What is False Advertising?

False advertising, also known as deceptive advertising, refers to marketing information or content about a product or service that is misleading. It can often lead consumers to purchase counterfeit, defective or even dangerous products. Intellectual property, such as a patent or trademark, does not need to be officially registered to be the subject of a false advertising claim.

Promoting goods under inaccurate claims is illegal according to United States federal law. Additionally, some states have additional laws that regulate advertising and provide a platform for false advertising claims. Depending on the severity of the crime, false advertising can lead to severe legal consequences such as heavy fines or jail time.  Penalties can also include legal damages for losses caused to a consumer, public recall of a product and injunctions to have advertisements removed or replaced.

Key Takeaways

• False or deceptive advertising is the marketing of information or content about a product or service that is misleading and unrealistic.
• U.S. federal law strictly prohibits false advertising.
• Unsubstantiated claims, bait and switch tactics, and green or eco-friendly terms are a few common types of false advertising.

Types of False Advertising Tactics

False advertising can take many shapes and forms. Let’s review some of the most common false and misleading advertising tactics.

• Unsubstantiated Claims: A company should avoid advertising that a product performs a certain way or possesses specific qualities if these claims are untrue. 
• Bait and Switch Tactics: Using bait and switch tactics, a business often delivers a lower quality version of what was originally advertised. Businesses should not market products that they don’t truly intend to deliver.
• Green or Eco-Friendly Terms: Some businesses advertise their products as "green" despite knowing that they are not in fact environmentally friendly. This tactic is also referred to as “greenwashing.”
• Failure to Disclose: If a business does not inform consumers when a product or service is unavailable or expired, they may be faced with a false advertisement claim.
• Deceptive Pricing: An item or service may cost a consumer much more than advertised if hidden fees or surcharges are added. This false advertising tactic is known as “cramming.”

Avoiding False Advertising

Each year, the Federal Trade Commission (FTC) receives a multitude of complaints about false advertising. In order to prevent false or deceptive advertising claims against your company, there are a few tips you may want to keep in mind while advertising your product.

• Be Clear About Pricing: If you are advertising the cost of a product or service, it is important to use accurate numbers to avoid misleading consumers. If you are marketing something as “free,” make sure that you will not be charging any hidden fees.
• Don’t Leave Out Facts: In addition to the inclusion of deceptive information, omitting significant information from an advertisement can lead to a false advertising claim. Consumers should be provided with all of the necessary facts before making a purchase.
• Stock Up: Always make sure there is enough quantities on hand to meet the reasonable demand following the advertisement of a product. If demand is likely to exceed the supply, you may want to state exactly how many units of that product are available in the advertisement.
• Use Disclaimers: Disclaimers can reveal crucial information about a product or service that prevent an advertisement from being considered misleading or deceptive.

Bottom Line

False advertising is a serious crime that is not to be taken lightly. If you need help defending or filing a false advertising claim, call one of our skilled intellectual property lawyers as soon as possible.