NAD Refers Advertising Claims made by Sprint in ‘Save 50%’ Campaign to FCC after Company Fails to Fully Implement NAD Recommendations

New York, NY – Aug. 19, 2016 – The National Advertising Division has referred advertising claims made by Sprint Corporation to the Federal Communications Commission (FCC) for further review after the company failed to revise certain claims made as part of its “Save 50%” advertising campaign as earlier recommended by NAD.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

In the underlying case, express and implied pricing claims made in broadcast, radio, Internet and social media advertising were challenged by T-Mobile USA, Inc. NAD determined that the primary message conveyed by the television commercials – that consumers could have the same rate plan for half the price simply by switching to Sprint – was not supported by the evidence in the record. NAD recommended that Sprint discontinue the challenged broadcast advertising and modify challenged Internet and in-store advertising to clarify the basis for price comparisons and better disclose its $36-per-line activation fee.

Sprint, in its advertiser’s statement, said the company “agrees to comply with NAD’s recommendations.”

NAD recently opened a compliance inquiry to assess the advertiser’s compliance with NAD’s recommendations. The advertiser informed NAD that it discontinued commercials that NAD found problematic, updated disclosures in its print and internet advertising and included compliant disclosures in new advertising.

NAD noted in its compliance decisions that it appreciated the advertiser’s efforts to discontinue the television advertisements challenged in the underlying case, and certain of the new television advertisements referenced by the challenger in its compliance inquiry letter.  However, NAD determined that the disclosures accompanying certain new television and radio advertisements presented the same issue that troubled NAD in the underlying case – namely that sweeping rate comparisons may be too detailed to fully explain in a 15- or 30-second spots. NAD recommended the advertiser modify both radio and television advertising to better disclose material information.

NAD further recommended that Sprint modify the “Save 50%” claim featured at its website to identify the competing rate plans that form the basis of comparison and disclose the differences in its international data and texting as compared to T-Mobile’s Simple Choice plans.

Finally, NAD recommended that Sprint modify its current in-store promotional flyer to include the differences in its international data and texting as compared to T-Mobile’s Simple Choice plans.

In response to NAD’s compliance inquiry, the advertiser indicated that it agreed to make some, but not all, of the recommended modifications.  Given that the advertiser has not agreed to implement all of NAD’s recommendations, NAD will refer the matter to the appropriate government agency pursuant to Section 4.1(A)(3)(b) of the NAD/NARB Procedures.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.