A Guide For The Media

 Direct Marketing Association The Federal Trade Commission

 US Postal Inspection Service

ADVERTISEMENTS

SCREENING

Dear Publishers and Broadcasters:

Fraudulent ads cost publishers and broadcasters, legitimate

advertisers and direct marketers, and consumers millions of

dollars each year. Government agencies and self-regulatory

groups can step in once the law has been violated, but only

the media can stop false ads before theyíre disseminated.

Thatís why the Direct Marketing Association, the Federal

Trade Commission, and the United States Postal Inspection

Service encourage the media to do their part in the fight

against fraud by adopting in-house clearance standards to

screen out deceptive ads. We also encourage direct mail

professionals to use the same common sense standards

before renting or exchanging customer lists.

Most businesses, including mail order businesses, are

legitimate. Unfortunately, however, some promoters use the

legitimacy of mail order businesses and respected

publications and broadcast outlets as covers for illegal

activity, including criminal mail fraud. Your best defense?

Establishing in-house clearance standards to help your sales

staff spot fraud before an unscrupulous operator smears

your good name.

Most broadcasters and publishers already screen ads for

taste and appropriateness. The extra moment that it takes to

scan the content is time well-spent because the companies

that rip off consumers may rip you off, too. An effective

screening program also is a service to the public and legitimate advertisers. When consumers are disappointed because a product doesnít perform as advertised, they may

blame the publication or station that ran the ad. The consequences? An angry consumer who may cancel a subscription, turn you off, or tune you out. A crimp in the credibility of your legitimate advertisers. And a smudge on the

reputation for accuracy that your company has worked so

hard to earn.
Effective ad clearance standards reduce the damaging effects

of advertising fraud on American consumers and commerce.

We are pleased to offer this booklet with tips for screening out

deceptive ads, including some buzz words and phrases that

often are used in particular kinds of false or misleading advertisements. We hope you will pass it along to the appropriate

people on your staff, and that the tips help protect your company and your customers from fraud.

Sincerely,

H. Robert Wientzen

President & CEO

Direct Marketing Association, Inc.

J. Howard Beales, III

Director, Bureau of Consumer Protection

Federal Trade Commission

Kenneth Weaver

Chief Postal Inspector

United States Postal Inspection Service
Fraudulent claims can show up in ads for a wide variety

of products and services. Most use similar terms and

techniques to entice a reader, listener, or viewer to

respond favorably to an ad. This publication includes general

tips on how to screen ads effectively and particular tip-offs ó

ìbuzz wordsî or techniques ó to help you identify some of the

most common types of deceptions that are found in ads for getrich-quick schemes, weight loss fraud, health fraud, credit

repair and loan scams, travel fraud and product

misrepresentations. By learning to spot the tell-tale signs of

fraudulent advertising, you can protect your customers, your

bottom line, your reputation, and the good name of your legitimate advertisers.

One evaluation standard applies to all ads: Does the offer,

promotion, payoff, or benefit sound too good to be true? If you

use this standard, and if you exercise caution when you spot

some of the buzz words and techniques revealed in this booklet,

thereís a good chance that youíll be able to spot a questionable

ad or promotion with just a quick look, and an even better

chance that youíll be able to stop it before it gets into print, on

the air, or in the mail to your customers.

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Screening Tips

1

1 If an advertiser refuses to answer your questions or to

make changes in the ad, it may be a tip-off to a deception.

You have the right to reject an ad for any reason.

2 Trust your gut: experience sharpens intuition. If you

have a feeling that you should check out an ad, do it. Donít

let it slip by.

3 Donít let your guard down around deadline time. Fraudulent advertisers know when youíre at your busiest and may

try to slip one past you at the last minute.

4 Ask to see a sample of the merchandise if the ad is even

slightly suspicious. Legitimate advertisers usually welcome

the opportunity to show you their products. Get a production sample, not a handmade mockup. If the advertiser

cannot submit the sample before the closing date, pass up

the ad until the next closing date.

5 If an ad is unclear to you, it will be unclear to your

readers, listeners or viewers. If you donít know the

nature of the product or service offered, ask the advertiser

for clarification. Your request for information may deter

some unscrupulous advertisers and may help legitimate

businesses clarify any unintended vagaries before an ad is

disseminated to their customers (and yours).

