AGs Don't Even Have to Open the Envelope

A friend who is a consultant to auto dealers regularly supplies me with examples of direct mail advertisements from his dealer clients. Almost always, the ads he forwards to me are mailers that have been sold to the dealers by an ad company. Almost always, the level of noncompliance of these mailers, and the legal risk to any dealer using them, is very high.

The latest batch of mailers arrived yesterday. After reviewing them, I was struck by one particular problem common to several of the pieces. The problem I noticed was that an attorney general would not even have to open the envelope to suspect that the mailer contained violations.

One mailer showed in the return address area of the envelope the name “Program Headquarters.” Of course, what was enclosed was not a letter from Program Headquarters, but rather an advertisement from a dealer. The obvious intent of using “Program Headquarters” instead of the dealer’s name was to avoid a prompt trip to the round file. Other mailers used return addresses such as “Main Office” or (my particular favorite) “Disbursement Headquarters.” Another mailer had a similar return address using initials next to a federal-looking eagle. Inside the clear window on the front, you could get a glimpse of something that might just be a check. “Hey, a check from the government. I’ve gotta open that!”

Another mailer was gussied up in a red-and-white color scheme to resemble a U.S. Post Office priority letter. The envelope actually said “Priority Documents,” “Express Delivery” and “Return Receipt: REQUESTED” on the outside. For knowledgeable eyes, the “Presorted Standard” postage gave this one away, but many consumers wouldn’t notice that. Inside? Nothing but a one-page flyer announcing a dealer’s sale.

Then there are those envelopes that bear stern warnings about the punishments for interfering with or obstructing delivery of the mailer, or stealing it. The warnings apply to all mail, including that birthday card you just got, but no one except people who peddle direct mail finds it necessary to print these warnings on the outside of the envelope.

So what’s wrong with these little direct mail tricks, you ask? Maybe nothing – I was told that the purveyor of these materials said he’d been using them “without a problem” for 20 years.

But maybe he’s just been lucky. In the last couple of years, we’ve seen intense interest by AGs in dealer advertisements of all kinds, including direct mail ads. The AGs target ads they deem to be “unfair or deceptive.” In at least a couple of the enforcement actions that have been reported, the allegations involved mailing envelopes that were made up to look like official correspondence of some sort. I think an AG would have the same problem with the sorts of misdirection I saw on the outside of many of these envelopes.

Even if these disguised ads didn’t turn out to be practices an AG would target, they are still dangerous, in my view. AGs don’t like deceptions like these. When they see them, they wonder whether there might be other deceptions inside the envelope, too.  It’s ironic—the ad companies use tricks to get consumers to open the mail, only to find that those same tricks are very effective at getting the AG to pore over the direct mail advertisement looking for other deceptions.