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Friday, June 26, 2015

ERSP Recommends Rich Dad Education, Inc. Modify Certain Testimonials Claims for Real Estate Education Program

The Electronic Retailing Self-Regulation Program (ERSP) has recommended that Rich Dad Education, Inc.,  modify or discontinue certain claims made in student testimonials featured at the  Rich Dad Education website.

ERSP is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus, Inc. The marketer’s advertising came to the attention of ERSP through an anonymous competitor challenge.

ERSP reviewed advertising claims that included:

  • “Rich Dad Education's Free Workshops are eye-opening, 2-hour sessions with the definite potential to change your life for the better!”
  • "FinFreedomBound – Profit: $72,500”
  • “WholesalePro – Profit: $20,383”

ERSP also reviewed claims made during free live seminar events, including:

  • Claims that the presenter would teach consumers how to do a wholesale real estate deal and make $10,000 in the next 60 days

ERSP was primarily concerned with the specific quantified profits earned by former and current students that are being featured on the “Real Estate Deals” tab of the website. ERSP noted that there appear to be two different categories of deals – “Deals of the Month” and “Most Recent Deals.” The only apparent distinction between the two categories is that the “Most Recent Deals” contains an asterisk that leads to a disclosure at the bottom of the webpage. With respect to the “Deals of the Month” category, there is no apparent accompanying disclosure language to indicate whether or not these particular results are typical, and, if not, a disclosure of the amount of money they may expect to earn from using the program.

In general, when reviewing direct response marketing in the real estate investing industry, ERSP takes a broad approach and looks at the messages communicated as a whole, across all medium of marketing. Generally, the key issue before ERSP in this particular product category is whether the advertising at issue conveys specific express or implied earnings expectations to consumers, aside from the general message that they could earn money using the techniques outlines by the program.

In this instance, ERSP noted its concern about the lack of any clear and conspicuous disclosures concerning the typical results consumers can generally expect to achieve from using the product.
ERSP as well determined that the performance claims that formed the basis of inquiry did not communicate any specific express earnings expectations for consumers besides the general message that they can earn money using the techniques taught at the Rich Dad Education program.

ERSP acknowledged that the marketer possesses survey results to demonstrate that students of Rich Dad do indeed experience success. However, ERSP noted that the potential for consumer uncertainty exists because the disclosure in the advertisement notes that the stated results are predicated on the purchase of advanced training courses and this may not be apparent to a consumer who is simply interested in the free live event and the possibility of earning supplemental income.

ERSP recommended that the marketer refrain from making quantified earnings claims without clearly and conspicuously disclosing what students of the program can typically expect to earn. ERSP additionally recommended that Rich Dad discontinue the use of such unverified testimonial claims in its advertising material and at free live seminars.

The company, in its marketer’s statement, said that it “takes seriously our obligations to our students and the consuming public and strive to be honest, open, and in compliance with our legal obligations” and that it “has removed the ‘Real Deal from Real Estate Investors in Real Estate’ webpage from its website for reasons independent of ASRC’s Review and it is our present intention not to host such a page on our website in the future whereby it could be construed that Rich Dad Education was making implied claims regarding the amount of monetary success achievable by our students without ensuring that all appropriate disclaimers were provided.”

Monday, June 15, 2015

ERSP Finds Guthy-Renker Can Support Performance Claims for “Cold Plasma Sub-D”

The Electronic Retailing Self-Regulation Program (ERSP) has determined that Guthy-Renker can support performance claims for Cold Plasma Sub-D, a topical cream intended to sculpt and tighten the appearance of skin along the chin and jawline.

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 claims for Cold Plasma Sub-D, including: 
  • “Results you can expect to see [are]: Visibly tightening of the appearance of sagging, loose skin and improved appearance of double chin”
  • “Visibly more crisp appearance of the chin and jawline, imparting an overall more youthful looking face"
  • “Visibly improved appearance of lines and wrinkles on the neck and décolletage with noticeable improvement in overall skin texture
  • “Sub-D is specifically formulated for the area called the submandibular. Often neglected, the skin in this area has unique needs and Cold Plasma Sub-D helps tackle the most common signs of aging on the chin, jawline, neck, and décolleté."
  • “I saw results within a week.”

As support for the performance and establishment claims at issue, the marketer submitted the results of consumer usage studies conducted on the product itself. Guthy-Renker also provided ERSP with several articles on the benefits of the individual ingredients in Cold Plasma Sub-D contained in the product formulation as support for its position.

While ERSP did conclude that, based upon the collective materials in the case record, the marketer provided adequate support for its general performance claim that specified the specific benefits from using Cold Plasma Sub-D, ERSP determined that it would be material for consumers to know that the claim was based on a consumer usage study and, accordingly, this information should be disclosed conspicuously, in close proximity to the claim.

ERSP noted Guthy-Renker’s voluntary modifications to the two consumer testimonials at issue in the subject matter (“After six weeks, my jawline appeared more defined and the sagging, loose skin under my chin is tighter and has a more youthful appearance" and “I saw results within a week.”). Although the marketer maintained that the depiction of product performance after one week was not a core claim in the advertising, ERSP did not agree. It was concluded that the communication of product performance that can be typically expected by consumers is a fundamental and pivotal component of the Cold Plasma Sub-D advertising. ERSP also determined that the marketer’s commitment to voluntarily modify the consumer testimonial attesting to the expected results “within a week” of using Cold Plasma Sub-D to more clearly communicate the limitations of the consumer usage study was warranted. 

The company, in its marketer’s statement, said, “Guthy-Renker is very pleased with ERSP’s determination that all of the challenged claims for Cold Plasma Sub-D are substantiated, and that the changes Guthy-Renker voluntarily agreed to make in relation to certain disclaimers are appropriate. Guthy-Renker is a long-time supporter of the self-regulatory process and appreciates ERSP’s review.”