NAD SWIFT to Allow Implied Claim Challenges

In 2020, NAD launched the streamlined Fast-Track SWIFT process, stating that it was designed to generate decisions within 20 business days for non-complex misleading express claims, misleading pricing and sales claims, and claims involving “the prominence or sufficiency of disclosures including disclosure issues in influencer marketing, native advertising, and incentivized reviews.” Because of the stated limitation on “misleading express claims,” up until recently, NAD would decline review of misleading implied claims.  

Recognizing this jurisdictional limitation, NAD has now announced that the limitation of misleading express claims has been lifted to include misleading implied claims that meet the same non-complex qualification, potentially expanding the universe of SWIFT challenges. The impact may be substantial, as an advertiser is required to have substantiation for all reasonably ascertained claims (express or implied) prior to dissemination. Requiring substantiation for an unintended implied claim under the SWIFT time frames could make supporting such claims difficult on advertisers.

What is an implied claim that might be subject to SWIFT jurisdiction?

Express claims are the individual words and phrases in an advertisement that a marketer states about the product or service being promoted. For example, “ABC Mouthwash prevents colds” is an express claim that the product will prevent colds. In this context, an advertiser is required to have competent and reliable scientific evidence supporting this claim.

Advertising frequently contains other elements, text, product names, and imagery, that when taken as a whole might create the impression of additional claims, indirectly or by reference. For example, “ABC Mouthwash kills the germs that cause colds” contains an implied claim that the product will prevent colds. If such a claim were implied, the advertiser would similarly be required to substantiate the claim, just as if the claim were express, as identified in the prior example above.

Because the interpretation of what constitutes an implied claim can be the subject of controversy, an advertiser may deny that an advertisement contains a particular implied claim. As such, challengers frequently rely on secondary evidence, such as surveys, to demonstrate that consumers take away a particular claim from an advertisement. In addition to survey evidence, NAD, similar to the Federal Trade Commission (“FTC”), takes the position that it can stand in the shoes of the reasonable consumer and evaluate the existence of an implied claim, which the advertiser would then be required to substantiate. Either way, expanding the SWIFT process to cover implied claims will likely result in advertisers being forced to substantiate claims that they may not have intended in an incredibly fast process.  

Takeaway:  How significant is NAD’s expansion of SWIFT jurisdiction to permit challenges on implied claims?  In a recent meeting, NAD’s director Laura Brett indicated that NAD would permit challenges for non-express claims that were “necessarily implied,” which is a narrow category of unambiguous interpretation. Given the amorphous nature of implied claims, however, the SWIFT implied claim expansion will likely be the subject of future SWIFT proceedings and jurisdictional challenges.

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