The Trump administration’s openness to rethinking federal regulations has led the National Association of Broadcasters to propose the rules regarding auto leases and loans be amended to make radio more advertiser-friendly. In a filing with the Federal Reserve, the NAB says the flurry of disclosures read at the end of spots has made some advertisers, particularly automobile dealers, “reluctant” to use radio as a form of advertising because so much air time is devoted to the listing of terms and conditions. In speeds that few Americans may understand other than auctioneers, the NAB says consumers are unlikely to retain the required commercial tags. So it is proposing the government rethink what it is mandating on radio and television. “There is a better way to provide consumers with the information they need,” it said in a filing with the Fed.
NAB is proposing the Federal Reserve’s Board of Governors allow radio and television stations to refer consumers to websites for details about an offer’s terms and conditions. Current rules allow broadcast ads to offer a toll-free telephone number that provides the information, and NAB argues that an online option is a “local extension” and is “more consistent” with how consumers actually shop today. “Placing these disclosures on a website will allow consumers to review terms and conditions at their convenience, which will aid in comparison shopping and in reviewing terms with others involved in the buying decision,” it tells the Fed.
Only two of the required five disclosures are allowed to be shifted to a toll-free number or print advertisement under current federal regulations, but NAB is proposing the government streamline the on-air disclosure requirement by allowing two other disclosures also be made online. That includes the total amount due prior to or at consummation. And the number, amounts, and due dates or periods of scheduled payments under the lease. “The pervasive nature of the internet, and the degree to which consumers have adapted to online commerce, strongly support recognition by the Board that disclosures made on a publicly available website are at least as consumer friendly and transparent, if not more so, than disclosures made on a toll-free number or in a print advertisement,” the NAB said in the filing.
The Federal Reserve’s Board of Governors in December opened the door to looking at several consumer financial protection laws related to the sale, leasing, and servicing of motor vehicles. That included the content of required disclosures to consumers before they sign their name to any contracts. It also proposed removing outdated language in the regulation that previously protected members of the media who appear in car ads from any civil fines for violations of the advertising provisions committed by the dealer. The Board noted that’s no longer needed since spokespeople are no longer covered by the regulation in any fashion. The Fed is also looking at home mortgage disclosures although it isn’t proposing any changes to the advertising regulations governing those types of loans. Comments in the proceeding were due earlier this month and it’s unclear how soon the Board may act on the rulemaking proposal.
FCC Gives Unofficial Nod To Proposal
Auto ad disclosure requirements have long been a frustration for broadcasters. The New Jersey Broadcasters Association last year teamed up with Katz Media Group to begin laying the groundwork to help convince the Federal Trade Commission to ease its rules and green-light the move of disclosures to the internet. NJBA president Paul Rotella tells Inside Radio they received an “unofficial endorsement” from the Federal Communications Commission on the idea. “They don’t’ see any reason why we couldn’t do it,” Rotella said. “It would improve creative and it would be actually more informative because it would direct people to a website as opposed to that ridiculous disclaimer. It would be the most intelligent thing to do in terms of full disclosure.”
Broadcasters have also approached automakers to bring their lobbying support to the effort in Washington. But with several federal agencies involved, as well as a variety of state statutes in place, changing auto ad disclosures faces several complications. One potential path that’s being explored is whether to work with Congress to get legislation passed allowing online ad disclosures.