The American Express Co., which is in the midst of an advertising dispute with one of its travelers check competitors, has been the subject of a "wide-range investigation" by the Federal Trade Commission for some time, according to agency sources.
The FTC Boston office is handling the investigation, according to Collot Guerard, deputy assistant director of the division of advertising practices.
"It's a non-public investigation," said Lois Pines, regional director for the FTC Boston office. "We've been asked to look into the American Express (advertising) effort and we're doing that." Pines said she would not comment further on the probe.
According to one source the investigation involves more than disparaging advertising, but Pines said she could not comment.
Micahel Lively, president of the American Express travelers cheque division, said he was unaware of the investigation, but "I know the FTC has looked at our advertising before and we've never been rebuked."
Lively said the agency probed its refund claims several years ago. First National City travelers checks, a division of Citicorp of New York, began a newspaper advertising campaign on Thursday against American Express' television commercials which it alleges imply that no other travelers check companies give refunds on lost or stolen travelers checks.
A First National City executive said yesterday that the fight-advertising-with-advertising onslaught will continue next week when more newspaper ads complaining about the comme-cials will be placed.
The new First National City ads will look different than those placed in The Washington Post, New York Times and Wall Street Journal on Thursday, but they'll be "just as tough as the first, if not tougher. They will take the same posture, but they will be more focused on the issues," said Ralph E. McEldowney, senior vice president for Citicorp Services, Inc.
First National City said that the commercials, shown on television since February, imply that travelers will have trouble getting a refund for any travelers checks other than American Express. The commercials depict troubled vacationers who have lost their travelers checks, which are not American Express, and they don't know what to do.
An American Express spokesman said yesterday that in response to complaints by Citicorp and the Thomas Cook travelers check company, American Express agreed on Tuesday to add a line to its commercials saying, "Of course, all traverlers check companies give refunds."
But McEldowney said that damage from the commercials would be done before they could be modified. The added line contrasts the first part of the commercial which allegedly inplies only American Express gives refunds, McEldowney said.
Meanwhile, actor Karl Malden, who narrates the commercials and will speak the additional lines, called Lively yesterday, the executive said.
"He is taking it in good humor." Lively said. "He said he thinks the (First National City) ads are ludicrous."