Consumer Groups Can Help Keep Ads Fair, Pitofsky Tells Hubbard Awards Ceremony

For Release

The Chairman of the Federal Trade Commission told a consumer ad-monitoring group today that recent FTC action against false or unsubstantiated ad claims for products like "Miracle-Ear," Dannon Yogurt, STP motor oil additive and Sierra Antifreeze signal that the agency is "the cop walking the nation's ad beat." Speaking at the Harlan Page Hubbard Lemon Awards ceremony, Robert Pitofsky said that while national advertising is much improved since the "free-fire zone" of the seventies, "[t]here is still work for agencies like the FTC, State Attorneys General and the industry self-regulatory bodies to do." Pitofsky also said the FTC will try to devise more creative remedies to prevent or correct deceptive ad claims.

Pitofsky told the audience that consumers deserve to be able to rely on the claims made in advertising, whether they are for "low fat" desserts or "high octane" gasoline.

Pitofsky commended the Hubbard awards -- an annual event at which consumer groups spotlight advertising claims they believe are misleading. "These occasions are an opportunity for consumer groups to talk back to their TV sets and give their side of the story to both advertisers and government," he said. "In addition, over the years, some of these awards have resulted in law enforcement actions by the FTC, states or self-regulatory bodies."

The FTC Chairman emphasized FTC efforts to obtain greater assistance from the media in policing ads to prevent deceptive claims from running in the first place. He added that the cable TV industry recently pledged to make media screening for advertising a priority in 1996.

Pitofsky said that FTC settlements in just the past few weeks demonstrate that the agency is taking a tough enforcement stand. A recent FTC settlement with Dahlberg, Inc., the maker of the "Miracle-Ear Clarifier," to halt false and unsubstantiated advertising claims garnered a $2.75 million civil penalty -- the largest in FTC history. In another settlement of an order violation, the agency obtained $888,000 in civil penalties from First Brands Corporation over false and unsubstantiated claims for "STP Engine Treatment with XEP2." The agency also recently entered into a settlement with Dannon Yogurt for false and misleading claims about the fat and calorie content of some products in its "Pure Indulgence" line which included a $150,000 disgorgement to the U.S. Treasury. Another settlement was recently reached with Safe Brands Corporation, Warren Distribution and ARCO Chemical Company over unsubstantiated safety and environmental benefit claims for Sierra Antifreeze.

Noting that preventing deception is a shared responsibility of government, industry and consumer groups, Pitofsky said that consumer watchdog organizations also make a contribution to keeping advertising responsible.