Today's Trends in Credit Regulation

Deceptive Advertising - What's in a Name?[1]
By Elizabeth C. Yen

We know advertising claims must be accurate, supported by appropriate documentation, and cannot be misleading or deceptive. Disclaimers and qualifiers should be added whenever appropriate to avoid having advertising statements misunderstood by unsophisticated consumers. But what about the name of an advertised product or service? Could the name itself be misleading or deceptive without an appropriate disclaimer?

A product's name should not deceptively misrepresent the product's capabilities and effects. The Federal Trade Commission has taken action in the past against companies marketing products with names the Commission considered deceptive, including weight loss products such as "Tummy Flattening Gel,"[2] "Sleeper's Diet" and "Super Fat Burners."[3] Apparently sometimes the name of a product or service could be so deceptive that no amount of additional qualification or disclaimer could effectively counterbalance the implications inherent in the name.[4]

The Federal Trade Commission has indicated that advertisers must consider both express and implied marketing claims and ensure that both types of claims are truthful and substantiated. Implied claims may arise when an advertisement is read in its entirety, taking into account text, product name, and illustrations. If implied claims that could reasonably be inferred by an average consumer are likely to be misleading, appropriate qualifiers should be added.[5]

Advertising in a foreign language may raise special implied and express claim issues. For example, the word "notario" in Spanish (and "notar" in German and "notaire" in French) refers to a person authorized to provide certain legal services, including the drafting of certain legal documents. Since certain "notary" services permitted in other countries are considered the practice of law in the United States, several states require certain types of advertisements for U.S. notary public services to include clear and conspicuous disclaimers that the notary public is not a lawyer and is not authorized to provide legal advice (unless the advertisement is for a notary public who is also a lawyer in good standing admitted to practice in the applicable jurisdiction).[6]

In an interesting twist on the concept of a misleading or deceptive product name, the Connecticut Statewide Grievance Committee recently issued an advisory opinion to a lawyer contemplating advertising legal services to consumers who receive suspected illegal unsolicited telemarketing or debt collection calls to their cell phones or other mobile devices.[7] The advertisement was for a mobile "app" called "BlockCallsGetCash" that would apparently be available for download at no charge from or through the lawyer as the result of a technology license in favor of the lawyer's law firm from a third party (presumably the developer or owner of the "app"). The lawyer was contemplating advertising legal services that would include a review of the log of unsolicited incoming calls created by this "app" to see whether a federal telemarketing claim could be brought concerning one or more of the logged calls. The advertisement would have described the "app" as "The Call Blocker that gets you money," and also would have described the legal services available in connection with a review of the call log generated by the "app," and the possibility of recovering "up to $1500 per call." The Connecticut Statewide Grievance Committee indicated that the name of the "app" was potentially "misleading because it creates unjustified expectations that the consumer installing it will receive compensation for blocked calls." In particular, "get cash" was not conditionally worded and was instead "an assertion of entitlement to compensation for the blocked calls." The fact that this was just the name of an "app" was not relevant - in the context of the lawyer's advertisement the "app" was part of the package of advertised legal services, and the lawyer could not include a misleading or deceptive name or phrase in an advertisement for legal services under Connecticut Rules of Professional Conduct, without also including an appropriate conspicuous disclaimer to counter the potentially misleading name of the "app". For similar reasons, the phrase "The Call Blocker that gets you money," proposed to be used to describe the "app", also could not appear in the lawyer's advertisement without an appropriate disclaimer. Under Connecticut Rules of Professional Conduct, a disclaimer along the lines that "results obtained are dependent on 'the specific factual and legal circumstances of each client's case'"[8] could be included "in the proposed advertisement or in the content of the App" itself.

Similar concerns about consumer confusion or misunderstanding would apply to an advertisement for this type of "app" (or for an unrelated product or service) even if not coupled with an advertisement for legal services - there is no apparent reason to think that consumers reading advertisements for legal services would be more likely to be confused about or to misunderstand the true nature and efficacy of the advertised "app". However, in the consumer credit world, some consideration should be given to the profile of a "typical" consumer likely to pay attention and respond to a credit advertisement. If an advertisement targets or is directed at a certain specific segment of the population, that segment should provide the baseline for reviewing the advertisement for both express and implied claims that might require appropriate disclaimers or qualifications. For example, the expected audience for a mortgage loan refinancing advertisement could reasonably be anticipated to differ from the expected audience for a used car buy-here-pay-here advertisement.

