Submitted to:
Federal Trade Commission
CRC-240
600 Pennsylvania Ave. N.W.
Washington, DC 20580
Submitted by:
People for the Ethical Treatment of Animals, Inc.
Jeffrey S. Kerr, General Counsel
501 Front Street
Norfolk, VA 23510
Tel: 757-622-7382
Fax: 757-622-0457
December 30, 2002
NATURE OF THE COMPLAINT
1. This complaint requests that the Federal Trade Commission (Commission) take action against the Bank of America Foundation’s (hereinafter "BOAF") ongoing deceptive advertising practice of falsely representing that it does not fund national health organizations in an apparent attempt to evade public criticism of its support for the March of Dimes, a national health organization engaged in animal experimentation. For more than two years, People for the Ethical Treatment of Animals, Inc. (hereinafter "PETA"), on behalf of its more than 750,000 members and supporters, together with several other charities and their supporters, has conducted a nationwide educational campaign to inform banking consumers that the BOAF provides millions of dollars annually to the March of Dimes for use in animal experimentation. The growing national opposition to animal experimentation makes the BOAF’s support of that practice a material factor in the decision of compassionate consumers to conduct their banking elsewhere. PETA recently learned that despite its ongoing, multi-million dollar support of the March of Dimes, the BOAF falsely advertises that "[n]ational health organizations (or their local affiliates) or research/disease advocacy groups" such as the March of Dimes are ineligible for BOAF support. Accordingly, the BOAF advertisements are unlawfully deceptive and an appropriate subject of Commission action.
PARTIES
2. PETA is a nonprofit charitable corporation organized under the laws of Virginia and is exempt from federal income tax pursuant to §501(c)(3) of the Internal Revenue Code. PETA is headquartered at 501 Front St., Norfolk, VA 23510. PETA and its members are committed to ameliorating the suffering of animals and ensuring their humane treatment. PETA has conducted investigations into and campaigned extensively against the use of animals in experiments and maintains several Internet Web sites that detail the horrific suffering and abuse inflicted on primates, mice, rabbits, and other animals by the animal experimentation industry. Since September, 2000, PETA has specifically directed its efforts toward protesting the March of Dimes for funding experiments on animals. PETA maintains a Web site dedicated to this educational campaign at MarchofCrimes.com. PETA files this complaint for itself and on behalf of its members.
3. Upon information and belief, the BOAF is a private foundation established by the Bank of America Corporation, a for-profit banking institution, for the purpose of managing all charitable operations of Bank of America offices and branches around the United States. The BOAF is located at 315 Montgomery St., 8th Fl., San Francisco, CA 94194-1866. According to its Web site (www.bankofamerica.com/foundation), the BOAF is an extremely sophisticated organization, boasting the largest philanthropic budget of any financial institution in the U.S. It donated a total of $87.4 million in 2000 and more than $85 million in 2001. Control over the BOAF’s funds is placed in the hands of local executives who determine where the funds go and in what amounts. The BOAF also advertises that proposals not aligned with its focus will not receive funding. For many years, the BOAF has been a large corporate sponsor of the March of Dimes, including its annual Walk America walk-a-thon fundraising events. Upon information and belief, local Bank of America offices across the country donate funds and send representative teams of walkers to many of the individual walk events each year. According to the March of Dimes, the BOAF generally contributes more than $1million each year to the March of Dimes.
JURISDICTION
4. Jurisdiction is appropriate in this matter pursuant to the Federal Trade Commission Act, 15 U.S.C. § 41, et seq.
5. The advertisements in question have been disseminated, and continue to be disseminated via the Internet, mail, and in person.
STANDARD OF REVIEW
6. An advertisement is unlawfully deceptive where there is a material representation, omission, or practice that is likely to mislead a reasonable consumer who is a member of the particular consumer group targeted or is likely to be affected by the ad. Omissions of material fact can be as unlawfully deceptive as affirmative misrepresentations, particularly where the omitted information is needed to discover that an ad’s claims are false.
