By Gregory B. Hladky
1:25 PM EDT, April 3, 2013
Remember those Skechers "toning shoes" that were supposed to make your butt firmer and help you "get in shape" without ever setting foot in a gym? Or how about the "Multi-Omega" pills that are allegedly great for everything from high blood pressure to arthritis and obesity?
The folks behind "Truth In Advertising," a new Connecticut-based website, believe the claims that have been made for those products are only the smallest tip of a multi-billion-dollar deceptive-marketing iceberg.
"We want to be the Consumer Reports of false advertising," says Bonnie Patten, a lawyer and executive director of the recently created nonprofit watchdog organization.
The Truth In Advertising (or TINA, as they like to refer to themselves) group intends to act as a clearinghouse for information and warnings about false advertising. The people behind it want to provide consumers with a one-stop site where they can report deceptive ads, learn about new scams and find out where they can go to get government help if they've been conned.
"Government [consumer protection] agencies are short-staffed and, with the amount of deceptive ads out there, unfortunately there's no way they can address all of it," Patten says when asked why a private Truth In Advertising site is needed.
Connecticut's attorney general, George Jepsen, has no problems with getting outside help to deal with deceptive advertising.
"It's a very big issue," says Jepsen. His office is regularly involved in actions attempting to rein in companies that are advertising on the wild side.
Jepsen says the web has expanded the problem to immense proportions.
"The Internet gives scam artists a huge opportunity to reach consumers," explains Jepsen. "It's opened up a whole new vista for scam artists to con consumers."
The TruthInAdvertising.org website has been up and operating for only a few weeks, but the concept has been brewing for decades, according to Patten.
Creating a pro-consumer organization able to check on whether ads were telling the truth was the brainchild of Michael Vlock. The funding is coming from the Seedlings Foundation, a nonprofit set up by Vlock and his wife, Karen Pritzker.
Pritzker happens to be a member of the Pritzker family of Chicago, an extremely wealthy clan (something like 11 billionaires, including Karen) whose business interests include stuff like the Hyatt hotel chain and Royal Caribbean Cruise Lines. Vlock is no slouch himself as an investor and manager of his and his wife's investments.
Pritzker and Vlock live on the Branford shoreline and are well-known for their donations to Yale (like $20 million to the School of Medicine) and other research institutions.
The damage of fraudulent ads isn't only to the consumers who end up with shoddy products, according to Vlock. Legitimate companies are often victims of the scam ads offered by their competitors.
Seedlings Foundation has already committed $5 million to set up TruthInAdvertising.org, says Vlock. The foundation is planning additional funding down the line and hopes to bring in other nonprofit sponsors. "We see this as long-term," he says.
The Federal Trade Commission, state attorney generals' offices like Jepsen's, and consumer protection agencies all play roles in trying to curb deceptive ads.
The FTC, for example, last year handed out the largest fine in its history in connection with those false Skechers ads for its "toner shoes." The problem is, says Patten, even that $40 million in fines may not mean much to a huge company like Skechers.
"Most of corporate America just takes those fines as part of the cost of doing business," she says.
The U.S. Food and Drug Administration in early February put out a warning letter disputing the claims being made by Emu Products and Management, makers of those "Multi-Omega Gel Caps" and half-a-dozen other products for which the company was making extravagant claims.
Part of the difficulty in dealing with these kinds of ads is no one really knows how big this deceptive advertising monster really is. "It's something that hasn't been quantified," says Vlock. He and Patten are convinced the problem is in the multibillions of dollars. They want to get a major educational institution involved in a detailed study financed by Truth In Advertising.
Patten acknowledges that Consumer Reports and some other organizations have done good work in alerting consumers to a variety of cases of fraudulent ad claims. "Where we are a little different," adds Patten, "is that this is our exclusive focus."
Patten points to their first legal action, a letter warning a company called NourishLife "that they were engaging in deceptive advertising."
According to the company, it produces "Nutritional support for healthy speech development," and touts its products as "a patented nutritional formula developed by a pediatrician to support normal and healthy speech development and maintenance."
Except Patten says her group believes the products "may have health risks." She says that, in addition to the warning letter to the company, Truth In Advertising also plans to file a complaint with government agencies.
Vlock believes too many consumers still have no idea that the site is up and operating and — in what could be considered by some an ironic note — wants a major advertising campaign to promote the organization and its goals.
"My inclination is to go with TV advertising," Vlock says; he hopes to begin the campaign within the next two to three months. In order for the site's concept of consumer involvement to work, he says, "It needs to be used very broadly."
The idea of advertising a truth-in-advertising website may sound a little counter-intuitive, but Vlock insists the advocacy group isn't in the least against good advertising.
"Advertising plays an absolutely essential role" in telling consumers about the products that are out there, he says. In fact, Vlock adds, "There's nothing at all wrong with putting a hot girl in a beer advertisement."
Another advantage to a big national publicity campaign about the new website is that it will put American industry and commerce on notice.
Vlock believes there will be industry organizations that will cheer the creation of this ad watchdog group because it will help weed out the bad players in the system. But there will also be plenty of businesses and industries that won't like TruthInAdvertising.org at all, he says.
And for those types, Vlock believes, a big ad campaign telling the world about the new organization "will be sort of a shot across the bows."
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