ADVERTISING COMPLIANCE OVERVIEW Progressive Leasing is subject to applicable Federal and state laws and regulations, and regulatory guidance. This guide includes the disclosures required to comply with certain requirements. These standards along with the Retailer Procedures will help you advertise Progressive in a transparent and compliant manner. LAWS/REGULATIONS AND REGULATORY GUIDANCE Progressive Leasing is subject to state LTO laws, which vary by state. In addition, Progressive Leasing looks to federal regulators, such as the Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (“CFPB”), for guidance on various consumer protection practices. State LTO Laws Most state LTO statutes include advertising requirements, including trigger terms, which are terms that prompt disclosure requirements. Unfair, Deceptive, or Abusive Acts or Practices “UDAP/UDAAP” The FTC and the CFPB prohibit practices that are unfair, deceptive or abusive. CAN-SPAM Act CAN-SPAM sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out penalties for violations. FTC Compliance Guide Telephone Consumer Protection Act “TCPA”” TCPA regulates telemarketing calls, auto-dialed calls, prerecorded calls, and text messages. The TCPA rules require companies that use an auto dialer to transmit texts and calls to consumers’ mobile devices to obtain express consent from such consumers prior to transmission. Phone calls or text messages to customers without proper consent is not allowed. FCC Compliance Guide 4 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 UNIVERSAL FORMAT STANDARDS - APPLIES TO ALL MEDIUMS (TYPES) The following standards apply to all advertising materials, regardless of medium Clear & Conspicuous Disclosures We strive to follow the FTC’s guidance. If the disclosure of information is necessary to prevent an ad from being deceptive, the disclosure must be clear and conspicuous. Disclosure placement does not need to be dominant, but should be easily visible and legible. In some cases, the placement of the disclosure, especially for large items, must be altered to be closer to the eye line of the customer. “Clear and conspicuous” means that a required disclosure is difficult to miss (i.e., easily noticeable); stands out from any accompanying text or other visual elements; is easily noticed, read, and understood; is unavoidable; uses diction and syntax understandable to ordinary consumers. See CFPB Clear and Conspicuous Standard. Required disclosures must be clear and conspicuous To make a disclosure clear and conspicuous, you should place the disclosure as close as possible to the triggering term. • Disclosures must be easily noticed, read and understood. • Disclosures must stand out from accompanying text or visual elements by its: • Size • Contrast • Location See FTC 4 Ps Guidance • Placement - Put disclosures close to the claim they qualify • Proximity - Don’t make users scroll or zoom to see disclosure • Prominence - Make it stand out on the page • Presentation Order - Make it “unavoidable” that consumers see disclosure before they can proceed Unavoidable Disclosures An unavoidable disclosure is placed before the call to action and on the same page as the related marketing claim that requires disclosure. Disclosure Fonts and Colors Clear and conspicuous is a performance standard, not a font size. A disclosure is clear and conspicuous if consumers notice it, read it, and understand it. In other words, there is no one-sizefits-all approach. • Choose a simple font for all disclosures • Do not use typefaces with excessive ornamentation or that are difficult to read • The color of the font should contrast with the background • Light grey disclosures are not clear and conspicuous • Rather than rely on a font size for disclosures, use a ratio as defined by the modular scale • See Modular Scale [modularscale.com] Disclosures may not be in a font smaller than 8 point OR smaller than the ratio calculated. 5 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 Symbol or Markers Disclosures should be close to the claim they modify, not distant from the prominent headline or splashy text designed to draw the consumer in. If you need to include key qualifications or conditions, remember this maxim: What the headline giveth, the footnote cannot taketh away. And don’t think an asterisk will always solve the problem. There’s a reason it’s called an asterisk. See FTC 4 Ps Guidance Language • Disclosures must appear in the language used in the advertisement • Disclosure must be in Spanish if the advertisement is in Spanish • English and Spanish are the only languages allowed to advertise Progressive Leasing • Advertising disclosures must use diction and syntax that is understandable to ordinary consumers • When a representation or sales practice targets a specific audience, “ordinary customer” means a reasonable member of that group Unfair, Deceptive, or Abusive Acts or Practices “UDAP/UDAAP” To avoid UDAP/UDAAP risk, advertising