The Fine Line Between Puffery and False Advertising [e158]

March 2, 2015

The guys kick off the week by getting into what constitutes false advertising and what is mere puffery.

Full Podcast Transcript

NASIR: All right. Welcome to our business podcast where we cover business news and add our legal twist and my name is Nasir Pasha. Welcome to the program!

MATT: And I’m Matt Staub.

NASIR: Very good. That was a perfect intro. But, once again, I messed up by mentioning it.

MATT: Even though I don’t think you’ll ever have a perfect intro, I’m still going to say this is the best podcast ever.

NASIR: I would say so. I would have no disagreement with that.

MATT: What if I said it was the fastest-growing podcast ever?

NASIR: It’s a fast-growing podcast – a very fast.

MATT: Well, it depends. I mean, if I took a look, 07:32:12 a.m. through 07:32:13 a.m. and looked at the growth, if we got, like, three people, I might consider it the fastest-growing podcast.

NASIR: Possibly – probably not, but yeah.

MATT: So, if you can’t tell, our topic for today is going to be what I call “puffery” which probably, you advertising people out there, you’re going to love this one because this is going to tell you, well, we’re not going to tell you if you’re doing it right or wrong. Well, we’re not going to tell you if you’re doing it right or wrong, but there’s certain things you can say and certain things you can’t, and there’s a recent story here with Slack and that’s why I got the fastest-growing podcast because they declared they’re the fastest-growing business app ever – which seems like a stretch.

NASIR: Yeah, which I find hard to believe since I’m not even sure what exactly they do, but it looks like team communication. Maybe it’s not something that I would ever use so maybe that’s why I haven’t heard of it.

MATT: Well, yeah, and I would question it even if it was, like, the most popular – even if, like, Google said that or something. I don’t know. It just seems like that’s a very hard thing to quantify. Let’s see. It has more than 500,000 people using it every day, but it’s a user count group by 35 percent in just the first six weeks of the year, 1.7 billion messages – I guess that really doesn’t matter. But, obviously, if you want to declare something, the fastest “blah blah blah” ever, I mean, there’s different ways to measure. “I’m the best shooting point guard of all time,” if you look at this one game and I shot 12 for 12 from the field.

NASIR: Versus a career. Versus, you know, only regulation play versus, you know, playoff plays. Yeah, you’re right. I mean, I think Slack, they base it upon users – that’s my assumption, at least. But I think, in this case, even when making that statement, even though there’s multiple ways to measure it, you do have to back it up, and I think, if you’re able to make a statement like that and back it up, I think it’s a powerful marketing message, you know, to declare yourself the fastest, the best, et cetera, it’s pretty cool. But “best” is something different though. You know, I think a lot of coffee shops have, like, “the best coffee in town” or “the best coffee in the United States.” Do you remember that movie, Elf with Will Ferrell?

MATT: Yeah, I’ve seen that.

NASIR: He sees this sign on the outside that says something like “World’s Best Coffee” and he goes inside and congratulates everyone. He’s very excited. It reminds me of that. But that’s still opinionated. That’s still kind of an exaggeration and puffery within the guidelines of true advertising.

MATT: Everyone sees that all the time if you go to any stores. But we have to mention, of course, the number one boss coffee mug of Michael Scott.

NASIR: Oh, yeah.

MATT: It wouldn’t be this podcast if we didn’t mention that, but it’s where you draw the line. So, the restaurants are always tricky because it’ll say, like, “Voted Best Restaurant” but there’s so many different publications and things that have the voting. It can literally mean anything. There’s a difference between that and something that’s very quantifiable and you know exactly, you know, I’m more of a numbers person so, if someone is the top-grossing business in the greater Seattle area, that’s something you can actually prove even though that’s probably difficult to compare because you don’t know.

NASIR: Yeah.

MATT: You get my drift.

NASIR: Even sometimes a lot of the bigwigs use surveys to quantify or qualify their services – like, best customer service in the industry and so forth – and they’ll have a little asterisk with what their sources are. They may have even paid for the study and you know how surveys are.

MATT: Yeah.