6 Is the copy outlandish? Are the claims too good to be

true? Perhaps the advertiserís creative team needs a refresher on the ìrules of the road.î

7 Verify the integrity, stability, and performance of new

advertisers, especially when they make an unusually large

media buy. Scam artists are in it for the short term. Once
theyíve made a quick buck, they often skip town, leaving

dissatisfied customers and unpaid bills in their wake. So

check out the credit. Check out the source.

8 Check out the fine print. Dense blocks of tiny text and

fleeting TV supers arenít just annoying ó they may be

illegal. The law requires disclosures and disclaimers to be

ìclear and conspicuous.î That means big enough for

consumers to read and understand.

9 Watch out for the asterisks and footnotes. A disclosure

at the bottom of a page wonít cure an otherwise deceptive

ad.

10 Ads with glowing consumer testimonials, whether they

deal with dramatic weight loss, disease cures, or extravagant financial success, can sometimes be a tip-off to deception. This can be true for before-and-after photos, too.

Under truth-in-advertising laws, advertisers must have

proof that consumers who use the product at home will get

the same results as the endorsers featured in the ad or they

must clearly disclose the results consumers will get. When

you see a testimonial, ask the advertiser for proof that

consumers generally will achieve the level of success

described or depicted. A fine-print disclosure that ìYour

results may varyî isnít enough.

11 Get the street address and telephone number of every

advertiser. In many cities ó New York, for example ó a

post office box number must be accompanied by a street

address. If the company is small, get the home address and

telephone number of the principal.

12 Check out street addresses. Knowing that a post office

box may arouse suspicion, some unscrupulous advertisers

may use the street address of a private mail receiving

company as their own. Keep a list of the street addresses of

the private post offices in your area. Ask any advertiser

who offers an address that is a private post office location

2
to provide the companyís actual street address and phone

number.

13 Be careful of advertisements without an address that

require consumers to use a toll-free number and credit card

to order merchandise. This method of payment may be an

attempt to avoid using the mail as a way around the jurisdiction of the Postal Service.

14 Watch out for ads that use international telephone numbers. Some international numbers look like domestic

numbers. For example, dialing ì809î and a seven digit

number reaches the Dominican Republic. Because each

country sets its own telephone rates and may have substantially higher rates than in the U.S., consumers may unknowingly end up with hefty phone bills. Keep a list of

U.S. area codes handy or look up unfamiliar codes in the

phone book to check whether a number is domestic or

international. Make sure that all ads for international calls

clearly state that international long distance rates apply,

even though the calls look like domestic numbers. Donít

accept cryptic and possibly misleading disclosures like ìLD

rates applyî or ìtoll line.î

15 Be leery of ads that suggest or imply product endorsement, approval or testing by a government agency or

other nationally known firm or organization. This technique often is used to lend credibility to fraudulent operations. Most government agencies do not approve or endorse specific products. And in some cases, itís a crime to

suggest a government affiliation or misuse an official

symbol. Question ads that:

✗ use graphics that copy the look of an official government

notice or announcement. Sometimes these ads depict the

Statue of Liberty, eagles, official-looking seals, or other

government symbols;

✗ use an official-sounding name (like Commission, Society,

or Institute) or a name that sounds or looks like a wellknown national firm or organization.

3
4

16 Be wary of an advertiser who pays you with a bounced

check. Even if they come up with the cash later, it may

signal a disregard for ethical business practices. At the

same time, just because the check clears doesnít mean the

company is legit. Your reputable advertisers, as well as

your subscribers or viewers, are counting on you to say no

to the scam artists ó even the ones smart enough to pay

their media costs upfront.

17 The Better Business Bureau where the company is based

might be able to alert you to consumer complaints. Steer

clear of companies that have already racked up a list of

dissatisfied customers.

18 Some credit groups and other organizations issue up-to-theminute alerts about scam artists and advertisers that arenít

creditworthy. Media that subscribe to these services also

can call to check on complaints about a particular company.
Deceptive investment, business opportunity or employment

ads capitalize on consumersí financial needs, naivete,

and optimism ó and their widespread fantasies of hitting

the jackpot. The level of risk usually is proportional to the size of

the return. Any representation of high earnings with little or no

risk, skills, or training is likely to be false and misleading. In short,

in the world of investments, thereís no such thing as a sure thing.

