PITOFSKY'S FTC ENLISTS AD EXECS;AAF PLEDGES TO JOIN BATTLE AGAINST CONSUMER FRAUD

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WASHINGTON-The new leader of the Federal Trade Commission wants the advertising industry's help, and the industry was quick to offer it.

At a briefing at the American Advertising Federation headquarters last week, FTC Chairman Robert Pitofsky proclaimed himself generally satisfied with the state of national advertising-"the situation is largely where it ought to be"-and talked of other commission initiatives and interests, including global advertising, monitoring the new media, and fraudulent financial schemes that don't prey only on the "poor, vulnerable types."

The former Georgetown University Law School dean indicated a crackdown on such scams is a top priority, and he asked advertising people to "help us craft interesting and attractive" educational pieces.

"There is an epidemic of investment fraud in this country," Mr. Pitofsky said. "How do we get the message out? What good does it do to write the most beautiful brochures in the world if they just sit on the shelves? We need to get a little more high-tech."

When asked whether the Advertising Council could play a role in a consumer education campaign on fraud, Mr. Pitofsky replied: "Why not?"

AAF President Wally Snyder said the industry would respond "in a heartbeat." Such an effort "is not only the right thing to do, but it protects our customers."

Mr. Snyder, who was an FTC staffer in the early '70s when Mr. Pitofsky was director of the commission's Bureau of Consumer Protection, said he would put together a task force of industry experts to sit down with current Bureau Director Jodie Bernstein and her staff "to design effective communication formats."

Mr. Pitofsky also invited the industry's participation in "ambitious" hearings the FTC will hold this fall on global competition. The hearings will explore, among other things, the extent to which consumer protection issues "have become transnational."

He said he wants ad people to inform the commission about the extent of global advertising and how "the same ad must face different regulations in different jurisdictions."

In addition, Mr. Pitofsky wants to monitor advertising in the new media more closely. He asked if the National Advertising Review Board and the Council of Better Business Bureaus' National Advertising Division look at advertising on the Internet.

"I'd be delighted to share our reactions to these kinds of problems," he said.

(NAD has said it will launch its first efforts at monitoring online ads this summer.)

Mr. Pitofsky had high praise for national advertisers. When he joined the FTC in 1970, national advertising was "the first priority." The FTC chairman at that time, Miles Kirkpatrick, "brought a lot of cases, and we experimented with a lot of remedies," including corrective advertising.

"But it's not the first priority now," he told his AAF audience. "There is more restraint in that sector of the economy and better self-regulation." The NARB/NAD apparatus "is the best self-regulating system I'm aware of. They are most willing to go out on the limb and crack down on their colleagues."

Having said that, however, Mr. Pitofsky said the commission is "relooking at remedies, and if there were times corrective advertising were appropriate, it could be a useful tool." Such instances, he said later, would be if the advertiser's misleading or deceptive message had been "memorable" over a long period of time.

Mr. Pitofsky seemed surprised that the advertising tax deductibility issue had raised its head in Congress. He said as far as he knew the FTC had never taken a position on deductibility, but he considers advertising to be "a device to facilitate competition" and gave the impression he wouldn't look with favor on anything to inhibit that process.

Ms. Bernstein, FTC's consumer protection bureau chief, when asked about the current state of advertising from a creative standpoint, told the AAF group she thinks it's "more interesting and entertaining" than when she served on the FTC with Mr. Pitofsky in the '70s.

Mr. Pitofsky, for his part, replied: "Ditto.'

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