In an interesting recent New Mexico Supreme Court case, the court decided that a certain small dollar, high rate consumer loan program was both procedurally and substantively unconscionable, due in part to the manner in which the loans were marketed and originated to predominantly unbanked and underbanked "working poor" borrowers.[9] The court noted expert testimony indicating that the loan program's targeted consumers had "certain cognitive biases that lead them to make decisions that are contrary to their interests. They exhibit unrealistic optimism, or fundamental attribution error, meaning that they overestimate their ability to control future circumstances and underestimate their exposure to risk. Thus, these borrowers have unrealistic expectations about their ability to repay these loans. They also exhibit intemporal biases, meaning they tend to focus on short-term gains, while discounting future losses they might suffer. Thus, [the subject] borrowers focus on the promise of quick cash, and fail to make more considered judgments about the long-term costs of the loan."[10] One might therefore expect heightened scrutiny of a loan program's advertised name and any related advertising slogan if the target audience has these types of cognitive biases.

Instant No-Fee Cash, anyone?

Elizabeth C. Yen is a partner in the Connecticut office of Hudson Cook, LLP. Elizabeth can be reached at 203-776-1911 or by email at


[1] "What's in a name? That which we call a rose by any other name would smell as sweet." W. Shakespeare, Romeo and Juliet.

[2] See, e.g., 2006 consent agreement with Basic Research, LLC et al., summarized in a May 11, 2006 press release available at

[3] See, e.g., 1995 consent agreement with Nature's Bounty, Inc. et al., summarized in a July 28, 1995 press release available at

[4] As another example, consider the difference between an "instant" or "automatic" (point of sale) cash rebate on an advertised item, and a rebate available only if the buyer of the item submits rebate-related paperwork post-purchase. It is highly unlikely that disclaimers and qualifiers could adequately override the claims inherent in words such as "instant" or "automatic." Because so many rebates offered to retail buyers require submission of post-sale documentation, Conn. Regs. Section 42-110b-19(e) prohibits retailers from advertising the net price of an item if the net price incorporates a post-sale rebate (as opposed to a rebate provided by the retailer to the consumer at time of purchase).

[5] See FTC March 2013 guidance, ".com Disclosures - How to Make Effective Disclosures in Digital Advertising," Section III.A., copy available at

[6] See, e.g., Conn. Gen. Stat. Section 3-95a(b), Fla. Stat. Section 117.05(10) and (11), 5 Ill. Comp. Stat. Section 312/3-103, Indiana Stat. Section 33-42-2-10, 4 Maine Rev. Stat. Section 960, Mich. Comp. Laws Section 55.291, 19 Nevada Rev. Stat. Section 240.085, and NY Executive Law Section 135-B, among others.

[7] See Connecticut Statewide Grievance Committee Advisory Opinion #14-03932-A (Internet Advertisement Regarding Illegal Phone Calls), copy available at

[8] Id., quoting from the Commentary to Rule 7.1 of the Connecticut Rules of Professional Conduct.

[9] See State ex rel. King v. B&B Investment Group, 329 P.3d 658 (N.M. 2014), copy available at,266.pdf.

[10] Outside the consumer credit world, there is some survey data indicating that consumers reading energy savings advertisements may not generally believe that their personal energy savings experiences will only be "average", so that advertising energy savings of "up to" a certain advertised amount may not be correctly understood. See, e.g., a May 2012 report commissioned by and submitted to the Federal Trade Commission concerning the results of questionnaire responses provided by 360 randomly selected individuals after reading one of three slightly different versions of an energy-saving window advertisement, copy available at suggests a different type of cognitive bias among consumers contemplating an investment in energy-savings products than (for example) consumers considering weight loss products.

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