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The Fine Print of Marketing

August 19, 2020 / Guest Author

It’s an easy trap to fall into… You’re working on a marketing campaign and trying to come up with a great headline. You want to say to consumers that you offer the ‘best service’ and the ‘best price’ through your brokerage. Or, that they will save significantly should they opt for one of your insurance policies. And often there’s a caveat to your headline’s claim, which is likely buried in fine print, if there is fine print.

The fact is not all customers will actually get the ‘best price’ or save significantly, since every customer is unique and has different risk attributes. Using a blanket statement offering the ‘best’ of anything could be misleading and, potentially, false given the subjectivity of the term and what each customer deems it to mean.

The Canadian Competition Act is a federal law that contains numerous provisions that prohibit deceptive marketing practices. Its purpose is to prevent advertisements from making false or materially misleading representations and representations that are not based on “adequate and proper testing”. The Competition Act does not define what constitutes “adequate and proper testing”; rather, the onus is on the advertiser to show that testing was conducted, and have the data to prove their claim is true and accurate, before making the advertisement public. When testing your statement, review and analyze the entire message, looking at the intent, including literal and implied meanings.

For example: An advertiser claims that their product is “The only low calorie whipped cheese.” The general impression from this claim is that the product is the only low calorie cheese in a whipped format. It may be the only cheese in a whipped format, but it is not the only low calorie cheese. The claim is misleading because it implies that there many whipped cheese products available, but this is the only low calorie one. A clearer claim would be “The only cheese in a whipped format, and it is low calorie”.

Let’s look at another example where the advertiser made a true statement, but failed to reveal certain essential information. They claimed “Our new muffin mix contains twice the amount of chocolate chips.” Their statement about the number of chocolate chips being doubled was true… what they failed to mention is the chocolate chips were now smaller, and in fact the overall amount of chocolate included in the mix was the same as before.

In some cases, advertisers may make a statement that is technically true, but it creates a misleading impression by making a claim that may not be materially significant for the consumer. For example, a product claimed “The purest baking soda filtered to remove 99.9% of impurities.” This suggests that this brand is more pure than other baking soda brands, or that other brands may be impure. In fact, all baking sodas are filtered to remove 97% of impurities. The difference of 2.9% was deemed imperceptible to consumers.

Bottom line is when creating headlines or advertising statements, make sure that they are:

  • 100% true and not misleading. Break down each individual statement and ensure they are true and supportable by the facts.
  • Not hiding vital information. The fine print cannot contradict the main offer. Fine print should only be used to add additional information to the main claim. For example, if your claim is that you offer Umbrella Liability insurance, it’s important to state that it can only be written with supporting business (as an example).
  • Providing a clear message about the benefit. When stating facts, ensure they can be substantiated. When using a value to reflect, for example, potential savings, consider stating that consumers can save ‘Up to’ a certain amount. Also, ensure the example of savings that you provide is achievable by a reasonable percentage of potential customers. There is no rule of thumb, but a target may be that at least 50% of customers could benefit from the claim advertised.

Read the Fine Print

Whenever possible, it is advisable to include all material information within your main claim. In some cases, however, additional information will need to be provided as a disclaimer (or fine print) to support your statement. This disclaimer should be used to provide information relevant to expand upon your main claim, but never contradict it.

Here’s an example of a good disclaimer:

“By installing a Telematics device* in your vehicle, you may be able to save money on your insurance based on observed good driving habits.”

* Telematics collects data on driving behaviours recorded through a device plugged into the vehicle’s diagnostics port, which are stored through a third party vendor. For privacy information, visit our privacy policy.

This example does not contradict the main claim, rather provides additional information about the use of telematics, and offers a resource for customers concerned about their privacy, through a clear link to the privacy policy (simply illustrated here).

A few general rules about the use of Disclaimers:

  • They should not be relied upon to correct what would otherwise be a false or misleading statement. They also shouldn’t contradict the main claim.
  • They should be clearly visible and written in plain language. Don’t make consumers have to search for the ‘fine print’.
  • When using hyperlinks, ensure they are prominently placed, and that the reader is taken immediately to the pertinent text following the link.

The Real Fine Print

Fines and penalties for contravening certain provisions of the Competition Act can be hefty:

  • For Individuals:
    • First incident = $750,000 fine
    • Repeat conduct = $1 million fine
  • For Corporations:
    • First incident = $10 million fine
    • Repeat conduct = $15 million fine
  • Criminal Offences:
    • Maximum term of imprisonment for criminal deceptive marketing = 14 years

Don’t worry though – there are lots of resources available* to help you ensure your marketing efforts meet the standards:

* These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or approval by CAA Insurance Company.

(See what I did there?)