False advertising is advertising for products or services that misleads consumers, whether the act was deliberate or not.
False advertising is classified as an unfair trade practice, and is thus regulated by the Federal Trade Commission (FTC). Remedies may also be pursued under federal and state laws.
What are Some Examples of False Advertising Practices?
There are a variety of ways in which advertisers can manipulate advertisements in order to mislead consumers. A few of these are:
- Manipulation of Terms: for example, describing foods as “light” without justification for doing so.
- Bait-and-Switch: advertising cheap products to entice customers, then trying to sell them much more expensive items.
- Misleading Illustrations: often of food, misrepresenting portion sizes.
- Incomplete Comparisons or Inconsistent Comparisons: when comparing their goods to other companies’, advertisers are misleading in calling their products “better,” or in comparing only the good points of their products while leaving out detrimental characteristics.
What are the Federal Protections Against False Advertising?
The Federal Trade Commission (FTC) is the main federal agency that monitors false advertising practices. The FTC relies on consumers and competitors to report unlawful advertising. If FTC investigators find that an ad violates the law, there are several ways in which the agency can act:
- They may try to bring the violator into voluntary compliance through informal means;
- The FTC can issue a cease-and-desist order and bring a civil lawsuit on behalf of people who have been harmed;
- The FTC may seek a court injunction to stop a false advertisement; and/or
- The FTC may require an advertiser to run corrective advertisements that state the correct facts and admit that an earlier advertisement was deceptive.
What are the State Protections Against False Advertising?
Many states have enacted statutes that also regulate false advertising and similar issues. In many cases, the states have modeled their statutes after the Federal Trade Commission Act.
These laws allows consumer to sue advertisers for monetary damages they’ve suffered as a result of being victims of the advertisement. Some state laws even provide for criminal penalties if fraud is involved. States also have their own consumer protection agencies.
What is the Lanham Act?
The Lanham Act is the major federal trademark statute in the United States. It prohibits trademark infringement, as well as false advertising. It has been in effect since 1947 and it allows consumers to bring federal lawsuits against advertisers.
How Can I Make Sure My Advertisements Don’t Violate the Law?
Although there is no established, guaranteed formula, there are seven generally accepted rules for legal advertising:
- Be accurate in your representations;
- Get permission from outside sources used in your advertisements;
- Treat competitors fairly;
- Keep sufficient quantities on hand;
- Be careful when using the word "free";
- Be truthful in all claims about pricing; and
- Do not overextend offers of credit.
Do I Need an Attorney?
If you believe you have been the victim of misleading advertising, then you should first contact the consumer protection agency in your state. It’s important to first submit a claim to your local agency and then see if you have recourse to file a separate civil lawsuit.
If you have suffered financial loss or health repercussions as a result of false advertising, then your case may be more serious. If your local agency is unable to help you, then you can consult a business attorney to go over the facts and review possible remedies. It is important to first contact your local agency and keep all important documents relating to your case, so your lawyer will have the best chance to help.