NASIR: It depends on how you ask the question and so forth. So, even if they did that. But the point is that they can at least reference something and it’s kind of up to the consumers to kind of take that information in and see how much validity it has whereas, you know, if they refer to a particular – I’m trying to think of, you know, like a Gallup poll or something – something a little bit more reliable and has a little bit better reputation that they can say, you know, “In a Gallup poll, we were voted best in this area,” or whatever, you know, or some kind of award that is given.

MATT: Yeah, and you already mentioned they have to be able to back up their claims. So, if you’re looking at the advertising rules under the FTC, that’s one of the things – they have to have evidence to back it up. You know, this should be common sense as well. The ads must be truthful and non-deceptive, truthful and non-deceptive so it can’t be truthful and deceptive. I feel like that’s almost the same thing.

NASIR: No, it’s not because, like, you can not say the truth and, in order ways, it’s kind of saying not giving enough information to almost allude that something that is true that’s not true.

MATT: Yeah, we see enough legal terms that I know that there’s fine lines between these things. But, to me, that seems the same.

NASIR: Yeah.

MATT: Ads can’t be unfair meaning that advertisement can’t cause substantial injury to consumers that consumers can’t reasonably avoid. So, for me, I think the way to get around this is just to write “Best Coffee Ever” and then just write a question mark after it and then it’s more of a question that they’re asking. “Voted Best Coffee in Seattle for 10 Straight Years?” So, then it’s not even a statement. It’s just a question.

NASIR: I love that. And then, there’s also statements that are not even meant to be true. Like, for example, I referenced this as one of our articles on our blog but I’ll mention it again. Old Spice basically put out a tweet talking about Taco Bell. You know, they have their hot sauce and their fire sauce, and they say in their tweet, they’re like, “Why is it that fire sauce isn’t made with real fire? It seems like false advertising, you know?” and then, very humorously, Taco Bell responds saying, “Old Spice, is your deodorant made with really old spices?” Well, I guess it’s not that funny but it’s kind of cool to see kind of these companies on that level, joking around with each other like that.

MATT: Yeah, like the apricot-flavored fruit or apricot-flavored fruit sticks made with real ape – two Office references in one episode.

NASIR: What about Red Bull gives you wings? You know, we’ve mentioned that a long time ago, but there’s something going on with that, you know?

MATT: Yeah, that’s what I was just about to get to conveniently, and it wasn’t even intentional, but this episode is coming out on the last day to claim your money if you had a Red Bull in the past twelve years – which I’m going to say is pretty much any adult, more or less.

NASIR: I would say probably 99 percent of man on Earth.

MATT: Yeah, they’ve at least had one Red Bull in over twelve years, that’s pretty much everyone had at least tried it, at least towards the beginning – maybe not now that they know it’s not good for you. I have one from time to time so I can’t really criticize people. So, March 2nd, last day to claim your cash in this class action lawsuit that Red Bull gives you wings. Apparently, it wasn’t true. Some people were expecting that, of course, because everyone’s going to expect that something like that would be something that would actually happen. So, you know what, Red Bull has to pay out for that.

NASIR: And, to be fair, this was a settlement. It was a class action settlement so it’s not like a judge or a court actually ruled this. But, gosh, I mean, it’s the same thing as the fire sauce, right? I mean, it’s so ridiculous and, again, we don’t know because the court never said otherwise. But I think we would all assume that they would lose on the case, but then it shows you, you know, sometimes how the law, the legal system can be unjust. Let’s assume that, for a second, Red Bull would have won this lawsuit, they still have to defend this class action lawsuit and they made the economic decision, “You know, it’s not worth it. Let’s just pay it out.” I like the slogan. I think it’s a really cool slogan. I wish they would still use it.

MATT: Oh, so they get rid of the slogan all together? I guess that makes sense.

NASIR: I would assume so because then, in theory, they would leave themselves open to further litigation because you couldn’t settle the future aspect of the use of the slogan.

MATT: That’s why we had to change the firm name from Top Floor Legal to Pasha Law because they found out you weren’t on the top floor and you weren’t even an attorney either so the legal part didn’t hold true.

