Most NAD cases are brought by competitors, but NAD can also initiate a proceeding pursuant to its "responsibility for monitoring and reviewing national advertising for truthfulness and accuracy." Looking at the cases NAD initiates on its own can help provide insights into its priorities and strategies.
A few months ago, NAD initiated an inquiry into an Instagram post sponsored by Blue Apron claiming that "Canceling meals is easy." In reviewing whether Blue Apron offered consumers easy ways to cancel meals, NAD noted that the FTC's recent report on "dark patterns" suggests that consumers should be able to cancel a subscription-based service through the same medium they used to sign up.
This month, NAD announced that it had initiated an inquiry into The Wall Street Journal's express claim that subscribers could "cancel anytime." Interestingly, NAD also read an implied claim into those two words:
NAD determined that a claim that consumers can "cancel anytime" reasonably conveyed the message that cancelling is easy. A consumer might reasonably expect that the ease of cancelling a subscription is similar to the ease of subscribing.
At the start of the inquiry, WSJ offered online cancellation to certain subscribers, but other subscribers had to call to cancel. During the proceeding, WSJ completed its planned expansion of its cancellation procedures to allow everyone to cancel online. Based on this change, NAD concluded that WSJ was able to substantiate the express and implied claims.
Notably, NAD doesn't have authority to enforce automatic renewal laws or to require companies to establish specific cancellation procedures. Nevertheless, NAD pursued the same result by reading a specific procedure into WSJ's statement that subscribers could "cancel anytime."
Presumably, WSJ could have pushed back on NAD's reading and refused to comply with its recommendations, but that would have likely triggered a referral to the FTC at a time the Commission is actively looking at these issues and seeking to impose penalties on companies that use "dark patterns" to make cancellation difficult.
If you want to keep track of updates in this area, subscribe to our blog. You can cancel anytime (with all that may imply).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.