False advertising misleads the consumer or includes false statements. The legal definition of false advertising from the federal Lanham Act is, "Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities".
Examples of False Advertising
- Hidden fees - These are extra fees not specified in the advertised price, such as activation fees for cell phones or pre-delivery inspection charges on a new car.
- "Going out of business" sales - This entails raising the prices from merchandise that was already on sale and then marking them down.
- Misusing the word "free" - When the sale is "Buy one. Get one free," the second item is not really free because you have to buy the first one.
- Changing the measurement units and standards - An example is changing from pounds and ounces to metric to hide the fact that the product was downsized.
- Fillers - Food often has fillers to increase its weight, like meat injected with broth or brine.
- Misuse of terms - This includes the terms "light" and "natural"
- Incomplete comparison - An example is saying a product is better than another but not explaining in what way it is better.
- Inconsistent comparison - This includes comparing a product to only the competitors it can beat.
- Misleading illustrations - An example is showing the product in a picture as being bigger than it actually is.
- Coloring - This would include putting yellow oranges in a red mesh bag to make them appear riper than they are.
- Angel dusting - This is adding a very small amount of something beneficial so it can be labeled as such, like a cereal that contains 10 essential vitamins and the actual amount of them is less than one percent of the Recommended Dietary Allowance.
- Bait and switch - This is advertising one product and substituting a similar product at a higher price, claiming the advertised product is unavailable or sold out.
- Acceptance by default - This refers to a contract where the consumer must opt out of a service or feature and if they don’t, they will be charged for it.
Companies Found Guilty of False Advertising
Here are examples of companies that were found guilty of false advertising:
- 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, 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.
Advertising, when used correctly, can be an effective way to promote and sell products. It can provide consumers with the information they need to make a smart shopping decision. However, false advertising is harmful to both the consumer and to the advertiser.