NASIR: Oh, I know. I’m looking here, yeah, “Red Bull settled the lawsuit to avoid cost and distraction of litigation. However, Red Bull maintains that its marketing and labelling have always been truthful and accurate and denies any and all wrongdoing or liability.” It’s a sad day in Red bull history.

MATT: Yeah, they have that competition every year where people can make their car things to make them fly and it’s based on, you know, how far you can fly across the thing. Just cut to the whole premise of this. Did it say what the pay-out was going to be? Or the settlement?

NASIR: Yeah, $13 million.

MATT: You know, they probably got enough publicity that it made up for.

NASIR: $13 million.

MATT: That’s a lot of Red Bulls.

NASIR: It sounds like a lot. Basically, you get either a $10.00 reimbursement or $15.00 worth of Red Bull products which is not bad, actually.

MATT: Wait, $15.00 of Red Bull products?

NASIR: Yeah, that’s a lot of Red Bull, no?

MATT: I’ll probably end up doing this because I’ve had my fair share of Red Bull. So, when I’m part of the class action lawsuit in ten years for all the people that are having adverse health effects from consuming too many Red Bulls then…

NASIR: I love how your first reaction when you heard about this before our podcast episode was like, “You know, I can’t believe that, that’s so ridiculous,” and now you’re cashing in.

MATT: Well, usually, it’s like you get $1.76.

NASIR: Yeah, it’s not worth your time, right?

MATT: $15.00 in Red Bull, that’s a deal, just for signing up for something.

NASIR: I’m signing up right now. I’m almost done.

MATT: How do they verify that you’ve bought a Red Bull? I guess they don’t.

NASIR: Yeah, usually, for these class action things, they usually don’t go, you just kind of self-representative that you’ve done this because they don’t expect people to actually have a receipt, but some of the bigger ticket items, obviously, let’s see. So, choose your settlement. Should I go for the cash reimbursement of $10.00 or free Red Bull products with retail value of approximately $15.00? And then the Red Bull products selected on the claim form will be shipped by Red Bull directly to class members at Red Bull’s cost. So, I can either choose from Red Bull energy drink or Red Bull sugar-free.

MATT: Always sugar-free, even though that’s probably worse for you as well.

NASIR: You would do the $15.00 worth of Red Bull products instead of the cash reimbursement?

MATT: Oh, I’m doing the $15.00 of Red Bull products right now.

NASIR: Oh, okay. Then I will too.

MATT: This is great podcast stuff here. Well, we told people about what the rules are – at least under the FTC for advertising.

NASIR: Well, yeah. I think, as far as the line of puffery we talked about, I mean, there’s a lot more information about truth in advertising.

MATT: Yeah. I think the point is this, I think we told the rules which seem, you know, obviously, with the law, nothing’s really as straightforward as it seems. But, basically, if you’re successful, people are going to come after you and try to get some money out of it. You know, they’ll find a way. If you have some sort of slogan like Red Bull or anything. But, of course, if you’re untruthful in your advertising then that’s going to be a problem as well – whether or not you’re successful.

NASIR: Yeah. Check out our blog article on this subject. There’s a link there to the FTC’s standard of deception because, you know, as Matt kind of outlined, you know, what’s the difference between lying and deception or not telling the truth and deception? And, actually, FTC has a pretty long guideline. I mean, it was actually a guideline that I think they wrote a long time ago and it’s held this test of time and it’s not just about what you say but it’s what you do not say as well. So, if you do have an advertising campaign that may be on the fence, that may be your first spot to look at.

MATT: Always good. Good post, as always.

NASIR: Well, thank you. Should we end the podcast episode or just, you know, just talk for the rest of the day?

MATT: I think we’ll end it. People need to have time to go fill out their Red Bull claims.

NASIR: I guess we should link that, too. Today’s the last day.

MATT: Yeah, I’ve already done it five times, so I’m just raking in this money.

NASIR: I know. Let’s put my wife’s name here. I’m sure she bought Red Bull a lot of these times. So, all right. Well, thanks for joining us, everyone.

MATT: Yeah, keep it sound and keep it smart.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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