What Is False Advertising? All You Need To Know

False Advertising is a crime. It is illegal for a business of any type or size to knowingly publish an ad that is false or contains untrue, misleading, or otherwise deceptive statements or claims.

Misleading or deceptive advertising is when a business makes claims or representations that are likely to create a false impression in consumers as to the price, value, or quality of goods or services on offer. This is against the law.

In this article, we’ll explain what false advertising is and every other thing you need to know about it.

What Is False Advertising?

False advertising is just what it sounds like: a promotion or advertisement that contains claims that are untrue or materially falsely misleading.

Merriam-webster defines false advertising as the crime or tort of publishing, broadcasting, or otherwise publicly distributing an advertisement that contains an untrue, misleading, or deceptive representation or statement which was made knowingly or recklessly and with the intent to promote the sale of property, goods, or services to the public

The regulation is as follows: Although you are free to state opinions, such as “Best Bagels in Town!” Making cldemonstrably untrue claimssuch as “Voted the Best Bagel by the New York Bagel Association,” is prohibited.

What’s the distinction? A subjective claim is just an opinion, but an objective claim may be independently verified.

Here’s another great example; Advertising “50% off!” when the sale is only 10 percent off is false advertising. Saying you have the best sale out there is an opinion, and as such, is permissible.

Is False Advertising Illegal?

False advertising is regarded as a crime. Any firm, whether a sole proprietorship, a small business, a large corporation, or a non-profit, is prohibited from knowingly running an inaccurate advertisement or making false, misleading, or otherwise deceptive claims. These claims are regulated by regulatory organizations, federal and state laws, and other legislation.

Actually, there is such a thing as truth in advertising.

Types Of False Advertising

While advertising is meant to put the best message of a product, most ads do come off as exaggerated all in a bid to sound irresistible to the consumer.

For an ideal business owner, the trick is that there is a fine line (or should be) between what is called the “mere puffery” that we all expect in an ad versus making claims that are downright false or misleading.

Here are the most common types of false advertising:

1. Bait and Switch

Wikipedia refers to Bait-and-switch as a deceptive advertising or marketing tactic generally used to lure customers into the store.

A good example is when a business advertises something at an incredible price but which, in reality, it has no intention of selling for that price.

In most cases, when the customer gets to the store, they are told that the store is “sold out” or the particular item that was advertised is no longer available with a promise to find an alternative product.

Regardless of the trick, the idea is that the marketer will draw a potential consumer in with the bait—the extremely low price or the difficult-to-find item—and then the salesmen will encourage a switch to a less difficult-to-find or non-sale item.

2. Not Really on Sale

An item that is described as being “on-sale” must truly be on sale, which requires that it was previously purchased for more money within the preceding three months. A thing that is constantly discounted is not discounted.

3. Deceptive Pictures

The use of deceptive pictures otherwise known as photo manipulation to give a false impression passes as a type of false advertising. Before you advertise a product, make sure that the picture advertised is no different from the product in stock.

4. Deceptive Food Labeling

You cannot say anything is “100% organic” when it is actually not organic, or that your product or dietary supplement is something it is not. Notably, such labeling may land a business in trouble with the Food and Drug Administration (FDA). The Federal Food, Drug, and Cosmetic Act (FFDCA) specifically mandate candor and transparency on food labels and in pharmaceutical ads.

5. False or Dishonest Claims

False implies falseness. It is deceptive and against the law to claim that your organic almond bar “contains no sugar” when it actually does.

Disclaimers aside, the product or service must be competent to do what the ad says it can do. A “miracle car wax” that claims it can remove paint scratches must be able to remove paint scratches, not just cover them up or make them dull.

6. Incomplete comparison

Better and best both imply that one thing is in some way superior to the other. Best implies that one thing is in some way superior to all others. Nevertheless, when comparing products, advertising usually forgets to mention the criteria used (price, size, quality, etc.) and, in the case of “better,” what the product is being compared to (a rival product, a previous iteration of their product, or nothing at all).

Without a definition of how they are being used, “better” and “best” lose all of their significance. If a commercial says, “Our cold medicine is better,” it might be suggesting that it is superior to taking nothing at all. Another frequently observed example is “better than the leading brand,” which frequently includes a statistic but leaves the leading brand unspecified.

False Advertising Examples

Here are examples of companies that were found guilty of false advertising as stated on examples.yourdictionary.com:

Activia yogurt – Dannon stated that its yogurt had nutritional benefits other yogurts didn’t. They had to pay $45 million in a class action settlement.
Splenda – Ads say it is made from sugar; but, that is not the case. It is made of highly-processed chemical compounds.
New Balance – One of their sneakers has been sold with claims to help consumers burn calories. No studies confirmed this and the shoe turned out to be an injury hazard.
Taco Bell seasoned beef – It was not really seasoned, but had oat filler. This tricked consumers into thinking it had a higher grade of beef.
Definity eye cream – An Olay ad showed the model Twiggy wrinkle-free and the ads were retouched.
Hyundai and KIA – These companies overstated the horsepower of their vehicles, by as much as 9.6 percent.
Airborne – It claimed to ward off germs to prevent the flu and colds, but no studies backed it up. Airborne had to pay $23.3 million in the class-action lawsuit and $7 million settlement later.
Kashi – The Company claimed their products are All Natural but they are full of synthetic and unnaturally processed ingredients and actually some that are considered hazardous.

