The Hartford: Start making sense

The Hartford has joined the parade of insurance companies claiming that people who switch to their car insurance will save lots of money. For an explanation of why such claims are completely disingenuous, see my earlier post on Allstate here. But The Hartford's new television commercial has another problem: it raises more questions than it answers.

The ad makes the big savings claim first, but the supposed clincher comes later. If you switch to The Hartford, the ad says, the company promises not to "drop" you. Of course, the actors in the commercial don't bother to specify under what circumstances or for how long this promise applies, but the really bizarre part is the context. At the very beginning of the commercial, an offscreen voice asks several actors how long they've had their current insurance. The actors say eight to ten years, or so long that they can't remember. But if that's true, are these make-believe people really in danger of being "dropped"? Their current make-believe insurers certainly don't seem to think so. I have to ask, why does The Hartford even need to make this claim? Is the company notorious for dropping people after they have accidents? That's something real customers would probably want to know.

Cisco Systems: What if the MAYOR is a fake?

If you've read my previous post, then you already know that I'm concerned about people posing as experts and endorsing products. Add another category of deliberate deception: people posing as authority figures and endorsing products. Cisco Systems is running a television ad in which the actress Ellen Page supposedly returns to her hometown of Lunenberg, Nova Scotia. The "mayor" greets her and enthusiastically shows her the small town's new police department, which consists of a room with one officer and a Cisco-supplied system of electronic surveillance.

The problem is, he's not really the mayor. The real mayor of Lunenberg is the Rev. Lawrence Mawhinney, a Presbyterian minister who has worn the mayoral hat since 1979. So, does the real mayor actually endorse Cisco's products? Does he know that a younger, bald man is impersonating him on American television? Does Lunenberg even have a high-tech surveillance system made by Cisco?

Your guess is as good as mine. However, I did find out that Lunenberg does not have its own police department. The city relies on the Mounties instead.

Taco Bell: Can you tell the expert is a fake?

Plenty of television commercials contain dramatizations and ridiculous situations that can't possibly be real. But when a commercial skirts the line between reality and make-believe, does it become deceptive? I think it can, especially when the protagonist is portrayed as an expert who recommends the product being peddled.

To wit: Taco Bell is running a television ad with a supposed "shrimp blogger" who discovers the chain's new shrimp taco. It's so good, he says, that he doesn't know whether to blog about it or keep it to himself. Is this obviously ridiculous? Not quite. It's entirely possible that someone in the world blogs only about shrimp. Could a post on a blog cause Taco Bell to sell out of its shrimp tacos? Well, if the mainstream media picked it up, then sure, why not?

The problem is, some consumers might actually believe that this rugged gentleman with an antipodean accent really is an expert on shrimp. He's not - he claims to have blogged about and eaten something called a "Hercules shrimp", which doesn't exist. But what consumer would have gone to the trouble to check that little factoid? If any consumers do end up believing that Taco Bell has found a real shrimp expert to recommend their product, then this is deliberate, or at least negligent, deception.

American Beverage Association: They WHAT?

New York State is considering a tax on sugary soft drinks, and the American Beverage Association (you can guess who funds them) is running television ads opposing the tax. The ads have a man described as a New York minimarket owner saying that the tax will hurt his customers and his business. In fact, he says, his customers are on such tight budgets that "the majority of them" come into his shop with "notepads and calculators." Really?

Actually, it doesn't matter if he's exaggerating. The state is considering the tax because some politicians think that sugary soft drinks contribute to obesity, which ends up costing taxpayers money through higher costs in government health insurance. If the politicians are right, sugary soft drinks are like cigarettes and alcohol; consuming them makes other people worse off, so it's better for society if you don't consume as many of them as you'd like. That's the argument that the American Beverage Association should be trying to disprove, with scientific research and budgetary studies. But they're not - they're talking about notepads and calculators instead.

U.S. Marine Corps: Not so exclusive after all

The Marine Corps has a relatively new ad campaign called "America's Few" (read about it here). Television spots currently airing claim that many Americans will hear the call to serve, but few will become Marines. That's not exactly true. Figures from past years (I found various sources from the 1980s through 2000, though only anecdotal sources for more recent years) suggest that 85 to 90 percent of recruits do in fact make it through training and become Marines. The vast majority of those who don't are rejected for medical reasons. Now, this may be a testament to the effectiveness of military training or the selectiveness of military recruiting. Indeed, you wouldn't want the Marine Corps's training program to waste a lot of money on recruits who couldn't make the cut. Exclusive, however, it is not.

Michelin: A meaningless claim

Michelin's television commercials for its A/S "Energy Saver" tires say that putting the tires on your car can save you up to 109 gallons of fuel. By itself, this number doesn't mean anything. Is it 109 gallons per year, or over the life of the tires? If the latter, how long is the life of the tires? What kind of car and tires do you have to have now in order for that number to be correct?

The fine print says you'd need to drive 55,000 miles on the Michelin tires to realize the fuel savings, which are estimated versus a specific Bridgestone tire, the Turanza. So, if you buy the A/S instead of the Turanza, you might save about $300 over five years of regular driving. Here's the kicker: a quick check on Google shows that the Turanza sells for about $100 less per tire than the A/S, or $400 less per set - more than the supposed fuel savings. Moreover, by buying the Turanza you'd pay $400 less up front, instead of waiting five years to save $300 on gas with the A/S. It's not such a great deal after all.

Putting the potential savings aside, is this good advertising? If you don't read the fine print, the ad's spoken claim is so vague that it's impossible to evaluate. Moreover, the Michelin web page that cites the same 109-gallon figure doesn't even have any fine print - truly advertising at its worst.

First Liberty Financial: Lessons not learned

First Liberty Financial is running ads on television that take the form of fake news briefs. The top story? According to the ad, the federal government has pushed down interest rates on home loans insured by the Federal Housing Administration to all-time lows. This is untrue in both fact and concept. The federal government does not directly control long-term interest rates like those on home loans. The Federal Reserve controls short-term rates, and the Congress controls spending and debt levels; both may affect long-term interest rates, but so can a million other factors. But regardless of what you think about why long-term interest rates move up and down, one thing is true: today, interest rates on home loans are not at their all-time lows. As this graph shows, rates for 30-year mortgages are about half a point above their recent lows. It's a shame, but the cheap mortgage industry seems just as deceptive as ever.

By the way, the Federal Housing Administration, a New Deal program in operation since 1934, only insures about 5 million mortgages in the United States. Though it does set limits on the size of the loans it will insure and the ability of the borrower to pay, it does not set any limits on interest rates.