Get-Rich-Quick Schemes

5

Types of Scams

Many business opportunites and investments ó including some

listed below ó can be legitimate. But scam artists have been

known to operate in these areas:

✗ Work-at-home promotions

✗ Medical billing services

✗ Display rack or vending machine businesses

✗ Invention promotion

✗ Art, coins, stamps, or other ìcollectiblesî

✗ Prize promotions

✗ Services offering scholarships, grants, or student loans

✗ Gold, silver, platinum, and ìstrategic metalsî

✗ Recovery room operations ó firms that claim they will

recover investments or money lost in earlier scams

The Buzz Words

Anybody Can Do it

Quick and Easy, No Selling

Big, Fast Profits

No Experience Needed

Work in the Comfort of Your Home

Work in Your Spare Time

Make Big Money Working as Your Own Boss

You Purchase at Wholesale, Then Resell at a Huge Profit

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6

✗ ìGovernment productsî ó auctions featuring cars or real

estate at ìbargainî prices and services that claim to have

the ìinside scoopî on government jobs, government

contracts, or small business loans.

Techniques to Watch Out For:

✗ Ads that tout seminars promising ìno money downî

real estate investments, the ìsecretsî of day

trading, or other ìsystemsî for quick and

easy financial success.

✗ Graphic depictions of fists full of dollars,

mansions, yachts, or other trappings of

ìthe good life.î The bolder the picture or

claim, the less legitimate the ad is likely to be. Just how

did some of these advertisers make their fortunes? You

guessed it: Selling phony get-rich-quick schemes to

unsuspecting consumers.

✗ Employment ads that offer the ìinside trackî on government jobs, promise salaries of ìup toî thousands of

dollars per month, or guarantee high-paying careers in

ìglamourî industries like cruise lines, modeling, or

international business.

✗ Consumer testimonials detailing fabulous success stories.

This kind of advertising implies that the experience is

typical for consumers using the product or service. When

you see a testimonial, ask to see the advertiserís proof

that consumers in general will achieve the level of success described or depicted in the ad. For every success

story, how many others lost their life savings?

✗ Ads that focus on doomsday warnings about the predicted

ìcollapseî of the economy and promise financial security

in gold, silver, or ìstrategic metals.î

✗ Ads for coins, stamps, art or collectibles that promise

overnight profits and offer unlimited buy-backs and

unconditional guarantees.

✗ Ads that promise big money from ìno riskî investments

in the Internet or other ìhigh techî opportunities.

✗ Ads that promote distributorships or ìexclusive territoriesî for name-brand merchandise.

✗ Ads that promise financial freedom for restocking display

racks in shopping malls or convenience stores.

!
7

Despite claims to the contrary, there are no magic

bullets or effortless ways to burn off fat. The only

way to lose weight is to lower caloric intake and

increase physical activity. Claims for diet products or programs that promise weight loss without sacrifice or effort are

bogus. And some can even be dangerous.

These facts do not keep fraudulent advertisers from preying on

consumers and reaping billions of dollars

each year. While the scams may vary

(for example, pills, patches, clips,

body wraps, insoles or ìdiet teasî),

the claims are almost always the

same ó dramatic, effortless

weight loss without diet or

exercise.

Weight Loss Fraud

The Buzz Words

No Diet! No Exercise!

Lose 30 Pounds in 30 Days

Eat Your Favorite Foods and Still Lose Weight

Shrinks Inches Off Your Stomach, Waist and Hips

Scientists Announce Incredible Discovery!

Revolutionary European Method! Ancient Chinese Secret!

Turn on Your Bodyís Fat Burning Process

Automatically Convert Fat to Lean Trim Muscle!

Absorbs Fat

Developed After Years of Secret Research

New Scientific/Medical Breakthrough
8

Techniques to watch out for:

✗ Extravagant claims of dramatic, rapid weight loss.

✗ Testimonials from ìfamousî doctors, researchers or

other medical experts.

✗ Dramatic before-and-after photos depicting substantial

weight loss.

✗ Ads that tout the latest trendy ingredient in the headlines.

✗ A footnote hidden somewhere in an ad noting ìdiet and

exercise required.î Remember: You canít cure an otherwise misleading ad with a buried ìdisclosureî or a

fleeting video super.

Disclosure

Misleading Misleading

Ad!
9

Health Fraud

No product on the market can guarantee sexual prowess,

erase wrinkles, or cure cancer, Alzheimerís disease,

arthritis, or AIDS and HIV infection. And yet vulnerable consumers fall prey everyday to unscrupulous marketers

who exploit their fears and boost their hopes, all in the name of

a fast buck. In addition to wasting their money, these consumers

may be wasting valuable time before they seek proper treatment.

