Certificates of Deposit Advertisements
Certificates of Deposit Advertisements
Harold Ackerman v. Royal Bank of Pennsylvania
The case of a bank's advertisements about the rate of return for its certificates of deposit centered on the use of the lexical items in the bank's advertisements and other materials, specifically “interest,” “simple interest,” and “compound interest.” A plaintiff bought CDs in 1983, before the Federal Deposit Insurance Corporation began to require banks to specify the difference between simple and compound interest in their advertisements. Principles of lexical semantics and marking were used to indicate the taxonomic hierarchy of relationships between interest (the unmarked highest node), simple interest, and compound interest (the marked lower nodes), because the latter two can be differentiated from each other and are more morphologically complex while maintaining their relationship with the higher node. Principles of language change also were relevant to this case. Historical records of the use of these terms supported the defense that when the plaintiff purchased the CDs, there was no usage or legal reason for the bank to have indicated what type of interest would be paid. Because “simple interest” was the unmarked form at the time of purchase, synonymous with “interest,” the bank did not engage in deceptive trade practice.
Keywords: advertisements, certificates of deposit, interest, simple interest, compound interest, lexical semantics, marking, taxonomic hierarchy, morphological, language change, deceptive trade practice
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