AD NETWORKS

National Advertising Division Finds Chime's "No Overdraft Fees" Claims Supported; Recommends Qualification of "No Hidden Fees" Claims

National Advertising Division | December 29, 2021

The National Advertising Division (NAD) of BBB National Programs determined that Chime Financial, Inc.'s advertising for its "SpotMe" program disclosed the material information necessary to ensure that claims about its program are substantiated and that Chime's "no overdraft fees" claims are supported.

Further, NAD found that the Chime homepage adequately qualifies its "no fees" claim so that consumers understand that out-of-network ATM fees are not among the hidden fees it eliminates. However, NAD recommended that Chime qualify claims on its "No Hidden Fees" webpage and television advertising to make clear that the eliminated fees do not include out-of-network ATM fees.

The following express claims were challenged by NAD as part of its independent routine monitoring of truth and transparency in U.S. national advertising:

  • "Banking with no hidden fees"
  • "Say goodbye to hidden fees when you bank through Chime. No overdraft fees. No minimum balance fees. No monthly fees. No foreign transaction fees."
  • "Say goodbye to hidden fees*" (at the bottom of the webpage: "*Out-of-Network cash withdrawal fees apply. Third-party and cash deposit fees may apply.")
  • "And if I'm ever in a pinch, Chime SpotMe even lets me overdraw my account fee-free on debit card purchases."
  • "I don't have to worry about overdraft fees. There's no surprises, no hidden fees."
NAD also challenged implied claims that:

  • When banking with Chime, consumers will not be charged any of the traditional fees that are imposed by traditional banks.
  • Consumers will never be charged a fee they had not anticipated at the time of signing up for Chime.

"No Overdraft Fees" Claims

NAD inquired into whether claims about Chime's "SpotMe" program disclosed material limitations of the program and whether its "no fees" and "no overdraft fees" claims were truthful and not misleading.

Based on the advertiser's explanation of its "SpotMe" program, NAD determined that the "SpotMe" advertising disclosed the material information necessary to ensure that its claims about the program are substantiated. The claims that the "SpotMe" program allows for "fee-free" overdraft or "up to $200 on debit card purchases with no overdraft fee" are truthful, as Chime does not charge overdraft fees. As a result, NAD determined that the "no overdraft fees" claims are supported.

"No Hidden Fees" Claims

Chime customers can use over 60,000 in-network ATMs without incurring any fees. If a Chime customer chooses to use an ATM out of that network, they will incur an out-of-network ATM fee.

NAD determined that, absent a context that limits the message, Chime's "no hidden fees" claims reasonably convey the message that consumers will not have to pay "hidden" fees that are often associated with traditional banks, including out-of-network ATM fees charged by their institution. Accordingly, the proximity and placement of qualifying language is an important factor in determining if consumers that see the advertiser's "no hidden fees" claims understand that Chime charges out-of-network ATM fees.

NAD found that the Chime homepage adequately qualifies its "no fees" claim, however NAD noted consumers could miss the small font disclosure at the bottom of Chime's "No Hidden Fees" webpage and that the claims presented in Chime's television commercials could more clearly qualify the "no hidden fees" claim.

Accordingly, NAD recommended that Chime modify its "No Hidden Fees" webpage and television advertising to qualify the "no hidden fees" claim to make clear that the fees it eliminates do not include out-of-network ATM fees.

In its advertiser statement, Chime stated that it "agrees to make enhancements consistent with NAD's recommendations." Further, the advertiser expressed its belief that it has "adequately qualified its advertising statements regarding the assessment of out-of-network ATM fees . . . nonetheless, Chime will consider the NAD's observations in undertaking enhancements to disclosures on the 'No Hidden Fees' webpage and in television advertising."

All BBB National Programs case decision summaries can be found in the case decision library. For the full text of NAD, NARB, and CARU decisions, subscribe to the online archive.

About BBB National Programs
BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. The non-profit organization creates a fairer playing field for businesses and a better experience for consumers through the development and delivery of effective third-party accountability and dispute resolution programs. Embracing its role as an independent organization since the restructuring of the Council of Better Business Bureaus in June 2019, BBB National Programs today oversees more than a dozen leading national industry self-regulation programs, and continues to evolve its work and grow its impact by providing business guidance and fostering best practices in arenas such as advertising, child-directed marketing, and privacy. To learn more, visit bbbprograms.org.

About the National Advertising Division
The National Advertising Division (NAD) of BBB National Programs provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business.

Spotlight

Today's consumer engages more with video than any other marketing vehicle. Video is no longer just a nice-to-have, but an absolute must for organizations looking to engage audiences. Watch our video infographic to track the rise of video as a powerhouse marketing tool, and to understand what it means for your business.

Spotlight

Today's consumer engages more with video than any other marketing vehicle. Video is no longer just a nice-to-have, but an absolute must for organizations looking to engage audiences. Watch our video infographic to track the rise of video as a powerhouse marketing tool, and to understand what it means for your business.