materials must: • Include all relevant information, including information about costs • Be clear and easily understood • Avoid a false sense of urgency • Be honest, accurate, and transparent • Include appropriate disclosures • Keep in mind, disclosures are helpful with providing additional context, but they do not negate misrepresentations and other deceptive practices UNIVERSAL CONTENT STANDARDS - APPLIES TO ALL MEDIUMS (TYPES) The following standards apply to all advertising materials, regardless of medium Nature of the transaction is Lease-to-Own. • “Lease” or “leasing” alone does not properly denote the ownership component of a lease-toown transaction • “No Credit Needed” and “90-day option” are not synonyms for “Lease-to-Own” • Unacceptable replacement for the nature/type of product: • No Credit Needed* (or any variation) • 90-day Purchase Option* (or any variation) *[Note these can be marketing claims, but require proper disclosure - see required disclosures] • The following terms should NEVER be used when referring to Progressive Leasing LTO • Financing • Credit • 90-day Payment Option (correct terminology is “Purchase” not “Payment”) • Same as Cash (or any variation) (except 3-month Purchase Option, but only allowed in California) • No interest • The term “interest” used in any way 6 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 • Pay over time (or any variation that addresses paying over time or payments, but does not indicate the lease-to-own nature of the transaction) • No Credit Check • Origination Fee • Instant Approval (correct terminology is Instant Decision) • OR any other term deemed as a potential misrepresentation by Progressive Leasing Compliance LTO transaction is with Progressive Leasing, not the Retailer • Progressive Leasing is the lease-to-own provider, lessor, etc. • Phrases such as “Powered by Progressive Leasing” are acceptable and encouraged Disambiguate lease-to-own from other financing options • Do not present Progressive as a credit or financing option • Consumer-facing materials should clarify that Progressive offers lease-to-own • If multiple options (e.g. credit card financing and LTO) are on one advertisement, it should be clear that these are different, distinct options Disambiguate Progressive Leasing lease-to-own from LTO providers • Any advertising of Progressive Leasing LTO must state Progressive Leasing • Progressive Leasing LTO advertising must be disambiguated from other LTO Provider(s) • Generic LTO advertising may not state prohibited terms unless the other LTO Provider name is prominent Required advertising disclosure(s) – see required disclosures • The disclosure must be clear and conspicuous • The disclosure must be proximate to the claim • If multiple claims are used, each separate disclosure must be included • The universal disclosure must be present on all materials advertising Progressive Leasing Early Purchase Options/ 90-day Purchase Options – see required disclosures Anytime early purchase options are mentioned, e.g., 90-day purchase option or Early Purchase Options, the steps to exercise the options MUST be in close proximity to the claim (i.e. immediately following the claim). Advertising a Specific Product or Payment Information – see required disclosures Retailer cannot advertise specific products as available for lease-to-own unless required disclosures are present. STANDARDS BY MEDIUM (TYPE) PRINT ADVERTISING All requirements under Universal Format Standards and Universal Content Standards apply. 7 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 INTERACTIVE ELECTRONIC ADVERTISING (INTERNET/SOFTWARE) All requirements under Universal Format Standards and Universal Content Standards apply. In addition: The general principles of advertising law apply online but require more flexibility to meet the ever-changing technology. As an overview, here are some guiding principles from the FTC. As a reference, please see FTC.com Disclosures. Required disclosures must be unavoidable and clear and conspicuous Consider all the various devices and platforms consumers may use to view the ads and disclosures. One-click rule – disclosures Except for below, trigger term disclosures are not allowed to be one-click away. • The one-click rule is allowed for the Universal Disclosure • The one-click rule is allowed for No Credit Needed • The disclosure for No Credit Needed must be Clear and conspicuous and Unavoidable on the initially viewable screen following the click, with no scrolling • Every click or call to action on the banner or advertisement must go to the No Credit Needed disclosure. A click to an application without the disclosure is not allowed • No Credit Needed may not be used to describe the product Scrolling - disclosures • Interactive advertisements should be designed so that scrolling is not necessary to find a required disclosure • When scrolling is necessary, use text or visual cues to encourage consumers to scroll to view the disclosure • Disclosures may not be given in lighter or smaller text at the bottom of an electronic advertisement Hyperlink - disclosures When using a hyperlink to tie to a disclosure: • Make the hyperlink obvious • Label the hyperlink appropriately • Place the hyperlink as close as possible to the relevant information Deceptive Advertising If a disclosure is necessary to prevent an advertisement from being deceptive and it is not possible to make the disclosure clearly and conspicuously, then that ad should not be disseminated. WEBSITES - PROMOTING PROGRESSIVE LTO ONLINE All requirements under Universal Format Standards and Universal Content Standards apply. All requirements under Interactive Electronic Advertising apply. 