7. As set forth in the Commission’s policy statement on deceptive advertising, the test for materiality is "whether the act or practice is likely to affect the consumer’s conduct or decision with regard to a product or service."
8. Intent to mislead is not required for an advertisement to be unlawfully deceptive, but it can be a factor for the Commission's consideration. The Commission has acknowledged in its policy statement that an interpretation of an ad claim will be deemed both reasonable and material if it is the claim that the advertiser intended to convey.
9. Over the last 30 years, animal treatment issues have become an integral part of consumer purchasing decisions on a wide variety of products and services. Especially prominent among these considerations is the issue of animal testing, as demonstrated by the thousands of products that are advertised as cruelty-free, having not been tested on animals. Therefore, an advertiser’s statements or omissions concerning its support of or opposition to animal testing is a material consideration in the purchasing decisions of millions of consumers on a daily basis. In short, consumers purchase more than just an advertiser’s products or services, they also purchase the advertiser’s corporate ethics.
PETA’S CAMPAIGN AGAINST THE MARCH OF DIMES AND THE BOAF
10. Since September 2000, as part of its educational program to convince charities to stop funding experiments on animals, PETA has conducted an extensive national campaign against the March of Dimes’ practice of funding animal experimentation. PETA’s efforts have included hundreds of demonstrations and protests at the March of Dimes’ offices and events around the country. PETA’s Web site at MarchofCrimes.com details the nature and extent of that campaign.
11. PETA’s campaign has focused attention on the cruelty and absurdity of March of Dimes-funded animal experimentation, including sewing shut the eyelids of newborn kittens and killing them one year later to study the effect on their brains (even though the March of Dimes admits that no clinically relevant information came from such studies), and giving cocaine and alcohol to pregnant rats to determine the effect of the drug on their offspring (although the use of such substances by pregnant women is well-known to cause birth defects and other severe problems in newborn children).
12. One aspect of PETA’s campaign has been to encourage consumers opposed to animal experiments to pressure the March of Dimes’ major corporate sponsors to restrict their donations for non-animal uses. This approach has achieved remarkable success, resulting in national March of Dimes sponsors, including K-Mart, Sara Lee, and Jamba Juice, restricting their donations for use in non-animal programs. Restricted donations are common among sophisticated charities like the March of Dimes and the BOAF where funds are required to be used only for a specified purpose or prohibited from being used for a particular purpose.
13. During Fall 2000, PETA learned that the BOAF is among the March of Dimes’ top five corporate sponsors, donating more than $1 million per year. A March of Dimes news release even reported that a senior Bank of America official was installed on the March of Dimes national board of advisors. Therefore, PETA began contacting the BOAF to request that it halt its donations to the March of Dimes or restrict them to non-animal uses.
14. Despite the positive responses of the other March of Dimes sponsors listed above, the BOAF refused to meet with PETA on this subject and continued to fund the March of Dimes to the tune of millions dollars each year through it’s local affiliates’ support of Walk America and possibly other fund raising events. As a result, PETA began a national campaign encouraging its members and the public to boycott the Bank of America (which is the source of funding for the BOAF) until it changes its policy of donating funds to the March of Dimes that can be used in animal experiments. PETA was a long time Bank of America customer prior to this campaign and removed its business, totaling millions of dollars annually, from its local Bank of America branch in protest of its support for the March of Dimes. Other corporate, charitable, and individual Bank of America accounts also have been closed as a result of PETA’s campaign and the revulsion of compassionate consumers to animal experimentation.
THE BOAF’S DECEPTIVE ADVERTISEMENTS
15. The contents of the BOAF Web site are clearly directed to existing and potential banking customers and are designed to encourage people to begin or continue using the Bank of America. As such, the Web site contents constitute a series of advertisements for the Bank of America and the BOAF. A December 30, 2002, printout of the BOAF Web site is attached as Exhibit A with the pages numbered sequentially for the Commission’s ease of reference. Upon information and belief, the Web site advertisements discussed in this complaint have appeared in their current form for several months at the least.