Recommended: BRAND BUILDING: A Comprehensive Guide

What Are the Penalties for False Advertising?

In the United States, the federal government regulates advertising through the Federal Trade Commission (FTC) with truth-in-advertising laws and enables private litigation through various statutes, most significantly the Lanham Act (trademark and unfair competition).

The focus is on preventive rather than punishment, reflecting civil law’s goal of redress rather than criminal law’s. The standard punishment is a directive to the advertiser to cease their unlawful behavior or the inclusion of extra information that serves to obliterate possibly false content. Corrective advertising may be required, but unless an advertiser refuses to cease despite being told to, there are no penalties or jail time associated with it.

According to Jeffweiner.com, companies that have been accused of using deceptive advertising practices can be forced to:

Stop running certain advertisements
Stop engaging in deceptive practices
Begin including disclosure statements in their advertising
Pay monetary damages to consumers
Or pay up to $10,000 in fines for each violation
Pay the cost of reasonable attorney’s fees for the other parties

These penalties can be a setback to companies wrongfully accused of false advertising.

How To Make Sure Your Ads Are Legal

To avoid getting your business ads on the wrong side, you need to ensure your advert statements are objectively true. This doesn’t mean you can’t make subjective claims though. For instance, you won’t get in trouble if you say your hamburgers are the best in the world. But you will get in legal trouble if you claim they are “100% beef” but actually contain filler, pork, and soy meal.

Similarly, be sure that all claims about the competition or a competitor’s goods in your advertisements are factually accurate. For instance, as long as the claim “We will beat any competitor’s price!” is accurate, it is acceptable to make it in your advertisement. However, such a claim would not be acceptable if, in fact, you do not match a competitor’s lowest price.

When advertising a product for sale, you need to make sure that the items on sale really are less than the usual price for the past three months and that you have enough of those items in stock to handle the rush. If there are limits, mention the limits in the ad.

Here are our top tips to help you avoid the most common mistakes businesses make in their ads:

1. Don’t omit key information

Always ensure that all relevant information, including significant conditions to an offer, is made clear in the ad itself. These should be stated close, or clearly linked, to the main claim. Significant conditions will vary depending on the circumstances.

2. Make sure your pricing is clear

Pricing should be consistent with the advertised product and include all mandatory fees (such as VAT and booking fees).

3. Don’t exaggerate the capability or performance of a product

Advertising is all about showcasing a product in the best possible way, but avoid making exaggerated claims that could lead to confusion. Exaggerations that are plainly false are permitted as long as they don’t mislead or are unlikely to be taken literally by the average customer.

4. Ensure any qualifications are clear

You can use qualifying text (small print or footnotes) to explain a claim in an advertisement, but you shouldn’t use it to conceal crucial details or in a way that falsely contradicts the claim in the headline. For instance, it sometimes seems counterintuitive to state “X% Off Everything! “* and then add “*Exclusions apply.

5. Have the evidence to back up your claims

Keep in mind that you should have sufficient proof to back up all objective statements or those that may be substantiated objectively before running an advertisement. This is what creates the impression the customer gets from the ad.

The type of claim being made and the product in question will determine the level of proof needed. For some health, aesthetic, or weight-loss claims, rigorous clinical trials may be needed.

6. Be careful of claims in product names

Remember that all ad content, including your company or product names can count as potential claims. If your product name implies an unproven effect or benefit, this could be problematic – even if it appears in a pack shot.

How To Report False Advertising

Broadcasters are responsible for selecting the broadcast material that airs on their stations, including advertisements. The FCC expects broadcasters to be responsible to the community they serve and act with reasonable care to ensure that advertisements aired on their stations are not false or misleading.

If you experience any false advertising, you can reach out to the Federal Trade Commission. The FTC has primary responsibility for determining whether typical advertising is false or misleading, and for taking action against the sponsors of such material. You can file a complaint with the FTC online or call toll-free 1-877-FTC-HELP (1-877-382-4357).

FAQs On False Advertising

What do states do about false advertising?

Almost every state, and many major cities, have a similar organization to safeguard its inhabitants against false and misleading advertisements and unfair trade practices. These agencies have their own set of consumer protection rules fashioned after the FTC Act (FTCA.)

Are dietary ads supplements regulated?

Both the FDA and the FTC regulate claims for dietary supplements. The FDA has a duty to label claims, and the FTC seeks to ensure that claims made in advertising do not deceive consumers

Can you get a refund for false advertising?

If you believe you were unduly coerced into purchasing a product or service you did not desire, you have the legal right to a refund. You were duped into purchasing a product or service.

How do I report false advertising?

The FTC has sole responsibility for determining whether specific advertising is false or misleading, and for taking action against the sponsors of such material. You can file a complaint with the FTC online or call toll-free at 1-877-FTC-HELP (1-877-382-4357).

Conclusion

References

hourly.io – What Is False Advertising?
en.wikipedia.org – False Advertising
ftc.gov – Myths and Half-Truths About Deceptive Advertising

What Is False Advertising? All You Need To Know

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What Is False Advertising?

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