Fair & Non-deceptive Advertising

Most product deception occurs with the presentation of the product to the consumer. Outbound marketing of any kind magnifies the advertiser's opportunity to structure what the consumer sees and understands about the product being advertised. For this reason, the guidance provided by the FDIC and the FRB gives great weight to advertising practices.

In two pages of recommended practices, almost half relate to advertising practices. These practices, enumerated below, outline fair advertising practices. While many of the principles in this guidance are already included in regulations such as Truth in Lending and Truth in Savings, the guidelines go beyond those requirements.

The guidelines actually provide some insight into how and when small type should or should not be used and whether important terms or conditions should be mentioned in the ad whether or not they are a triggered term under a regulation. All marketing within your institution should be measured against the principles set out in this guidance.

Review all promotional materials, including scripts, for fairness and accuracy. Be sure that they are fair and accurate in the context of the reader, not the marketer who wrote the ad.
Review space ads for completeness of information. Look particularly for important information that may be placed in small type or an inconspicuous location.
Be sure there is a factual basis for any representation made. Also be sure there is a product available - as advertised.
Make sure that ads draw the attention of consumers to key terms, including limitations and conditions. Key terms are terms that should influence the consumer's decision in the consumer's best interest.
Review ads to be sure that all material terms and any limits or conditions on availability are clearly disclosed and explained. This is a "no tricks" test. The ad should include information about requirements to obtain the terms advertised, such as minimum balance to open an account.
Review ads for terms such as "pre-approved" or "guaranteed." Be sure that these terms are used with accuracy and fairness. Don't promise pre-approval unless it really is pre-approved. If the conditions of final approval are placed somewhere in fine type, the ad should probably be redesigned.
Evaluate ads from the perspective of those who will read it. The purpose of advertising - honest advertising - is to reach and communicate to the target audience. Do so effectively and honestly.
If advertisements cross-sell products such as insurance, be sure the ad communicates whether the choice is optional. If the product isn't required for approval, don't imply that it is.
Present costs and benefits fairly and completely. Don't leave something important out and mislead the consumer about costs and terms. And never imply that a cost or fee is less than it is - or that it wouldn't be imposed.
Never imply in the ad that the cost is less than the real or true cost. Doing so is about as deceptive as it gets.
Don't advertise something that isn't available to most consumers. This is a classic bait and switch tactic. If you advertise a product with limited availability, make sure the ad makes the limitations clear. And then, to overcome any concerns about discrimination, give equal or greater advertising exposure to a product with more universal availability.