecommunication services, with both wireless telephone and home broadband suppliers active before the forum. Seven cases concerned over-the-counter drugs such as analgesics and allergy relief products. The remaining 32 cases were divided among a number of categories, including food, pet and baby products, televisions, cleaning products, toys and apparel.

Which Side Wins at NAD?

I reviewed each case and categorized them as to whether the challenged advertising claims were deemed substantiated by NAD. Several claims normally are challenged, so I divided the cases into ones in which NAD recommended all or most of the claims be modified or discontinued, NAD found all or most of the claims to be substantiated, or roughly half of the claims went each way. I found, as many frequent NAD participants will have expected, that the results strongly favor challengers. Of the 66 cases in which NAD evaluated the advertising and reached a reasoned decision, it recommended modifying or discontinuing most or all of the challenged claims in 46 of them (70%). In a further 16 (24%), NAD recommended modifying or discontinuing a substantial number of the claims. In only 4 cases (6%) NAD found all or almost all of the challenged claims substantiated. This doesn't necessarily indicate any bias at NAD. The results could be due to selection bias – i.e., challengers generally bring good cases, plus NAD presumably weeds out meritless challenges at the initial stage, when deciding whether to open a case. That's all I'll say on the subject for now!

Why Does NAD Close a Case Without a Full Decision?

In some ways, though, the who-wins analysis may be burying the lead. What about those 24 of 90 opened cases that NAD never decided on the merits? That's a pretty high percentage. I examined the reasons why the cases were closed without a reasoned decision and found that they were closed for one of four reasons, shown below.

In half (12) of those cases, the advertiser declined to participate, causing NAD to refer the challenge to the FTC and/or other relevant agency. Some of these were small dietary supplement makers that were being busted by CRN for obviously unsubstantiated claims, but some were well-known national advertisers. It would be interesting to see whether more major advertisers are willing to have un-defended NAD challenges against their advertising land on the FTC's desk in recent years. In a further eight cases, the case was terminated because the advertiser voluntarily discontinued the claims. Even though the advertiser's reason might simply be that the advertising campaign has run its course, these might be interpreted as more wins for the challenger, especially because the NAD treats these cases, for compliance purposes, as though the claims had all been found unsubstantiated, and will later accept a compliance challenge and ultimately refer the matter to the FTC if the claims are not discontinued. The remaining four undecided cases were terminated either because the parties settled the matter before decision or because NAD became aware of pending litigation involving the claims.

In this post, my aim has been to supply the data on the last year of NAD cases, without too much interpretation or opinion. But they certainly could provide a basis for interesting discussion. If you want to have such a conversation, look for me or my colleagues Neil Austin, Dave Kluft and Natasha Reed from Foley Hoag at next week's NAD conference. There's still time to sign up here!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions