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Thursday, November 15, 2012

ERSP Recommends Project Payday.com Modify Certain Advertising Claims for ‘Project Payday’; Marketer Voluntarily Discontinues Certain Claims

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Project Payday.com, LLC, modify or discontinue certain claims for the company’s “Project Payday,” a lead-generation business.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to the attention of ERSP pursuant to its ongoing monitoring program.

ERSP reviewed online advertising for the Project Payday system and identified several claims for review, including:

  • "Who Else Wants To Learn How To Earn A Quick $44 to $154 Any Time You Have 1-2 Hours to Spare…”
  • “Some students admitted to working less than 3 hours total, and still made more than $200.”
  • “If you follow the simple steps of our Fast First Fifty program and don’t make $50, I will pay you $100.”
  • “You show up, you do the work, you get paid.”
  • "Project Payday is PERFECT For Stay-At-Home Moms, Full-Time Employees or Students, Retirees, And People Who Just Want to Stay Around the House!”
  • “Its fun, super easy, and you can start making money in less than 2 hours.”
  • We’ve been the industry leaders in IFW training since 2006”
  • “$4,915 – not bad after just 3 months eh? I owe you big time. Really.” [Matt O’Connor, Palatine, IL]
Following its review, ERSP recommended that the marketer discontinue using the disclosure at issue (“*Results stated in testimonials and earnings claims are 100% truthful and accurate, but may not be ‘typical’”) in conjunction with testimonials and earnings claims that indicate consumers can make large sums of money quickly and easily.

In addition, ERSP recommended that in future advertising, the marketer clearly and conspicuously disclose the amount of money that consumers can generally expect to earn, based upon reliable program usage data Project Payday has received from consumers.

ERSP noted in it decision its concern that certain claims at issue implied that product users would be able to earn the specific sums communicated with little effort or computer knowledge and recommended that the marketer discontinue such claims.

Finally, ERSP recognized the marketer’s voluntary discontinuance of certain claims, such as the “no obligation” language, the assertion that “Every single one of my test students made money within 30 days,” and the statement “Make $1,000 a day starting next week.”

The company, in its marketer’s statement, said it would take ERSP’s recommendations into account in future advertising.

Thursday, October 25, 2012

ERSP Summit 2012

ERSP held its second annual Summit on October 3, 2012 at the Ritz-Carleton New York, Battery Park.

The half-day event was keynoted by Robert Anguizola, Assistant Director, Division of Marketing Practices at the Federal Trade Commission. He discussed the latest FTC cases, and addressed hot-button regulatory issues, including wealth-creation products, the Do-Not-Call registry, and "robo" calls. 

Robert Anguizola

The first panel highlighted various developments in telemarketing and lead generation advertising, as well as a lively discussion about ERSP's new self-regulatory endeavor. The panel was moderated by Leanne Gabinelli, Staff Attorney at ERSP and included Jonathan Pompan, Of Counsel at Venable LLP, George Brunt, Chief Legal Officer of Prosper, Inc., and Greg Christiansen, General Counsel at National Marketing and Learning.

Jonathan Pompan, George Brunt, and Greg Christiansen

At the second panel, industry professionals chronicled the process of bringing a product through the different stages of a successful direct response advertising campaign, from the inception of an idea through execution. The panel featured Jeff Tuller, Co Founder and President of Savvier, Edward Glynn, Jr., Partner at Manatt, Phelps & Phillips, LLP, and Vic Golio, Executive V.P. of Chief Media. The panel was moderated by ERSP Director Peter Marinello

Jeff Tuller

Tuesday, October 23, 2012

ERSP Refers Advertising for ‘Review Riches’ to FTC After Marketer Fails to Respond to ERSP Inquiry

The Electronic Retailing Self-Regulation Program will refer direct response advertising for Review Riches Affiliate Marketing Program to the Federal Trade Commission (FTC) after the marketer, Premium Web Marketing, Inc., failed to respond to the ERSP inquiry.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to ERSP’s attention pursuant to its ongoing monitoring program.

Claims at issue in the initial inquiry included:
  • “How To Make $1,000, $5,00…Or Even Over $20,000 Per Month Online Without Busting Your Head Learning the New ‘Secrets’ From The Gurus…!”
  • “quick and easy way to rake in some serious cash online”
  • “The Easiest And Most Profitable Business Opportunity On The Internet”
  • “I Earned a $538 Profit My First Week” [Dani Mendez]
  • “**SUPER BONUS** Just for a select few…you may not qualify for this one.”

Pursuant to the ERSP Policies and Procedures, after not substantively
responding to ERSP’s original inquiry within fifteen calendar days, the direct
response marketer was afforded a second ten-day period in which to submit a
substantive response. The marketer again did not submit a written response
to the inquiry and pursuant to section 2.6 (B) of the ERSP Policies and
Procedures, this matter has been referred to the FTC.