Related News

ADVERTISER PLATFORMS

Musk Puts the Twitter Takeover On Hold

Twitter | May 17, 2022

Elon Musk, the richest man in the world, has put a halt on his acquisition of Twitter due to recent announcements from the company about the prevalence of spam and bot accounts on the platform. Nearly two weeks ago, Twitter released a report which stated that fake accounts on the platform made up less than 5 percent of daily users. The information lacked rigidity to support the claims, and it seemed flexible in its assessment, which became a turn-off for Musk.On this premise, Musk tweeted, "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users" Twitter also hinted at taking this report with a pinch of salt, as it stated, "The actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts" Musk claims himself as a "free speech absolutist and offered $44billion to takeover twitter on April 25th. Musk's purchase was expected to lead to a renewed focus on personal verification and a crackdown on bot accounts. To verify a user's identity on Twitter, Tesla CEO Elon Musk wants them to go through a more rigorous process than simply providing an email or phone number. This would prevent the prevalence of spambots on the platform, and the authorities will be able to act on the violators of the speech laws. Twitter's stock was initially down more than 20% in pre-market trade following the announcement, but the stock regained slightly. In his second tweet, Musk stated that he is "still committed to acquisition" two hours after his first one.

Read More

AD NETWORKS

Dentsu Launches Contextual Targeting Tool

Dentsu | June 09, 2022

Dentsu is launching a new Contextual Intelligence tool across its U.S. media agencies. Contextual targeting has gained relevance as Apple and Google take moves to limit web monitoring. Contextual Intelligence uses unique algorithms to link brand targets with content across Carat, Dentsu X, and iProspect. Five clients have already utilized the tool. Dentsu reports that the return on investment for one company, the luxury jewelry store Pandora, was 24 times larger than any other Valentine's Day test advertising technique. Katie Nevin, Pandora's paid social and programmatic coordinator, referred to Contextual Intelligence as "a competitive advantage as we strive to earn increasingly limited attention in the market." Akash Jairath, chief product officer of Dentsu Media, U.S., said, "The tool starts by assigning content labels to URLs based on users inputting keywords, phrases and other URLs they've identified as relevant to their customers. The Competitive Intelligence tool fine-tunes those targets and pushes a list target URLs to demand-side platforms for programmatic buys." Akash Jairath, chief product officer of Dentsu Media, U.S., said, "The tool starts by assigning content labels to URLs based on users inputting keywords, phrases and other URLs they've identified as relevant to their customers. The Competitive Intelligence tool fine-tunes those targets and pushes a list target URLs to demand-side platforms for programmatic buys." Jairath further stated, "Given the impending loss of cookies in Chrome and restrictions on targeting in the Apple ecosystem, contextual targeting is definitely getting more interest from clients." Much of this sophistication and data science is contextual, so it has become a more precise instrument than a crude one. Yet another advantage of contextual targeting is when it misses the mark, maybe not reaching a known client or past website visitor, but instead reaching those with similar interests who may become new customers for a company. Akash Jairath, chief product officer of Dentsu Media, U.S., said, "It started out with people thinking of it as waste, but it's really a halo effect. That's thought to work well for branding, but even from a performance standpoint, it certainly has a halo effect."

Read More

AD NETWORKS

Only 10% of Major U.S Advertisers Think Their Creative and Media Teams Are Aligned

Smartly.io | May 26, 2022

On May 24, Ad-Lib.io, a Smartly.io company, announced the publication of a new survey conducted by WBR Insights titled ‘Releasing the Power of Digital Creative’. This survey uncovers the sentiments of major U.S advertisers about the opportunities to boost ROAS via investment in creative capabilities. It also discusses the roadblocks in the way of creative effectiveness. To get these insights, WBR surveyed 100 major U.S brands and multi-brand retailers with advertising budgets greater than $50 million. 89% of the respondents felt that the creative scale, creative team acumen and creative-driven ad addressability were priorities for improved ad performance. However, only 10% felt that their creative and media teams were aligned to make this a reality. The majority of the survey respondents struggled with agility while executing campaigns. For 64% of respondents, creative intelligence and data were important in anchoring campaign effectiveness. The majority of survey respondents use some form of a technology platform for overcoming creative management challenges. Those who do not use one are on the lookout for a solution that supports cross-team alignment, campaign automation and creative intelligence. They comprise 97% of the respondents. They hope to capitalize on the creative opportunity with the help of a platform. “A greater focus on digital creative has the power to transform digital advertising, but as the industry moves away from reliance on cookies and other third-party data, marketers will need to find new ways to connect their big ideas with data-driven campaigns,” said Oli Marlow Thomas, Ad-Lib.io Founder. “A greater focus on digital creative has the power to transform digital advertising, but as the industry moves away from reliance on cookies and other third-party data, marketers will need to find new ways to connect their big ideas with data-driven campaigns,” said Oli Marlow Thomas, Ad-Lib.io Founder. “This survey helps to identify the obstacles that major advertisers encounter as they scale their campaigns and identifies a role for automation and intelligence to overcome them.”

Read More