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Thursday, October 24, 2013

Multiple Advertisements

QUESTION
We have an advertisement on our website and we also send out an email advertisement that is the same as the website advertisement. Are these considered a single advertisement? If so, what are the obligations for each advertisement?

ANSWER
Multiple advertisements in any media, such as web page advertisements on a website corresponding to a newsletter blast or in a catalog, are considered a single advertisement if the following criteria apply: (1) a trigger term is used; (2) such term requires a table or schedule in order to provide information regarding a finance charge associated with the trigger term, or any other term is used that appears in the opening disclosures; (3) the advertisement clearly and conspicuously sets forth or is required to set forth the foregoing table or schedule; and (4) these advertisements are required to refer and/or provide access to such table or schedule.

Put otherwise, single advertisement guidelines apply for any advertisement where a statement of finance charge is required for a trigger term, or disclosure is required in opening disclosures for any other term, where the trigger term or other term appear in a catalog or advertisement, thereby requiring clear and conspicuous reference to the page or location where the mandated table or schedule begins. [12 CFR § 226.16(c)(1), 2010]

For instance, in any advertisement where a trigger term necessitates a statement of finance charge – indeed, any other term that appears in opening disclosures pursuant to Regulation Z § 226.6 – the advertisement must clearly refer to the page, web page, or any media location where a table or schedule is found and begins.

Therefore, in each online, website advertisement and its corresponding newsletter advertisement, a hyperlink to the table or schedule containing required additional information should be provided for a trigger term requiring a statement of finance charge and/or any other term that appears in opening disclosures. [12 CFR Supplement I to Part 226 – Official Staff Commentary 12 CFR § 226.16(c)(1)-2, 2010]

Jonathan Foxx
President & Managing Director
Lenders Compliance Group