Thursday, September 6, 2012

Announcing the ERSP Coaching and Mentoring Program

The Coaching and Mentoring Program will consist of two new self-regulatory products:
  • a review of telemarketing practices of participating companies which includes a random sampling of telesales phone calls, a review of telemarketing scripts, and written assessments of the telemarketing practices; and
  • a review of coaching and mentoring and lead generation advertising associated with participating companies including print, broadcast and online advertising and written assessments of the advertising practices. 
Companies participating in the Coaching and Mentoring Program will be provided with written assessments of their telemarketing and/or advertising practices, follow-up compliance reviews and the opportunity to discuss these reviews in detail with ERSP staff. At this time companies participating in the Coaching and Mentoring Program must be ERA members and will be asked to sign a one-year participation agreement with ERSP. 

ERSP evaluates the “primary" or “core" claims made in each participant's national direct response advertising which may include telemarketing scripts and recordings, meaning those representations which are deemed by ERSP to be the most significant and fundamental in the participant's communication of material attributes or characteristics of its product or service. For example, the “primary” or “core” claims in a script or telemarketing call for a coaching or mentoring service may include (but are not limited to) claims relating to the objective benefits of the coaching or mentoring service (especially financial benefits) and the qualifications of coaches or mentors or the nature of the assistance. In addition, ERSP will continue its monitoring of lead generation and coaching and mentoring claims under the existing ERSP Policy and Procedures. 

The goal of the program is to promote voluntary self-regulation, provide an independent review of telesales calls and accompanying scripts to ensure that advertising is truthful and substantiated, and reinforce truth and accuracy in lead generation advertising.

Participation in either phase of the program shall not be construed or represented as an endorsement or approval by ERSP, ERA, ASRC, or CBBB of a company, product or service. As provided in the ERSP Procedures, it is the policy of ERSP not to endorse any marketer, product or service, and a favorable decision regarding advertising claims for the products or service of a particular marketer should in no way be construed as an endorsement. Similarly, a marketer’s modification of advertising, in cooperation with ERSP’s self-regulatory efforts, will not be construed as an admission of any impropriety.

An ERSP review that does not result in a recommendation that claims be discontinued or modified will not assure the marketer that some other action, filing or adverse finding will not occur in another regulatory or self-regulatory forum (i.e., such as the FTC or the National Advertising Division).

For more information about the ERSP Coaching and Mentoring Program, please contact Leanne Gabinelli, Staff Attorney, at LGabinelli@ersp.bbb.org or 212.705.0106.

Thursday, August 23, 2012

ERSP Finds Apira Science Can Support Certain Claims for ‘iGrow’; Recommends Marketer Modify, Discontinue Certain Claims

The Electronic Retailing Self-Regulation Program (ERSP) has determined that Apira Science, Inc. provided adequate support for certain claims made in direct-response advertising for “iGrow,” a low-level laser emitting hair rejuvenation device, but recommended the marketer modify certain claims.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus. The marketer’s advertising came to the attention of ERSP pursuant to its ongoing monitoring program.

ERSP reviewed broadcast and online advertising for iGrow and identified several claims for review, including:

  • “Keep the hair you have, no matter what genetics say. iGrow can help you delay the appearance of premature hair loss, and maintain strong, healthy hair through the years.”
  • “Within 12 weeks of using iGrow™ as directed, most consumers report that they experience the cessation of excess hair loss. The appearance of thicker, fuller, and healthier hair is typical within 24 weeks (6 months) of LLLT.”
  • “Studies proved that hair responds best to red light in the 650 - 670 nm wavelength range.”
  • “...provides consistent, full scalp coverage to ensure optimal results.”
  • “The iGrow can be used by anyone, men, women, any age, anyone with hair loss or hair thinning or worried about losing their hair.”
  • “It’s proven: Most men and women prone to genetic hair thinning will benefit from low-level lasers. It's an amazing technology that can rejuvenate hair or delay the onset of thinning hair.”

As support for the performance and establishment claims at issue in the inquiry, Apira Science submitted several studies on the effects of low-level laser therapy (LLLT), the main technology behind iGrow.

Following its review of the evidence in the record, ERSP determined that the marketer provided adequate substantiation for its general claims of product efficacy and its safety claim. However, ERSP found that the evidence could not support claims regarding the effectiveness of the iGrow on women and users of “any age.”

Further, ERSP noted inconsistencies within the advertising regarding the amount of time in which consumers can expect to see results.

ERSP also found the marketer was unable to support the claim that iGrow “…has an equivalent output to most in office hair lasers” and will revitalize hair on the sides of the head.  ERSP recommended the marketer modify or discontinue these claims.

The company, in its marketer’s statement, said “Apira Science, Inc. appreciates the opportunity to participate in the Electronic Retailing Self Regulation Program's ("ERSP") self-regulatory process … We will make appropriate modifications to advertising for iGrow in accordance with ERSP's recommendations.”