The industry that brought you 30-minute paeans to the Abdominizer, the Flowbee Vacuum Hair Cut System and BluBlocker sunglasses now wants to sell you something slightly less tangible: a trustworthy reputation.
The Electronic Retailing Association, home to many infomercial marketers, plans to announce a new self-regulatory program today, one that promises to throw out companies that make false claims and send their names to the Federal Trade Commission for investigation.
The move is not a reaction to sales, which are stellar. Instead the association is concerned with the damage that could be done by continued outsized promises from marketers like Advanced Patch Technologies. "Every three days peel off the patch and watch as you take off the pounds," infomercials for its skin patch said last year. "Replace with a new patch and drop more pounds. It's that easy."
Deciding that easy was not as important as effective, the trade commission wrung more than $1 million from Advanced Patch and several co-defendants to settle charges of making unsubstantiated claims.
Legitimate infomercials have thrived in the 20 years since a change in government regulations set them loose on television. But for every beloved "Sweatin' to the Oldies," the videotape workout series frenzily overseen by Richard Simmons, there seems to be a malefactor like the Rio Hair Naturalizer System, which turned out to cause hair loss, discoloration and scalp irritation. It is the persistence of such promises, and the government's persistently unhappy response, that spurred the association to act.
"Our members demanded it," said Barbara Tulipane, president and chief executive at the Electronic Retailing Association in Arlington, Va. "It's very hard to compete with outlandish claims."
Jack Kirby, chairman of the association and the chief executive at the Continuum Commerce Group in Los Angeles, said: "For a decade or two, this has almost been the Wild West of advertising, where people make the rules for themselves as they go. It was time to really set some standards and move forward."
Mr. Kirby's ardor may be partly explained by what he called his practical experience in the area of questionable claims. Infomercials from his company promoting the Fast Abs exercise belt drew the attention of the trade commission, which said that Fast Abs did not produce "six-pack" abdominal muscles without exercise, as was claimed. Nor, suggested the trade commission, was 10 minutes of Fast Abs use equivalent to doing 600 sit-ups. The defendants - Mr. Kirby's company and several others - agreed to pay more than $5 million to settle the case.
"Mistakes were made," Mr. Kirby said, adding that his company had since named a corporate compliance officer as well as outside regulatory advisers. "We said, if we were having issues, and we considered ourselves responsible, other companies must be feeling the same thing."
Other members of the direct-response industry agreed that more structure could only help a healthy business continue to thrive. (Revenue from direct-response television commercials, including infomercials and shorter spots urging viewers to call now, rose to $154.1 billion in 2003 from $85.3 billion in 1997, according to the association.)
"Any time a customer gets burned, what are the chances of them sticking their neck out again and buying from another infomercial?" said Ron Popeil, the infomercial impresario who gained fame marketing products like the Pocket Fisherman, the Dial-O-Matic Food Slicer and the Electric Food Dehydrator.
Mr. Popeil said he favored any system that made legitimacy paramount. "It will weed out those people who continue to make money at the expense of other people," he said, "people who are here today and gone to Maui."
The new guidelines are to be described today at a news conference organized by the Electronic Retailing Association. Timothy J. Muris, chairman of the Federal Trade Commission, which advised the association as it developed the program, is scheduled to attend.
Under the plan, complaints about misleading infomercials, online ads and other direct-response vehicles will be referred to an independent review board at the National Advertising Review Council, a partnership of advertising trade associations and the Council of Better Business Bureaus.
James Guthrie, president and chief executive at the review council, said the process would be more streamlined than its existing programs that examine traditional and children's advertising. "The objective is different: to find the major core claims that are unsupported and have them either corrected or discontinued as soon as possible." Assessments are expected to take 60 days, a far shorter period than other self-regulatory processes.
The Electronic Retailing Association will pay an undisclosed sum to the council to review complaints for the first phase of the program, which is to last 18 months starting May 1. If marketers under review cannot back up their claims and refuse to alter their advertising, the council will refer the case to the trade commission.
Mr. Muris, the commission chairman, said he welcomed the industry's efforts. "The commission has had lots of overview of infomercials and lots of enforcement," Mr. Muris said. "Self-regulation is very important to us because we're not that big an agency."
And regulation of infomercials in particular is overdue, according to another trade commission official. There is no data to suggest that fraudulent advertising is more prevalent in infomercials than in traditional advertising, said the official, Richard Cleland, assistant director at the division of advertising practices. But, he said, "Infomercials, based on our experience, can generate a great deal of consumer injury in a short period of time if the claims are bogus."
Indeed, it is partly the buy-now, rush-delivery character of many infomercial sales pitches that turns some consumers off. Fani Geroff, 29, a lawyer in Washington, recently made an impulse purchase of weights and workout videos advertised in an infomercial she saw. "It was sort of a lazy, depressive Saturday kind of purchase," Ms. Geroff said, who said she felt she had gotten a good deal. She acknowledged, however, that one piece of the equipment was not used for exercise any longer, but as an extra coffee table when guests visit.
Infomercials never gained the trust of Mary O'Reilly, 64, a professional artist in St. Louis. "I've been tempted once or twice, but I remember the decoder rings, etc., of my youth that were always a serious disappointment when they finally arrived," Ms. O'Reilly said. Of infomercial advertisers, she said, "I suspect those guys depend on P. T. Barnum's philosophy that there's a fool born every minute."
She added: "Perhaps I malign them?" That, of course, is the question that the new guidelines are intended to settle.
NAT IVES, The New York Times. April 12, 2004.
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