August 5th, 2013

Oracle made over-the-top claims in a series of ads comparing its line of computer products to IBM’s line. NAD recommended in 2012 that Oracle modify its advertisements after IBM challenged the ads and Oracle was unable to substantiate its claims to NAD.

But Oracle ran another series of ads this year making similar claims. NAD now says Oracle is not making a good-faith effort to comply with its recommendations and has referred the ads to the FTC — the self-regulatory equivalent of sending an advertiser to the principal’s office.

Consumers should check into an ad’s claims on their own, especially before buying an expensive server.

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The National Advertising Division, or NAD, is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus. NAD asks advertisers to substantiate or change their claims in advertisements. As part of a voluntary system of self-regulation, however, its recommendations can be ignored by the offending advertisers. In those instances, NAD refers the offender to federal consumer protection agencies.

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