{"id":210744,"date":"2024-08-15T14:30:00","date_gmt":"2024-08-15T14:30:00","guid":{"rendered":"https:\/\/icrowdnewswire.com\/?p=3080837"},"modified":"2024-08-15T14:30:00","modified_gmt":"2024-08-15T14:30:00","slug":"national-advertising-division-finds-certain-claims-for-online-corporate-formation-services-supported-recommends-legalzoom-modify-or-discontinue-others","status":"publish","type":"post","link":"https:\/\/ipsnews.net\/business\/2024\/08\/15\/national-advertising-division-finds-certain-claims-for-online-corporate-formation-services-supported-recommends-legalzoom-modify-or-discontinue-others\/","title":{"rendered":"National Advertising Division Finds Certain Claims for Online Corporate Formation Services Supported; Recommends LegalZoom Modify or Discontinue Others"},"content":{"rendered":"

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New York, NY \u2013 August 15, 2024 \u2013<\/em> In a challenge brought by ZenBusiness, Inc., BBB National Programs\u2019 National Advertising Division determined that LegalZoom, Inc. provided a reasonable basis for certain claims regarding its online corporate formation services but recommended that it discontinue or modify others.<\/p>\n

Superiority Claims<\/strong><\/p>\n

ZenBusiness challenged several iterations of social media ad and sponsored search ad claims stating that LegalZoom is the \u201c#1 Choice\u201d for online small business formation and is \u201c#1 Rated\/Voted\u201d by small businesses.<\/p>\n

The National Advertising Division (NAD) determined that the three surveys relied on by LegalZoom as evidence were not a good fit for supporting the claims and recommended they be discontinued. NAD noted that its decision does not prevent LegalZoom from relying on the surveys for different, supported claims.<\/p>\n

Best LLC Claim<\/strong><\/p>\n

NAD found that LegalZoom\u2019s \u201cBest LLC Service\u201d claim, which appeared in a sponsored search ad, is puffery and does not require support. NAD noted that, in context, the claim is used as a vague statement of corporate pride without conveying a message that LegalZoom has been measured to be the \u201cbest\u201d in a quantified, objectifiable way.<\/p>\n

Price Savings Claims<\/strong><\/p>\n

LegalZoom\u2019s website features a direct comparison of its business formation services to those offered by ZenBusiness. NAD found the claims that ZenBusiness is \u201cup to 20% more expensive than LegalZoom\u201d and that customers who use LegalZoom\u2019s business formation services \u201ccan save up to $39\u201d compared to ZenBusiness were substantiated. However, NAD recommended that LegalZoom modify its comparison chart to accurately indicate that ZenBusiness offers a website builder free for one month with its starter package.<\/p>\n

NAD also found that LegalZoom\u2019s proposed modification to its comparison chart to clearly and conspicuously identify both companies as offering compliance services (included by ZenBusiness for the first year) would not mislead consumers about the compliance offerings of each competitor.<\/p>\n

Disclosure of Affiliate Relationship<\/strong><\/p>\n

LegalZoom\u2019s website features a box with the language \u201cas seen in\u201d followed by the logos of Forbes, Mashable, The New York Times, CNBC, and The Today Show. NAD recommended that if LegalZoom has a material connection, including an affiliate relationship with the publications and media outlets featured in its \u201cas seen in\u201d advertisement, that material connection should be clearly and conspicuously disclosed on LegalZoom\u2019s website.<\/p>\n

On another part of its website, LegalZoom touts its relationship with its business partners stating in large black font \u201cBuild a successful business with help from our partners\u201d followed by the statement \u201cWhether you\u2019re just starting out or looking to scale your business, our partners have solutions and special offers.\u201d Below the text, six partner logos are featured, which NAD found clearly and conspicuously discloses the commercial relationship between LegalZoom and its partners.<\/p>\n

Consumer Purchase Flows<\/strong><\/p>\n

NAD reviewed two challenged portions of LegalZoom\u2019s LLC purchase flow and recommended that LegalZoom:<\/p>\n