TV inc

THE RULES

“What do you want me to do, learn how to stutter?”  Sam Spade to Joel Cairo in Dashiel Hammett’s, The Maltese Falcon.

The Federal Trade Commission has taken a closer look at infomercials in the past few years.  Having been a target of one of their investigations, I can draw on some experience as the rules have changed over the years.

In the early 80’s before the deregulation of the amount of time required for programming as compared to commercials during my any one hour time slot (14 minutes of 60 could be used for advertising), infomercials ran disguised as talk shows.  Leads were gathered rather than sales.

In 1984 things changed.  The entire hour could be used for commercials.

The FTC began looking at infomercials in the late 80’s for two reasons: 1) were the claims legitimate, 2) was the format of the commercial, disguised as an entertainment program, in itself deceptive?

The first question, claims, has always been a focus of the FTC.

The second question had come up before, but rarely.

Although there are no set guidelines at this time, the FTC looks askance at any commercial which is 14 minutes or longer that does not have a clear disclaimer at the beginning and end of the commercial alerting the audience to the fact that the “program” they are watching is an infomercial.

The FTC will buy some of your product.  They’ll send some back for a refund.

Let’s face it; you’re a very high profile business.  You’re a very small retail store with a very big front window.

This is the visual they want to see:

For a single product:

“The following program is a paid commercial announcement for Bob’s Widgets.”

For a line of products:

“The following program is a paid commercial announcement for Bob Manufacturing, Inc.”

The same announcement with the tense changed must appear at the end of the program.

In addition, before the “call-to-action” (CTA) appears on the screen, the announcement should be run again.

However, even these disclaimers are insufficient in some cases.  One infomercial producer had to redo his entire program because it looked too much like a real talk show, disclaimers notwithstanding,

Some infomercials run periodic disclaimers as a “crawl” during the program.  As a show host and writer of an infomercial on a Mace type of product, I added crawls to the video during the program advising the viewers that they were watching an infomercial.  Still, one attorney at the FTC complained.  He said my production was too good.  It looked too much like a regular program.  Sam Spade’s line to Joel Cairo in The Maltese Falcon applies (at the beginning of this chapter), “What do you want to do to, learn how to stutter?”  Neither Joel Cairo nor the FTC attorney found the line amusing.

These are the rules the FTC expects everyone to live by:

The advertisement must make a statement;
The statement must be true;
The statement must cause someone to react.  

Your ads must comply with these rules in order to stay out of their limelight.

 

In academic discussions with the FTC attorneys, I’ve asked why they do not go after tele-evangelism.  After all, television ministries are clearly infomercials.  Answer: separation of church and state.  Well, if some of these preachers represent the Almighty and the Almighty approves of and talks to us through them, I suspect the Almighty of gross negligence (Franz Kafka loosely).  If they don’t represent Him, and clearly they don’t, then they too should stand up to the same regulations that the rest do.  Go get Madelyn Murray O’Hair and a soapbox.

 

There’s “Firing Line” with Bill Buckley; a program sponsored by only one product which, coincidentally, is owned by Bill Buckley:  “National Review”.  First amendment protection here.

 

The list goes on.  Big Jake’s cable program features products sold directly or indirectly by Jake.  Clearly a program disguised as an infomercial.  Originally it was a regular program.  Then they saw the light and started to sell products.  First a regular program, now an infomercial.  The FTC says they’re too busy to go after every trespasser.

 

In another discussion I asked what the FTC thinks about a news program that alters or eliminates segments because the target is a sponsor (ABC’s 20/20 and the Geraldo Rivera dispute, 1987).  In this case the sale of a product could have been effected and thus the network.  The segment, which was damaging to the sponsor, was dropped.  Once again, First amendment application.

 

Then there’s the National Infomercial Marketing Association, the industry group that was set up to speak on behalf of infomercials.  It has set up guidelines as well.  Frankly, NIMA’s guidelines are stricter than the FTC’s.  Furthermore, there is a direct threat that NIMA will report to the FTC if a program does not meet its criteria.  Big Brother has a nephew and I’m sure they have all the answers.

 

Please understand that I am only pointing out the serious confusion that exists.  No one tells you where you’re going wrong until you’ve acted.  Then it’s too late.  Your lawyer will warn you of every problem that may befall your effort.  Listening to him, you’d stay home in bed with the covers pulled up tightly.

 

We recently completed a program on travel.  In the program we asked the viewers to call for free information about our sponsor’s program.  Free information is sent followed by either a mail or telephone solicitation.  It is our goal to sell something.  Guess what, according to the FTC (academically speaking; of course), this is not an infomercial because it falls under the jurisdiction of the FAA (Federal Aviation Administration).  The FAA has sole control over any advertising involving travel.  This extends to the 50 states and territories.  That is, if a state consumer affairs bureau is upset with your travel advertisement or program, it must complain to the FAA.  It cannot touch the programmer or sponsor.  Whatever action or non-action is taken remains under the FAA’s bailiwick.  The FTC’s only concern about a travel infomercial “may be” its format and that has never been tested.  The FTC only becomes involved when commerce is involved, provided that commerce is not protected by The Bill of Rights or specifically relegated to a different agency and/or state & local statutes.

 

The US Post Office has rules as well.  Then there are 50 states, each with an attorney general watching out for chicanery.  Consumer advocates such as Ms. Rader Hayes at Rutgers University in New Jersey keeps track of infomercials.

 

Selling a book?  Soliciting donations?  Non-profit?  Religious?  Travel?  Each one of these and more come under different and sometimes overlapping regulatory agencies federally and perhaps locally.  Your lawyer, agency or consultant will be helpful there.

 

As a panelist on an episode of The McLaughlin Report, Congressman Sissisky told me, “You guys (infomercial producers) had better know what you’re talking about and had better tell the truth (in order to stay of federal retribution)!”  I agreed and asked for some quid pro quo.  “That’s fine with me, Congressman.  We’ll do all that.  How about you guys in Washington, DC?  Can we get the same from you?”  I think I annoyed him.  The audience liked it.

 

             “If you’re part of the profit, you’re part of the responsibility.”

                                                    …….  William Thompson

 

Who is responsible for errors?  You are.  Whoever is reading this report, you’d better figure that you have some exposure for liability if false, misleading or unsubstantiated claims are made.  This applies to the writer, producer, director, commissioned talent, product supplier, media buyer, station, network, even the fulfillment center and credit card processor.  And don’t think for a second that your corporate veil will protect you.  The FTC will blow right through it if they can prove deception.  Right now one of the biggest culprits is false or misleading testimonials or endorsements.  Be sure your testimonials are accurate.  Be sure your endorsers are aware of what they’re saying and that they can say it.  Document!!

 

Recently, a client asked that I write a script for his new product.  He gave me a 4-ounce bottle with liquid inside.  He said it cures cancer and it cures AIDS and it sells for $9.95 retail.  I told him he doesn’t need a writer, he needs a lawyer.  The claim would be sufficient:  “CURES CANCER!! - - CURES AIDS!! - - SEND $9.95 + S&H” c/o him at the county jail.  Even though he had substantial information from an oncological hospital in Europe, he was clearly making a medical claim, which, at best, was unsubstantiated and at worst was outright false.  Just because credible people relate personal experiences does not protect you from an expensive investigation.

 

My advice:  Let common sense prevail.

 

Insurance?  You may have E&O (Errors and Omissions) insurance, bonding and other buffers.  However, if the insurance or bonding company can show you who acted negligently or fraudulently, your own insurance company may sue you.

 

Since these rules are still evolving, it is best that you check with regulatory agencies and industry groups before you proceed.