Even worse, some products may cause serious harm and

endanger lives.

Thatís why itís

important to approach

ads that tout treatments or

cures for serious conditions

or diseases with particular

caution. Ask to see an advertiserís

support for extravagant claims. By

law, advertisers must have solid evidence

for health claims BEFORE they run an ad.

And ask yourself this question: If a medical

breakthrough has occurred, would you be hearing

about it for the first time from someone placing an

advertisement?
10

Techniques to Watch Out For:

✗ Ads for products that promise to treat baldness, relieve

stress, cure impotence, improve eyesight, slow the

aging process, or offer other easy answers to difficult

problems.

✗ Testimonials from ìfamousî medical experts.

✗ Case histories from ìcuredî consumers claiming

amazing results. Such testimonials also imply that their

experience is typical for consumers using the product

or service. When you see a testimonial, ask for proof

of its ìtypicalî nature.

✗ Dramatic before-and-after photos.

✗ A laundry list of diseases or conditions the product

cures or treats.

✗ Ads that tout the latest trendy ingredient in the

headlines.

✗ Ads that make extravagant claims for doctors or

minimize the risk of medical procedures.

✗ Ads that offer ìnaturalî treatments for serious conditions like arthritis, diabetes, cancer, heart disease, or

HIV. Remember ó ìnaturalî doesnít necessarily mean

ìsafe and effective.î

✗ Promotions for pills that promise to ìcureî kids of

hyperactivity, AD/HD, or learning disabilities.

The Buzz Words

New Scientific Or Medical Breakthrough

Tested All Over The World

Clinically Tested In Europe

Has Doctors/Researchers Astounded

Developed After Years Of Secret Research

Proven To Provide Immediate Results

Secret Cure The ìMedical Establishmentî Wants To Suppress
11

No one can legally remove accurate, current and

verifiable negative information from a credit report.

In fact, the law does not allow credit repair marketers

to accept payment before they deliver their services. Yet,

everyday, companies throughout the country use advertisements

to entice consumers with poor credit histories to buy their

ìrepairî services.

Credit Repair and Loan Scams

The Buzz Words

Credit Problems? No Problem

We Can Erase Your Bad Credit ó 100% Guaranteed

Create A New Credit Identity ó Legally

We Can Remove Bankruptcies, Judgments, and

 Liens From Your Credit File Forever

No Credit? No Income? No Problem!

$100 To $10,000 With Just Your Signature

Loans Guaranteed Regardless Of Poor Credit Or Low

Income

Some advertisers claim that by continually challenging essentially

accurate information, they can badger credit agencies to remove

unfavorable information from a consumerís credit report. They

cannot. Other companies claim that they can create for consumers a whole new credit file that doesnít contain their credit

history. Typically, they promise to beat the system by getting

consumers an Employer Identification Number from the IRS.

This dodge doesnít work ó and itís illegal.

Fraudulent advertisers also may prey on consumers or small

businesses with credit problems through ìadvance feeî loan
12

scams. These ads typically offer ìguaranteedî loans regardless

of income or credit history. The catch? They charge a hefty upfront fee to ìprocessî the loan, but never come forward with the

cash. Legitimate lenders donít require up-front payments before

extending credit and they donít promise loans in their ads. So

watch out for ads that offer fast money without regard to credit

or collateral.
13

Fraudulent travel ads usually offer exciting opportunities at

unrealistically low prices (Hawaii for $29.95!). But ads

for these ìfreeî or bargain-priced vacations often fail to

disclose expensive ìcatchesî or restrictions that may render the

deals worthless.

Techniques to watch out for:

✗ A vacation offer accompanied by a certificate for free or

very low cost travel.

✗ Vacations offered as part of a too-good-to-be-true prize

promotion. That ìluxury speedboatî may turn out to be

an inflatable raft.

✗ Travel packages that advertise ìfreeî hotel accommodations with the purchase of airline tickets. A careful look

at the fine print may reveal that the offer is good only

with the purchase of expensive ìfull fareî tickets.

Travel/Vacation Fraud
14

✗ Vague descriptions of services and accommodations.

✗ Memberships in ìtravel clubsî touting suspiciously low

rates for airfare and hotels.

✗ In ads for timeshares or other vacation property, unrealistic claims about investment potential or resale value. And

watch out, too, for ads that include ìartistsís renderingsî

of ìplanned facilities.î
15

Product misrepresentations in ads can be difficult to

detect. When in doubt, ask to see a product sample

and evidence for the claim.

