Overview:
Rankings of debt consolidation companies come under review by the NAD. How might regulators and consumers use consumer surveys if a dispute arose?
Reviews Are Really Ads
The National Advertising Division (NAD) of the BBB National Programs conducted a routine inquiry into debt consolidation companies that appeared on TrustedCompanyReviews.com, operated by EIA Marketing. TrustedCompanyReviews.com is a platform for reviews of products and services, claiming to use a proprietary evaluation system that combines expert analysis with consumer experience. It integrates reviews from TrustPilot, a strictly consumer-driven website, with expert analysis.
The NAD reviewed EIA’s disclosure practices for affiliate marketing partners offering debt consolidation services. Debt consolidation is a segment of the financial services industry that offers individuals a way to merge debts into a single loan or payment plan with a lower interest rate. The market for this service is estimated to be $20 billion in 2024, and is expected to grow to $32 billion in 2033. As more consumers seek the “best” debt consolidation online, issues related to truth in advertising may arise.
NAD Inquiry
The NAD reviewed whether the format of the advertising reasonably communicated that the rankings on TrustedCompanyReviews.com were advertisements for affiliate partners. Its chief concern was that a disclosure was at the top of the website and was then hidden in hover-over text and pop-up ads. The disclosure read, “The listings featured on this site are from companies from which this site receives compensation. This influences where, how, and in what order such listings appear on this site.”
The NAD recommended that TrustedCompanyReviews.com:
- Identify the companies from which it receives commissions.
- Update and revise the online disclosure so that it is viewable at the top and bottom of every page and makes clear that TrustedCompanyReviews receives commissions from affiliate partners in its reviews. The NAD also recommended that the site disclose that the reviews, rankings, and product information of its affiliates constitute advertising.
- Avoid the pop-up advertising and floating text, or otherwise ensure that it does not obscure the disclosure revised by NAD’s recommendation to make clear what product information is advertising; and
- Make clear that while it makes commissions from links to its affiliates, it is not paid to publish content and does not permit its affiliates – or any third party – to control or otherwise approve any of its content.
EIA Marketing stated that it disagreed with the NAD’s characterizations, but would comply with recommendations.
Online Reviews Under Scrutiny
Consumers increasingly make purchase decisions based on online reviews. Online platforms, such as TrustPilot, Google, Yelp, and others, are frequently accessed by users on smartphones and other devices, creating an even greater need for clear and conspicuous disclosures to adhere to new consumer protection regulations. The NAD has online review platforms and practices on its radar. This decision shows that the format of the disclosure is as important in affiliate marketing as its existence.
Consumer Surveys Assist Regulators in Enforcing New Consumer Protections
Even without a direct statement, the format of content can suggest objectivity. Without disclosing an affiliate relationship, brands may come under scrutiny from advertising regulators and consumers. False and deceptive advertising disputes may arise from disclosures that fail to notify consumers of the advertiser’s relationship with another company, and consumers rely on these reviews to make purchasing decisions.
Parties can measure how a reasonable person would interpret a disclosure, and whether that disclosure is misleading, using consumer perception surveys. These surveys help regulators and litigators provide evidence of how consumers understand and rely on disclosure communications. Another type of survey commonly used in false or deceptive advertising cases is a materiality survey, which measures the extent to which a communication influences purchasing decisions.
The Real Truth in Online Review Advertising
The recent NAD decision in the TrustedCompanyReviews case reminds online review platforms that disclosures are under scrutiny, and that brands must communicate transparently to avoid costly disputes. If you are involved in a false advertising matter, contact MMR Strategy Group, an IMS Legal Strategies company.