16. In the wake of PETA’s national campaign opposing the BOAF’s funding of March of Dimes’ animal experimentation, the BOAF Web site provides as follows:
- The BOAF has adopted "new guidelines" to focus its resources on helping children succeed by funding programs only in the following areas: early childhood development, economic and financial education, and teacher development. Exhibit A, pp. 1-5.
- The BOAF’s Application for Charitable Giving explicitly provides that "proposals not aligned with our focus...will not receive funding." Id., at p. 4 (emphasis added). Included among the specifically enumerated "Ineligible categories for funding" are "National health organizations (or their local affiliates) or research/disease advocacy groups." (Emphasis added.) The foregoing BOAF giving guidelines are hereinafter collectively referred to as "the Advertisements."
17. The March of Dimes is a national health organization, composed of local affiliates across the country and, therefore, is ineligible for BOAF funding according to the Advertisements’ clear terms.
18. Neither the Advertisements nor any other part of the BOAF Web site makes any mention whatsoever of the BOAF’s support for the March of Dimes or any other national health organization. This omission, together with the Advertisements’ stated funding guidelines and exclusions, would lead any reasonable banking consumer concerned about animal experimentation and the BOAF’s support of the March of Dimes to believe that the BOAF no longer provides financial support to the March of Dimes, any of its local affiliates, or any other national health organization that may be involved in funding animal experimentation.
19. Suspicious of the Advertisements, in November, 2002, a PETA member residing in New York state contacted Raichelle Glover, the BOAF regional contact for New York (see id., at p. 11), to verify that the BOAF no longer funds the March of Dimes as represented in the Advertisements. In response, Ms. Glover first mailed the person a copy of the Advertisements, including the funding guidelines and the prohibition against funding national health organizations. Upon receipt of the Advertisements, the PETA member telephoned Ms. Glover to inquire specifically about the status of the BOAF’s support for the March of Dimes. Ms. Glover informed the person that, in fact, the BOAF does still fund the March of Dimes through its local affiliates and also funds the American Cancer Society, another national health organization,
contrary to the plain language of the Advertisements that state unequivocally the BOAF’s prohibition of gifts to such ineligible organizations. Therefore, the Advertisements are materially false and deceptive.
20. The consumers most likely to be misled by the Advertisements are those conscientious and compassionate people who reasonably do not want to provide their banking business (and the corresponding direct financial support) to a bank that donates millions of dollars to an organization that funds experiments on animals. Being misled by the Advertisements is an entirely reasonable response by such consumers, as the Advertisements specifically and affirmatively state that national health organizations like the March of Dimes that conduct experiments on animals are specifically excluded from receiving BOAF funds, and the Advertisements omit any mention of the BOAF’s contributions to the March of Dimes contrary to the Advertisements. When the Advertisements are taken at face value by reasonable consumers, this omission precludes them from discovering that the Advertisements are false.
21. The materiality of the Advertisements’ deception is apparent. Whether the BOAF does or does not provide unrestricted financial support to the March of Dimes and other national health organizations that conduct or fund experiments on animals is a simple yes or no question, and the reasonable consumer is eminently entitled to rely on the untruthful negative response contained in the Advertisements, precisely because of this simplicity.
CONCLUSION
22. The essence of our laws prohibiting deceptive advertising is the right of consumers to make informed purchasing decisions, including the selection of banking services. The BOAF Advertisements induce consumers to make decisions based on misinformation by purposely and grossly misrepresenting and hiding the BOAF’s support for the March of Dimes and other organizations that fund animal experimentation.
23. The BOAF’s deceptive Advertisements injure compassionate consumers and PETA requests that the Commission take all appropriate action to prohibit these and any similarly false and misleading advertisements.
Respectfully submitted,
Jeffrey S. Kerr, Esq.
General Counsel, People for the Ethical Treatment of Animals, Inc.
501 Front St.
Norfolk, VA 23510
Tel: 757-622-7382, Ext. 1490
Fax: 757-622-0457
