In April 2004, the Electronic Retailing Association (ERA) and the National Advertising Review Council (NARC) announced that they had launched a program to counter the dissemination of unsubstantiated and false advertising claims. The new Electronic Retailing Self-Regulation Program (ERSP) will be funded by the ERA but administered by the NARC. The FTC expressed support for the program, which was set up to work like this:
- Anyone with a complaint about a false or unsubstantiated infomercial or direct-response ad could fill out the complaint form at the Savvy Shopper Web site.
- The complaint would go to the attorney at the NARC for review.
- The marketer would be notified and given 15 days to provide substantiation.
- Once the marketer provided the materials, the independent attorney had no longer than 45 days to review the materials and render a decision. Thus the process should be completed within 60 days.
- If the claims and campaign were found to be misleading, the marketer would be asked to stop them.
- If the false ads were not stopped, the matter would be referred to the FTC and reports, press releases and letters would be issued to notify the media and cable stations of the review’s findings.
- However, if the ad was found to be substantiated, no action would be taken.
The ERAwas the trade association for major companies who used electronic media to advertise goods and services to the public. Its membership was involved in multi-channel electronic marketing that included infomercials and short-form commercials, live shopping channels, the Internet, radio, and convergence. (Convergence marketing involves integration of online and offline media.) The Savvy Shopper site and complaint form were online for several years without with little or no public attention. However, increased publicity and the NARC involvement were expected to have an impact.
The NARC was formed in 1971 by the Association of National Advertisers, Inc., the American Association of Advertising Agencies, Inc., the American Advertising Federation, Inc., and the Council of Better Business Bureaus (CBBB), Inc. Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation. The NARC establishes the policies and procedures for the CBBB’s National Advertising Division (NAD), which has been the investigative arm of NARC’s self-regulation program since its inception. The ERSP was originally run by attorney Peter Marinello of NARC and conducted its investigations independently from NAD.
The ERSP program evaluated s the truth and accuracy of “core” claims of the direct response advertisements. It was not set up to deal with financial concerns such as refunds and unauthorized charges.
Between April 2004 and January 2007, the ERSP monitored more than 4,200 advertisements for more than 1,900 products offered through direct response campaigns. By 2007, it had published 125 decisions. In 119 of the cases, the challenged ads were either modified or discontinued. The ERSP complained to the FTC about infomercials for 13 health-related products: 7 Day Miracle Cleanse, AbGONE, Centro Natural de Salud, Hepatol Complex, HoodiaLife, Nexiderm-SP Anti-Wrinkle Formula, Phenterprin HCL, Renuva Anti-Aging System, Rev XP, Sea Vegg Nutritional Supplement, Super Prostate Formula, Ultimate HGH, and Zantrex-3.
In January 2017, the ESRP reported that it had tracked 15,800 informercials., but what happened as a result was not clearly indicated.
The ERSP performed a valuable service, but in in June 2018, the Electronic Retailing Association announced that its dues receipts could no longer meet its expenses and the organization shut down.