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In connection with its new guidelines
on "dial-around" advertising, the FCC issued this
compilation of misleading claims gathered by its staff.
EXAMPLE # 1 - All Day, All Night?
The headline of a direct mail ad for a dial-around service reads,
"All day. All night. All calls. 10¢ a minute."
In fact, the rate is applicable only for state-to-state calls
after 7:00 p.m. and on weekends. Even an otherwise prominent
disclosure to that effect will likely not be sufficient considering
that the disclosure directly contradicts the express, and false,
representations in the headline.
EXAMPLE #2 - Minimum Charges An advertisement conveys
the message that long-distance calls cost 10¢ a minute.
In fact, all calls are subject to a 50¢ minimum charge.
Given that reasonable consumers would likely conclude from
the "10¢ a minute" representation that a one-minute
call would cost 10¢, and would not expect there to be
a substantial additional charge, the advertiser's failure
to clearly and conspicuously disclose the minimum fee in the
ad would likely be deceptive.
EXAMPLE #3 - Monthly Fees An advertisement says that
long-distance calls cost 10¢ a minute. In fact, that
rate is only available if customers pay a $5.95 monthly fee.
Because the imposition of the monthly fee would significantly
increase the consumer's per-minute charge, the advertiser's
failure to clearly and conspicuously disclose the monthly
fee in the ad would likely be deceptive.
EXAMPLE #4 - Cost After Initial Promoted Calling Period
A company advertises "all calls up to 20 minutes for
only $1.00," but charges 10¢ for each additional
minute. Consumers are likely to be misled by the affirmative
claim in the absence of a disclosure about the significantly
higher rate after 20 minutes. Because many consumers will
make calls that last longer than 20 minutes, the cost of each
minute beyond the first 20 minutes' duration of a call is
information that likely would be material to consumers considering
whether to use the service. Thus, the advertiser's failure
to clearly and conspicuously disclose in the ad the per-minute
rate for calls longer than the initial calling period would
likely be deceptive.
EXAMPLE #5 - Time Restrictions A company's advertisements
prominently feature the phrase "10¢ a minute."
In fact, the 10¢ a minute rate is good only between 7:00
p.m. and 7:00 a.m. Consumers are likely to view this time
limitation as a significant restriction on the availability
of the advertised 10¢ a minute rate. The advertiser's
failure to clearly and conspicuously disclose the limited
hours in the ad would likely be deceptive.
EXAMPLE #6 - Promotional Rates A company's advertisements
prominently feature the phrase "5¢ a minute."
Peel-off stickers featuring the "5¢ a minute"
offer accompany the advertisement. In fact, the 5¢ a
minute rate is a special promotional offer good only for 60
days. Consumers are likely to view the limited duration of
the 5¢ a minute rate as a significant qualification.
The advertiser's failure to disclose clearly and conspicuously
this limitation in the ad would likely be deceptive. Furthermore,
in this instance, the use of peel-off stickers advertising
the 5¢ a minute rate without adequate disclosure of the
limited duration of the offer would likely be deceptive because
the stickers would remain on consumers' telephones long after
the promotional rate had expired.
EXAMPLE #7 - Geographic Restrictions A company advertises
a "10¢ a minute" rate. In fact, that rate is
good only for state-to-state calls, and in-state calls may
be charged at a significantly higher rate. The failure to
clearly and conspicuously disclose in the ad, for example,
that "in state rates may be higher," would likely
be deceptive.
EXAMPLE #8 - "Basic Rates" A company offers
consumers a directory assistance service for 99¢. According
to the television ad, callers who use this service can be
connected to the requested number at no additional charge.
In fact, consumers who opt to be connected to the requested
number are connected via the advertiser's network and are
billed at the advertiser's more expensive per-minute rates.
This information is disclosed only by a superscript reading
"basic rates apply." Reasonable consumers would
expect to pay the promoted 99¢ charge, but would not
likely expect to pay a charge greater than the amount their
selected long-distance carrier would charge for a call to
the requested number. Because the consumer will be charged
a rate higher than the consumer's presubscribed rate, use
of the term "basic rates apply," even if clearly
and conspicuously disclosed, would not likely be sufficient
to avoid deception. The advertiser's failure to disclose that
the consumer will be charged a rate higher than the consumer's
presubscribed rate would likely be deceptive.
EXAMPLE #9 - Comparative Price Claims In an advertisement
in a daily newspaper, an advertiser conveys the message that
its rates are the lowest, using a chart that compares its
per-minute rate to the rates offered by two competitors. The
stated rate of one of the competitors is three months old,
and the stated rate of the other is eight months old. By representing
the competitors' rates, the advertiser is implying that those
rates are reasonably current. If the information upon which
the ad is based is outdated and the rates have changed materially,
the ad would likely be deceptive.
EXAMPLE #10 - Use of Toll-Free Numbers A television
advertisement for a long-distance calling plan prominently
features the phrase "10¢ a minute" as a graphic
and in the narration read by the spokesperson. The ad gives
a toll-free number and tells consumers "call now to switch."
In fact, the 10¢ a minute rate is good only between 7:00
p.m. and 7:00 a.m. The inclusion of a superscript that reads
"call for restrictions" would not likely be effective
to qualify the claim.
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