Exhibit A on any list of failed disclosures is the credit and leasing-terms information that appear whenever TV commercials tempt viewers with low lease or installment credit payment offers. This information is important to consumers and marketers alike, especially now that new-car buyers are increasingly confronted by not very well understood leasing plans. Yet few viewers can possibly absorb the lines of required disclosure information flashed on the screen.
The answer is simplification, not more words, bigger type, or more encroachment on the basic selling purpose of what is after all the advertiser's time. And the Federal Reserve Bank, responsible for these particular disclosure standards, thankfully is considering changes. The Fed has already simplified the rules for radio, making that medium more useful for auto advertisers in particular, and is now reconsidering the rules as they apply to TV and print.
The American Advertising Federation is urging the Fed's rulemakers to consider how 800 numbers and online World Wide Web pages can provide consumers the details of financing offers. Consumers are familiar with 800-number service, and more are gaining familiarity with the Web. So these media are serious options for policymakers who want consumers to have access to such vital information.
Few consumers will call or go online, however, unless the new disclosures communicate the importance of learning all the details of a credit or lease transaction. That calls for creativity, not the specialty of the Fed's regulation writers.
Our suggestion to the Fed: Ask the ad industry for help in designing a disclosure standard that really makes sense to consumers. Don't specify every word; let advertisers experiment. Insist that the key points be communicated clearly, but don't overload the message and turn off the consumers you're trying to help.