When you look at the sample, make sure it looks like the depiction in the ad and performs as stated or shown. When you ask

for evidence for the claim, know that the law is on your side.

Broadcasters and publishers have the right to insist on modifications before agreeing to run an ad or to turn down an ad altogether. Furthermore, the law requires companies to have adequate support for the claims made in the ad before the ad is

run, so legitimate advertisers wonít be surprised by your request

to see some back-up information.

A list of agencies that may be able to help you evaluate the

validity of advertising claims is on pages 19-20. Even though

these agencies may not be able to tell you whether a particular

company or product is under investigation, they may be able to

share information about previous cases or similar products or

claims. Bear in mind that many scam artists try to outrun the law

by changing their corporate name or the brand name of a bogus

product. Just remember that snake oil is still snake oil ó even

when itís poured into new bottles.

You may want to check out the websites of the agencies and

consumer organizations listed at the back of this brochure. Itís an

easy way to keep yourself up-to-date on the latest scams.

Be wary when you see ads that:

✗ Advertise merchandise way below market value for a limited

time only. This technique often is used to advertise electronics, computers, or other high-ticket merchandise that can be

ordered only by phone.

✗ Feature merchandise with names that sound or look like

nationally recognized brands.

Product Misrepresentations
16

✗ Offer vague descriptions of products.

✗ Tout name-brand merchandise at ridiculously low prices

or through unusual avenues. For example, does it really

make sense that a national retailer would promote its

products at cut-rates in a three-line classified ad?
17

Consumers often see the publication or station that

carries an ad as the messenger of the advertiser,

especially if they are dissatisfied with the product or

service. Angry or disappointed, they may cancel their subscription or tune to a different station. The potential loss of goodwill

may be reason enough to establish a procedure for handling

complaints.

If the complaint is nondelivery of merchandise caused by an

honest miscalculation of the success of an offer, a strike, or a

production mishap, a straightforward explanation from the

advertiser usually is sufficient. Unfortunately, not all delivery

problems stem from honest mistakes. Sometimes non-delivery

issues indicate that the advertiser is in financial trouble or has

decided to ìtake the money and run.î

Complaints

How to Appraise & Handle Them

If merchandise has been misrepresented, check your own screening procedures. Be aware that for every complaint you receive,

more consumers have had similar unhappy experiences. When

the number of complaints is out of proportion to the size of the

ad or the size of the audience, contact the advertiser, advise your

credit department, and inform your local Better Business Bureau

or consumer protection agency.

In addition, contact your state consumer protection agency, your

state attorney general, the Federal Trade Commission, or the

Postal Inspection Service. Complaints from the public and media

alert these agencies to a pattern of deception that may warrant

further investigation. Their phone numbers are listed at the end

of this brochure.
18
No publication or station wants to be an unwitting conduit for deceptive claims. Likewise, list professionals

do not wish to unknowingly assist in promoting misleading direct marketing promotions. The best defensive

weapon in your arsenal is your gut instinct that a particular ad

promises more than it could possibly deliver. Your companyís

own credit department, business office, or consumer reporter

also can be excellent sources. And www.consumer.gov puts a

wealth of information at your fingertips.

To check out the history, business practices, or general reputation of a firm submitting questionable advertising, contact:

The Better Business Bureau (in the advertiserís area)

State or local consumer agencies

Your state attorney generalís office

Postal Inspector (in the advertiserís area)

Trade Associations

Other organizations that may be able to help you evaluate the

validity of an advertising claim include:

Direct Marketing Association, Inc.

1111 19th Street, NW, Suite 1100

Washington, DC 20036-3603

www.the-dma.org

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

www.ftc.gov

United States Postal Inspection Service

P.O. Box 96096

Washington, DC 20066-6096

www.usps.gov

Resources

19
North American Securities Administrators Association

10 G Street, NE, Suite 710

Washington, DC 20002

www.nasaa.org

Food and Drug Administration

5600 Fishers Lane, Room 1685

Rockville, MD 20857

www.fda.gov

Council of Better Business Bureaus

4200 Wilson Boulevard

Arlington, VA 22203

www.bbb.org

Commodity Futures Trading Commission

1155 21st Street, NW

Washington, DC 20581

www.cftc.gov

Securities and Exchange Commission

450 Fifth Street, NW

Mail Stop 11-2

Washington, DC 20549

www.sec.gov

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