Month: March 2016

False Advertising Lawsuits

In a world of half-truths, how will you identify real advertising from deceptive advertising? Promoting your products on diverse media platforms is all about impacting brand awareness and recognition. This is supposed to be the role of advertising in mass media.

With the mushrooming of myriad of businesses online and offline, a lot of customers are lured into superfluous advertising claims that are deceptive or misleading in nature which may create a negative impact on consumers.

Misleading advertising refers to promotional or marketing efforts that deceive people who are exposed to it. This pertains to published material that gives consumers inaccurate information and understanding of the items they want to purchase. This can affect consumer choices specifically on deciding what to buy. It is considered a legal offense whenever a business advertise good or services in a way that attempts to mislead or deceive consumers which may cause damage, loss, or injury to the general public. Here are some examples of false advertising:

  • Prices are misrepresented. For instance, the products are regularly priced but advertised as sale prices.
  • Specifications or features of goods and services are made inaccurate such as a product labeled weighing 1.5kg could just be 1kg in actual weight.
  • Attributes of the advertiser are misleading such as the United States based company declared could actually be based somewhere in Asia.
  • Condition of the products and services are advertised in the effort to lure and deceive people like “free shipping” on items which may actually involve paying for delivery.
  • If they leave out some important factors in the effort to deceive clients and encourage them to buy more such as advertising claims that go bombastic like “80% off everything” when the discount only applies to certain items.
  • Claims that create false impression on clients like “lose weight in 3 days” that can automatically grab the attention of people who want to trim off excess fat and get that perfect silhouette figure.

Certain state and federal laws aim to protect the consumers from false advertising. Deceptive claims are considered illegal by law. No businesses are supposed to freely make misleading, erroneous, deceptive, or false claims about their products and services regarding its price, purpose, and quality.

Consumers may suffer financial losses or damage due to false advertising. The gravity of loss and damages may not be that significant but this is a cost that no consumer should endure.

Types of False Advertising Tactics:

  • Deceptive Form Contracts – Refers to ambiguous or erroneous entries in the contracts that can be easily overlooked by clients.
  • Bait & Switch – This particular tactic involves attracting a consumer into buying a product at a much lower cost; but when the buyer is already at the store, the business tries to push a different kind of product for a different price than what was initially advertised.
  • Failure to Disclose – This pertains to a business concealing or leaving out important information like when a sale offer has already expired or certain products are out of stock.
  • High-Pressure Sales – This is the most aggressive type of false advertising in which the business tries to do hard sell which urges consumers to purchase products that they don’t want or intend to buy in the first place.
  • Artificially Inflating Prices – This tactic gives buyers false impression that a super deal or promotion is certain products or services are available when in fact it is not.

Quite a huge number of false advertising class action lawsuits have been litigated even against the biggest brands in the world in the attempt to recover remuneration for losses or damages incurred.

A class action lawsuit has been filed against Red Bull who have been accused of false advertising with its slogan “Red Bull gives you wings”. This class action lawsuit was filed by several Red Bull drinkers who testified that they have been consuming the product since 2002 but have not seen any significant improvement in their athletic performance. The plaintiff accused Red Bull of false advertising claims when saying that Red Bull gives consumers wings when in fact it doesn’t – literally or figuratively. Red Bull’s defense was that the term “wings” is similar to giving drinkers a boost or some sort of physical enhancement or lift whenever they consume Red Bull.

Red Bull settles this complaint by providing $10 in check form or $15 voucher for Red Bull products for every customer. This could amount to a whopping total of $13 million in loss and damages.

Federal Trade Commission have filed charges against Lumos Labs or the Lumosity brain training program which claims to delay or stave off the effects of Alzheimer disease, dementia, and the like. The program is composed of 40 games at which the company claims that playing these games for at least 10 to 15 minutes per day (3 to 4 times a week) can boost overall performance and help users achieve full potential in all aspects of life. Lumos Labs settled this complaint by agreeing to pay $2 million in damages and that they inform clients about the case and give options to cancel subscription on the training program.

This proves you can’t make claims like you’ve got the best foosball table in the world if you haven’t really got it.

Remedies for false advertising lawsuit include the following:

  • Injunctions on ordering the business to stop engaging in false advertising practices.
  • Injunctions on ordering the business to cancel running the advertisements with false claims.
  • Injunctions which cover ordering businesses to provide disclosure statements in their advertisements.
  • Monetary remunerations or damages.

Although creativity and freedom of expression has paved way to the biggest and most brilliant slogans in advertising history, it still pays to be genuine and honest with advertising claims. Consumers are the lifeline of businesses. They pay for promised results – nothing less.