Hasbro To Pay $280,000 To Settle FTC Charges of Deceptive Toy Advertising and Prior Order Violations

Hasbro, Inc. has agreed to pay a $280,000 civil penalty to settle Federal Trade Commission charges that the company has engaged in deceptive toy advertising in violation of a 1993 consent order. The FTC alleged in this case that a Hasbro commercial represented that children can operate Hasbro’s “Colorblaster” paint sprayer toy and complete the multi-part stencils that come with it with very little effort. In fact, the FTC alleged, Hasbro used a motorized air compressor during filming to provide the pressure necessary to operate the toy with ease and to achieve the results shown in the commercial. Hasbro’s ad agency, Grey Advertising, Inc., also has agreed to settle FTC charges in connection with its role in the Colorblaster commercial.

A second settlement with Grey Advertising, Inc. announced by the FTC today resolves charges over that firm’s role in a commercial for The Dannon Company’s “Pure Indulgence” frozen yogurt. The commercial falsely implied that some of the flavors in the Pure Indulgence line were low in fat and calories, and lower in fat than ice cream, the FTC charged. (The FTC’s settlement with Dannon over the commercial was finalized in March 1996.)

Hasbro is based in Pawtucket, Rhode Island. Grey, the nation’s third largest advertising agency, is based in New York, New York.

The FTC alleged that this is the third time Hasbro has been charged with misrepresenting the performance of a toy. In 1993, Hasbro paid a $175,000 civil penalty to settle charges over its “G.I. Joe Battle Copter” and “Eco-Warrior” toy advertising. In 1978, Hasbro paid a $40,000 civil penalty to settle charges over its allegedly deceptive advertising for “Digger Dog” and “Bulletman” toys.

The Colorblaster Design Toy consists of a drawing tray with an oblong plastic air tank underneath. A handle on top of the tray is attached to a pump and is used to manually pressurize the air tank. The toy comes with several sets of stencils, blank paper, and four pens. In order to paint, the user inserts a pen into a sprayer connected to a hose attached to the air tank and then pumps the handle before spraying. Contrary to the commercial and the toy’s packaging, completing the multi-part stencils in the kit requires “substantial pumping and significant manual effort,” the FTC complaint alleges. Even the instructions inside the package direct children to pump the toy 50 times before spraying. The complaint alleges that this pumping must be repeated numerous times to complete a multi-colored stencil.

“Children who get this toy would find, much to their disappointment, that it just doesn’t work as depicted in the commercial,” said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. “It takes a lot more pumping, and the results are less consistent. A simple comparison of a child using the toy both with and without the air compressor would have put Hasbro and Grey -- and consumers -- on notice that the demonstration was misleading.”

The proposed consent decree Hasbro has signed to settle the FTC charges would require the firm to pay the $280,000 civil penalty to the U.S. Treasury, and prohibit it from using deceptive demonstrations or otherwise misrepresenting the performance of a toy. The proposed consent agreement with Grey regarding the Hasbro advertising contains similar prohibitions.

The proposed consent agreement that Grey has signed to resolve the FTC allegations over the Dannon advertising would prohibit the ad agency from misrepresenting the fat, saturated fat, cholesterol, or calories in any frozen yogurt, frozen sorbet, and most ice cream products.

These settlements contain reporting and recordkeeping requirements that would assist the FTC in monitoring compliance.

The Commission vote to authorize filing of the complaint and proposed consent decree in the Hasbro case was 4-0, with Chairman Robert Pitofsky recused. It was filed on August 6, 1996, by

U.S. Attorney Sheldon Whitehouse, in U.S. District Court for the District of Rhode Island, in Providence. The consent decree must be approved by the court.

The Commission vote to announce the proposed consent agreement with Grey Advertising/Dannon was 5-0, and the vote to announce the proposed consent agreement with Grey Advertising/

Hasbro was 4-0, with Chairman Robert Pitofsky not participating. Both consent agreements will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make them final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

NOTE: A consent decree or consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.

Copies of the documents associated with the Hasbro and Grey cases are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580: 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it happens, call the FTC’s NewsPhone at 202-326-2710. FTC news releases and other documents also are available on the Internet at the FTC’s World Wide Web Site at http://www.ftc.gov

(Hasbro: FTC Docket No. C-3447; Civil Action No. 96-451P )

(Grey: FTC File No. 952 3231)