Volvo and its ad agency will fork up for their forgery.
The car maker and its New York ad firm--Scali, McCabe, Sloves--have each agreed to pay a $150,000 penalty for a misleading "Monster Truck" TV spot that aired earlier this year.
Although the amount may not seem very large, it represents a major embarrassment to Volvo and its former agency. This is the first time that the Federal Trade Commission has required an ad agency--and not just an advertiser--to pay for a deceptive ad.
The action is a clear signal to advertisers and their agencies that the FTC is fed up with advertising shenanigans. The FTC has recently taken other advertisers to task--including Kraft and Perrier--for what it says are misleading ad claims. Agency officials say several major advertisers--especially those making false claims about health food products--will also feel the FTC's wrath in coming months.
"This is a confirmation that the FTC will not tolerate deception in advertising," said Gerald Caplan, deputy director of the FTC's Bureau of Consumer Protection. "We will have vigilant enforcement of the law. And ad agencies are not immune."
The Volvo commercial, which aired in October, 1990, featured a structurally reinforced Volvo withstanding the weight of an oversized truck rolling over it. Rival vehicles that appeared in the ad were structurally weakened to be crushed by the truck.
"Advertisers will have to start changing their ways," said Ivan Preston, advertising professor at the University of Wisconsin at Madison. "This will have a definite deterrent effect."
Meanwhile, consumer groups said Wednesday that it is about time that the federal government looked more closely at misleading automotive ad claims. And they are demanding even closer inspection.
"You can get away with making just about any claim you want in automotive advertising," said Clarence Ditlow, executive director of the Washington-based Center for Automotive Safety. "The only reason Volvo got caught was because their mistake was so flagrant."
Under the proposed consent decree, Volvo and its agency admit no guilt. In fact, Marvin Sloves, Scali's chairman, said in a statement, "We are pleased that this investigation was concluded without any finding of fault of the agency."
But the FTC's Caplan said that although that may be true, "if they had not signed the consent decree, the FTC would have filed a complaint and taken the matter to court."
Advertising Hall of Shame
The Federal Trade Commission has become more aggressive in recent months in pursuing advertisements that it believes are misleading. Here are some examples of advertisers it has called on the carpet:
Advertiser FTC's problem with commercial Status Volvo Demonstration in "Monster Volvo & agency signed Truck" car-crushing spot consent decree to was misleading. each pay $150,000 Kraft Company's claim about high Appeals court now calcium in cheese slices considering. is misleading. Perrier Group Bottled water firm Perrier agreed not made deceptive claims to run again. about filtration and processing of water. Miles Inc. Company made false claims Miles Inc. agreed to about health benefits of stop making claims. One-A-Day vitamins. Galoob Toys Toy advertising misled kids. Galoob and agency agreed to stop making deceptive ad claims. Asics Public misled by ads Asics agreed to stop saying gel in shoes improves making claim. athletic performance. Schering Claims about Fibre Trim Decision expected in as weight loss and high-fiber September or October. product are misleading.