A Las Vegas broadcast station paid a $115,000 penalty for not disclosing that purported “Special Reports” were actually paid announcements, a serious violation of the FCC’s sponsorship identification rule.

In 2009, the station produced and broadcast so-called “Special Reports” on liquidation sales at local car dealerships.  The commercials featured a station employee posing as a journalist and broadcasting from the dealership.  The “journalist” interviewed the car dealership’s manager on the details of the sales and said she was “reporting on behalf” of the station.  The spots aired adjacent to the weekend news and featured the headline “Special Reports.”  No sponsor identification announcement or other disclosure indicting that the spots were paid for by the car dealerships was provided.

Section 317 of the Communications Act, requires broadcasters to disclose to their viewers if they have aired matter in exchange for money, services or other valuable consideration.  In this case, the station’s failure to identify the sponsor of the material was compounded by its presentation of the advertisement in the guise of a special news report.  Broadcasters should make sure to disclose the sponsor of any paid programming if it is not readily apparent that  the program is a paid advertisement.

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