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These articles by Barbara Fox were published in U.S. 1 Newspaper on September 2, 1998. All rights reserved.
Defending Direct Mailers
An ad agency can be held liable for a client’s false
claim, says Charles B. Chernofsky, who has opened an office
concerned with direct mail, advertising, and regulatory compliance
in Suite 505 at 47 Hulfish Street (609-279-0445; fax, 609-279-0448).
"The biggest mistake you can make is thinking that you are small
and that no one will notice you," says Chernofsky. If the bad
claim is made by direct mail, "you’re toast." The Postal Service
really likes to attack the little guys, he says, "because they
don’t put up a fight."
A partner in the New York City law firm of Chernofsky & deNoyelles,
Chernofsky has 30 years experience in the legal ramifications of direct
mail and advertising. He grew up on Long Island, where his father
had a clothing store chain. An alumnus of Hofstra, 1963, he went to
law school at Syracuse.
He has concentrated on direct mail since 1973. He reviews print and
television advertising for compliance with federal and state laws
and regulations. He represents mailers and advertisers before virtually
every state attorney general and such federal agencies as the Federal
Trade Commission, Food and Drug Administration, Department of Agriculture,
Environmental Protection Agency, and the United States Postal Service.
Among the areas he covers: direct mail, television spots, infomercials,
space, franchise and business opportunities, telemarketing, door to
door sales, sweepstakes, and Internet/web offers. Chernofsky practices
in New York and Pennsylvania and has argued cases before the Supreme
Court of the United States. He does not practice law in New Jersey
— but for clients whose chief opponent is the federal government,
that doesn’t matter.
"The Federal Trade Commission has become much more active in going
after the advertising agency as well as the manufacturer of the product
on the grounds that, as a reasonable businessman, the ad agency has
a duty to check out the claims made in advertising," says Chernofsky,
who often has clients that sell dietary supplements.
Recently he defended a seller of health products, Bogdana, and a Los
Angeles-based ad agency, Western Direct Media. "You are supposed
to ask the manufacturer for substantiation before you make the claim,"
he says. "I tell my clients which statements in the advertisement
require substantiation. I would have said to get supporting letters
before the advertisement appeared."
The ad agency did not have to make restitution or pay any fines because
he was able to prove sufficient substantiation for the claims made
for a cholesterol-lowering dietary supplement, Cholestaway. After
two years and a five-figure legal fee, the case was resolved by consent
decree with the Federal Trade Commission.
Bait and switch — switching customers into other products because
of higher profit margins — is another tactic that might provoke
legal action. "To protect from a bait and switch suit, the store
must have product for sale in reasonably anticipated quantities and,
if not, have a rain check, or give them something else," he says.
"If you had a reasonable quantity and sold out of it, it is OK
to upsell to a different product, but you need the product invoices
to prove it."
A typical bait and switch scheme would be the storm window store that
advertised a cheap model but upsold to a higher product. "There
is nothing wrong with upselling, and if they had had the inventory
they would have been OK, but the only ones ever produced were the
ones on display. They settled with the FTC."
A merchant can, nevertheless, limit the quantity in
an advertisement, such as "only five per store" or "floor
It’s not just the FTC that hassles merchants. Though it is hard to
believe, the EPA has power over certain products, he says. "Electronic
mosquito repellents that send out a sound wave were good only for
certain kinds of mosquitoes. The EPA sued my client on the basis of
noise pollution that was disturbing birds and dogs. My client just
packed it in. The whole case was a joke to me."
Another federal agency, the Food and Drug Administration, operates
under the amazing powers of admiralty law. "If they have a problem
with a product, they `arrest’ it. Then you file a claim for the product
and get to the heart of the lawsuit."
But people in the direct response industry should be most concerned
with postal regulations, Chernofsky says. "I had a client who
advertised on the back of the Sunday funny papers, and he ran into
problems because an assistant attorney general in New Mexico saw an
advertisement while his kid was reading the funnies at the breakfast
table." To protect yourself in a direct mail or sweepstakes enterprise:
so complicated they can’t be enumerated.
documents from the printer.
He is now involved in litigation for a sweepstakes company that supposedly
had a less than adequate description of a discount booklet.
"The credulous consumer is to be protected." And, more recent,
"The reasonable consumer standard," what a reasonable consumer
who read the entire advertisement would conclude.
"What the court would like surveys," he says. He is commissioning
a survey now to go to people who purchased a product to see what they
expected when they read the advertisement. How high the hypothetical
consumer’s IQ should be is up to the judge.
— Barbara Fox
If you are the wronged consumer and can’t get satisfaction
from a firm’s customer service department write to the Direct Marketing
Association, Mail Order Action Line, 1111 19th Street NW, Suite
1100, Washington DC 20036-3603.
The DMA also offers a service to reduce the amount of national advertising
mail you receive. Send name, address, and zip code to Mail Preference
Service, DMA, Box 9008, Farmingdale NY 11735-9008. Similarly to receive
fewer telephone sales calls, send name, address, and phone number
with area code to Telephone Preference Service at the same address
except use Box 9014.
It usually takes four to six months for the decrease to show.
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