NAD announced the launch of its fast track challenge process today. The process, dubbed SWIFT, for Single Well-Defined Issue Fast Track, is intended to allow companies to challenge certain claims on a highly expedited basis.
With the launch, NAD also made its updated Procedures available, which include the requirements for Fast Track SWIFT. A brief summary of those new provisions is below. Notably, although NAD's announcement appears to limit the availability of the Fast Track SWIFT process to challenges of digital advertising, the Procedures themselves do not include the same limitation. We had assumed – and, frankly, hoped, in light of the timing of this announcement – that NAD decided to "soft launch" SWIFT and initially limit its scope to digital advertising. But we have confirmed that the scope is not limited as to medium; however, the new SWIFT process is limited to challenges of "influencer disclosures, native advertising disclosures, misleading pricing and sales claims, and express claims that do not require complex claim substantiation."
NAD's brief overview of the program is provided here.
Some of the most salient points of procedure are as follows:
The challenger's complaint must be filed at the online portal and may not exceed five typewritten pages in 12-point font or include more than five evidentiary exhibits (each not more than five pages long), in addition to the challenged advertising itself.
The fee for SWIFT challenges is $30,000 for BBB National Programs National Partners and for non-Partners as follows: (a) $15,000 if the challenger's gross annual revenue is less than $250 million; (b) $35,000, if the challenger's gross annual revenue is less than $5 billion; and (c) $40,000, if the challenger's gross annual revenue is $5 billion or more.
NAD will make an initial determination whether the challenge is appropriate for SWIFT within two business days. If it does so determine, it will open the case and notify the advertiser. The advertiser then has four business days to object to the SWIFT determination. If NAD determines that the case is still appropriate for SWIFT (which it must do within two business days), the advertiser has 10 business days total from when NAD transmitted the challenge to it to submit its written response – that means within 4 business days from the date NAD notifies the advertiser that it has determined that the case is still appropriate for SWIFT. The advertiser's response must provide substantiation or arguments concerning the challenged advertising, together with any supporting evidence.
The parties may still meet with NAD but only by telephone or video conference. The meetings will take place within five business days of NAD's receipt of the advertiser's response. NAD will issue its decision within twenty business days from NAD's first transmission of the case to the advertiser.
The advertiser only has a right to appeal the decision to an NARB panel, and can only appeal the substance of the decision, not NAD's decision to accept the challenge as suitable for SWIFT. The appeal process is subject to its own SWIFT related timing and fee requirements. Compliance procedures are also available.
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.