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2015 Lessons Learned, 2016 Practical Tips

NAD >> Many Challenges and Big Changes for the NAD

April 19, 2016

2015 was another eventful year for the National Advertising Division of the Council of Better Business Bureaus (the NAD). Fifty-six competitor challenges were filed, most involving dietary supplements, drugs and health aids, and telecommunication products and services.

Despite the caseload, a series of revisions to the NAD’s procedures stole the spotlight. In April 2015, a working group of two American Bar Association committees released a report recommending extensive changes to the NAD’s procedures to make the NAD work “even better.” The NAD subsequently revised its procedures to reflect several of the working group’s recommendations.

The most significant revisions included:

  • Revisions to Challenge Process: The NAD took several steps to expedite the NAD challenge process. The revised procedures establish a scheduling conference at the outset of each challenge to set the timing for all filings and meetings, limit the scope of all case filings to 20 pages, and require challengers to identify all express and implied claims to be considered by the NAD. In addition, the NAD must now issue a decision within 20 business days.
  • Revisions to Advertiser’s Statement: The NAD also took steps to ensure that the Advertiser’s Statement would not be a forum for new or renewed arguments. Should the NAD require an advertiser to modify and/or discontinue any of its advertising claims, the advertiser must state whether it: (1) agrees to comply with the NAD’s recommendations; (2) will not comply with the NAD’s recommendations; or (3) will appeal the NAD’s decision to the National Advertising Review Board (NARB). Although the advertiser may still include a supporting statement, that statement must be extremely concise and must not reargue the merits of the case, mischaracterize the decision, or contain new facts.
  • Revisions to Appeal Process: The revised procedures also affect appeals before the NARB. Specifically, NARB appeals may now contain new arguments and cite to precedent not referenced in the appellant’s original submissions. Moreover, the NAD may no longer be a party to NARB appeals of NAD decisions in competitive challenges. Instead, participation is limited to the challenger and the advertiser.

Looking Ahead

  • In light of revisions to the NAD’s procedures, marketers should expect NAD challenges to be considerably more efficient, NARB appeals to be more equitable, and Advertiser’s Statements to lack their typical objections and counterarguments.
  • As a result of these significant changes, the self-regulatory process promises to be even more popular in 2016.