8 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 In addition: • If advertising Progressive Leasing online, acceptable website page headers are: • “Purchase Options” • “Financing & Lease-to-Own” • The following terms may be not used on any web page to refer to the nature or type of product: • No Credit Needed • 90-day Payment Option • 90-day Purchase Option • Same as Cash (or any variation) (except 3-month Purchase Option, only allowed in California) • No interest • Pay over time To describe the product, use “Lease-to-Own” or “Lease Purchase Plan” in place of the prohibited terms. Banners Banners may link to LTO application. If the banner includes trigger terms, the required disclosure (and proximity) must be present. WEBSITE PRODUCT DETAIL PAGE (PDP) PAGE All requirements under Universal Format Standards and Universal Content Standards apply. All requirements under Interactive Electronic Advertising apply. In addition: See required disclosure Product Detail Page (Website advertisement) Disclosure Hangtag requirement • Any message advertising leasing or lease payments on a product detail page will trigger hang tag requirements • Hyperlink: The hangtag/leasing cost summary must be a clearly labeled hyperlink to a payment estimator one-click away SOCIAL MEDIA All requirements under Universal Format Standards and Universal Content Standards apply. All requirements under Interactive Electronic Advertising apply. VIDEO (INCLUDING TELEVISION & STREAMING VIDEO) All requirements under Universal Format Standards and Universal Content Standards apply. In addition: • Both Visual & Audible disclosure: The disclosure must be presented simultaneously in both the visual and audible portions of the communication, even if the representation is made in only visual or audible • Visual disclosure: by its size, contrast, location, the length of time it appears, and other characteristics, must stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood • Audible disclosure: must be delivered in a volume, speed, and cadence sufficient for ordinary customers to easily hear and understand 9 Progressive Leasing reserves the right change the Advertising Guide for Retailers. All advertising is subject to Progressive Leasing’s approval. 8-2020 RADIO All requirements under Universal Format Standards and Universal Content Standards apply. If a disclosure is triggered, it must be read aloud in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand the disclosure. EMAILS All requirements under Universal Format Standards and Universal Content Standards apply. In addition: Should meet all CAN-SPAM requirements, including: • Disclosure of the sender’s address • Subject lines should not be false or misleading • Clear borders around Progressive messaging and product(s) • Cannot advertise specific products as available for lease-to-own unless required disclosures are present • When the email content is a promotion, the disclosure must clearly explain how the promotion affects the cost of leasing (See Promotional Initial Payment Disclosure) • Make clear whether a promotion is conditional on a lease-to-own or not • All emails should be sent via a controlled communication platforms that honors opt-out choices TEXT MESSAGES Retailers are prohibited from sending advertising texts on behalf of Progressive Leasing. Retailers are prohibited from mentioning Progressive Leasing’ Lease-to-Own in a text. REQUIRED DISCLOSURES Clear and conspicuous disclosures benefit advertisers and consumers. All advertising materials promoting Progressive Leasing must include the universal disclosure and any other relevant disclosures depending on the content of the message. UNIVERSAL DISCLOSURE The universal disclosure must be unavoidable and presented using the clear and conspicuous standards for all materials advertising Progressive Leasing. The universal disclosure should not be the least conspicuous content on the page/advertisement. The advertised service is lease-to-own or a rental- or leasepurchase agreement provided by Prog Leasing, LLC, or its aff iliates. Acquiring ownership by leasing costs more than the retailer’s cash price. Leasing available on select items at participating locations only. Not available in MN, NJ, VT, WI, WY.