NAD Decision on Debt Claims Holds Lessons Across all Industries

This week, NAD announced a decision involving various claims made by Accredited Debt Relief and its marketing agency. Although parts of the decision will likely only be of interest to companies who operate in the debt settlement space, the decision also holds some important lessons for companies that operate outside of that space. We’ll focus on those in this post.

Claims About Expected Results

Accredited Debt Relief advertised that its customers could cut monthly payments in half.” Although the company had evidence that some customers – less than one-third – had achieved those results, NAD took the position that consumers seeing the claim would assume it was representative of the typical consumer experience.” Accordingly, NAD thought consumers might be misled by the claim, and recommended that the company focus on more typical results.

NAD also noted that there was a detailed and lengthy” disclosure about the program and its material limitations at the bottom of webpages that included the challenged claims. Quoting FTC guidance, NAD wrote that material terms must be clearly and conspicuously communicated within the four corners of the advertising in which that claim appears.” Simply putting the information somewhere” people may find it is not sufficient.

One of the detailed and lengthy” disclosures NAD mentioned runs about 300 words. Does NAD really expect all of that information to be included in the ad copy? Probably not. In its decision, NAD highlighted certain terms – including the typical length of the program, the fees, and some exclusions – that seemed to be most relevant. Advertisers will have to undertake the difficult task of figuring out what terms are most material, including those in the body of the ad, and providing the rest in a disclosure.

Up To” Claims

In a similar vein, NAD challenged claims that consumers could reduce total debt by up to 50%.” What evidence you need to support an up to” claim can depend a lot on the context of the claim. While in some cases – such as perhaps a save up to 50% on sweaters during our Black Friday sale” – it may be enough to show that at least 10% of sweaters are discounted at the 50% level, in other cases, the substantiation burden can be heavier.

In the example I made up, consumers can presumably know how much they’ll save before making a purchase. In this case, though, NAD noted that consumers won’t know whether they’ll be able to achieve 50% total debt reduction before signing up and agreeing to pay substantial fees. In the context of a highly consequential claim of potential long-term savings,” NAD seems to expect that advertisers will use a number that reflects what all or almost all individual consumers will save.”

Native Advertising

NAD’s decision also focused on a website purporting to offer Reviews of the Top Debt Consolidation Companies” based on various objective factors. Accredited Debt Relief comes in at first place with a “#1 Top Rated - We Recommend” badge. Consumers who are impressed by that achievement may be a little less impressed if they read the footnote at the bottom of the site which states, among other things, that the site is owned by the same company that owns Accredited.”

NAD determined that consumers could reasonably expect the website to be independent. Any disclosure that the website is paid advertising content contradicts the message of independence and impartiality otherwise conveyed by a rating or ranking website. Disclosures cannot contradict the claims they are qualifying. A disclosure that the review site is owned by the advertiser, even if clear and conspicuous, cannot cure the misleading takeaway that the site is independent.”


This is the second case NAD has initiated in the debt settlement space this year. (You can read our post on the first one here.) If you work in this space, you should certainly take a closer look at both decisions because NAD seems to be focused on this area. But don’t ignore these cases just because you work in another industry. As our posts have demonstrated, the decisions include valuable lessons that apply across many industries.