The Truth About False Advertising
Learn how to recover compensation if you were impacted by a false advertising campaign.
False Ads And Consumer Fraud
False advertising is a broad term, referencing any untrue or misleading information provided by a seller to the public/consumers for the purpose of selling them something, or inducing consumers to visit the seller’s physical or virtual location.
We have significant background addressing false advertising, contract and unfair competition claims. Whether it’s a “bait and switch,” a misrepresentation as to quality or quantity or a fake claim about the “eco-friendliness” of a product, our legal team is on the lookout for new consumer complaints. Although these claims are common, read on to better understand the scope of this interesting area.
Bait and Switch Schemes
“Bait and Switch” has become a term in everyday conversation but its roots are in commerce. Specifically, a bait and switch is a for-profit scheme whereby a product or service is advertised at a low price, but with no intention of honoring that price. In other situations, the advertised deal exists, but the product/service is inferior in terms of quality or specifications, and the prospective buyer is then presented with an upsell. These are forms of retail sales fraud and are, in many jurisdictions, illegal.
Common bait and switch schemes include:
- Too-good-to-be-true deals, claims of limited quantity available, and overly-complicated fine print or disclaimers.
- Teaser interest rates, in the case of a mortgage, loan, or investment product. In a mortgage bait and switch, an agent or company will post exceedingly low mortgage rates, knowing full well that the vast majority of applicants will be unable to qualify for these teaser rates. Once customers begin to come into the office to inquire about the low rate, the agent will proceed to offer them the higher rates they are more likely to qualify for, thus earning a greater commission.
- In auto purchase financing, buyers may be lured by the possibility of a car loan with a rate as low as 0%. In reality, very few people (if any) will qualify for such a rate.
- Hotels offer low teaser rates to attract guests who are later hit with hidden resort fees or other unexpected, minimally disclosed fees.
- Headhunters may post attractive yet fake jobs in an attempt to collect resumes.
Bait and switch scams can be difficult to spot, but if something looks or sounds to good to be true, that should be a red flag. An image of a brand new car for sale or a luxury apartment for rent but with rock-bottom prices attached are probably misleading. If a seller comments that a product is in limited supply or out of stock, that’s another warning that you probably won’t get what’s being offered. Confusing fine print or other terms and conditions can also be a sign of trouble.
In general, if a seller is reluctant or unwilling to disclose information if you ask (e.g., to send more pictures of the product, specifications, details, etc.) it could be because they do not actually have that product around. Thus, one way to avoid a bait and switch is to ask for more information and more photographs (if online). Also, be sure to get an offer of the deal in writing so that you can prove that you thought you were getting one thing and not the other. Always read the terms and conditions and fine print to see if anything strikes you as misleading.
Bait and switch tactics are often violations of the Consumer Fraud and Deceptive Business Practices Act or Section 5 of the FTC Act and Section 43 of the Lanham Act. If you suspect a bait and switch situation, contact us, free and in total confidence, to discovery what you can do and how you can collect.
False Representations
False advertising can be defined as any untrue or misleading information provided by a seller to the public/consumers for the purpose of selling them something, or inducing consumers to visit the seller’s physical or virtual location. It includes radio, television, or internet ads that are misleading or false. Federal laws (and many state laws) mandate that advertisements be honest and that all claims made in them be based on scientific evidence. Truth-in-advertising laws cover a broad range of products, from medicines to automobiles, require that all claims be based on scientific evidence and apply regardless of whether the ads were made via radio, television, print media or internet ads.
Such claims also typically give rise to unfair competition claims, yet another avenue for you to collect if you were subject to a false advertising scheme. Unfair competition can concern virtually any activity performed with the intent of damaging free commerce. Common examples are businesses selling products for below their own cost, price fixing or “tying” practices whereby a business agrees to sell a desired product only if the buyer purchases another, otherwise unwanted product. Unfair competition is illegal under various California state and federal laws and can carry heavy penalties. It may also, in some situations, be a crime.
In addition to bait and switch and greenwashing campaigns, common examples of false advertising include:
- Misrepresentations as to Quality – Advertising that a product can perform in a particular way when it clearly cannot.
- Misrepresentations as to Quantity – Advertising a product at a discounted price while knowingly under-stocking it. The law requires sellers to stock enough of an advertised item to meet reasonable customer demand. Another version is when fillers or oversized packaging are used to convince consumers they are receiving a larger quantity of the item than they are.
- Characteristics Misrepresentations – Manipulating the measurement units for a product (e.g., 4K versus 1080p television graphics) may be illegal. Food labels are common places for false advertising when claiming products are “non-fat” (for example, when they never had fat in them to begin with), or “all natural” (yet contain synthetic chemicals).
- Failure to Disclose – It is considered false advertising if a company fails to disclose a material fact about a product. Use of hidden fees is an analogous example, whereby a company will advertise a certain price for its services (e.g. “only $10.99 a month”), but no consumer actually gets that price because there are hidden fees that the company makes everyone pay (e.g., equipment or maintenance fees).
- Price Deception – A common type of auto dealer fraud is giving misleading or incorrect information about a product’s price. For example, if an auto dealer neglects to tell you that the price advertised is after the down-payment, the ad would be deceptive. In California, used car dealers that sell a vehicle for any amount over the advertised price violate the Vehicle Code.
- High-Pressure Sales Tactics – Using forceful tactics to get a consumer to buy a product that they do not want or need.
- Deceptive Form Contracts – These usually have deceptive language in the fine print.
You Can Sue a Company for Misrepresentation.
Virtually every state has laws against false advertising, which provide remedies to consumers and competitors who have been victimized. For example, many states around the country have adopted the Uniform Deceptive Trade Practices Act (UDTPA), which bars misrepresentation, product disparagement, bait-and-switch advertising, and other forms of deceptive advertising. California also maintains an Unfair Competition Law which prohibits “any unlawful, unfair, or fraudulent business act, a False Advertising Law which prohibits any company or individual from making false statements or statements likely to mislead consumers about the nature a product or service, and a Consumers Legal Remedies Act which prohibits a number of unfair marketing practices, including misleading labels, vagueness, and outright deception.
If you purchased goods or services and believe you got something less than that for which you bargained, contact us for a free consultation to get your money back, perhaps even attorneys’ fees, other penalties and punitive damages.
Greenwashing
Greenwashing” is the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly. The term is a play on the term “whitewashing,” which means using misleading information to gloss over bad behavior.
Companies involved in greenwashing behavior might make claims that their products are from recycled materials or have energy-saving benefits. Indeed, while some of the environmental claims might be all or partly true, companies engaged in greenwashing typically exaggerate their claims or the benefits in an attempt to mislead consumers.
Examples of Greenwashing include:
- A plastic package containing a new shower curtain is labeled “recyclable.” It is not clear whether the package or the shower curtain is recyclable. In either case, the label is deceptive if any part of the package or its contents, other than minor components, cannot be recycled.
- An area rug is labeled “50% more recycled content than before.” The manufacturer increased the recycled content from 2% to 3%. Although technically true, the message conveys the false impression that the rug contains a significant amount of recycled fiber.
- A trash bag is labeled “recyclable.” Trash bags are not ordinarily separated from other trash at the landfill or incinerator, so they are highly unlikely to be used again for any purpose.
If you have seen examples of greenwashing, contact us to discuss the claim.