False advertising

Encyclopedia : F : FA : FAL : False advertising

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False advertising (or more mildly, deceptive advertising) is an act of deliberately misleading a potential client about a product, service or a company in general by reporting false or misrepresenting information or data in advertising or other promotional materials. False advertising is a type of fraud.

False advertising is often a crime. In some countries advertising practices (including "truth in advertising") are regulated by a government authority (FTC in the USA), in others the advertising industry is self-regulated and professional associations combat false advertising.

To decrease their legal liability for false advertising, many companies cover their tracks using small print.

Methods used in false advertising

Rebates

Rebates were originally intended to pass savings directly from the manufacturer to the consumer. However in the U.S. they have become probably the biggest way to trick shoppers into paying more than the advertised price. Stores advertise a "sale" price and note only in the fine print that it is not the price at which it is actually sold for, but instead an "after rebate" price, which also fails to include sales tax. Many rebate fulfillment companies have gone to great lengths to make sure that consumers never get their rebates, and are then stuck with an unreturnable product.

Going out of business/bankruptcy sales

By utilizing advertisement with titles such as "Going out of business", "Closing store", "Liquidation sale" or "Bankruptcy sale" a message of urgency and "dumped" prices is conveyed - where in reality the business has no plans on closing its store or going out of business. Some cities in the U.S. now require permits for these types of advertisements to combat the false advertising. A few stores have done a "going out for business" sale.

False price comparison

By comparing a sale price to a "regular" price for the same product, advertisers can inflate the "regular" price in order to create the impression that the sale price is very low. The intent is to mislead consumers into thinking that they are saving money by purchasing the "on-sale" item or service. Some clothing stores in particular have essentially every item on sale, and some grocery stores advertise "e savings" over their (unreasonable) regular prices for those using loyalty cards.

Perpetual \"sales\"

Another closely-related trick is the "sale" which becomes more or less permanent, though the actual percent off may fluctuate, or even briefly go back to the inflated regular price. In the U.S. this is often seen in craft and home décor stores such as Michaels and JoAnn, and to a lesser extent Hobby Lobby and Garden Ridge. Because these stores carry a high proportion of seasonal merchandise (Christmas, Halloween, summer, etc.), those products are constantly on sale from the time it is all stocked on the salesfloor until the time it is all gone at closeout.

Misrepresentations

Utilizing words such as descriptive terms or location terms to increase the perceived value of a product. An example would be advertising "Maine Lobsters" when in fact the lobster is from the Pacific ocean.

Meaningless terms

Manufacturers and sellers often use terms that sound advanced or deluxe to the average consumer, but really mean nothing at all. The most-abused term of the 2000s is "digital", often applied to things which are not digital in any way. Headphones are often labeled as "digital" or "digital ready", when in fact they are inherently and entirely analog. The term has also been applied to amplified radio antennas used to receive over-the-air television, even though digital TV signals are radio waves just as with analog TV.

Buy x, get y free

This type of false advertising concludes that more is better. By increasing the price of a firecracker, for example, to five times its original marginal profit-based price, a 5-for-1 "special" sale is offered while still keeping the same profit line. In other cases the free product is of lower quality than the originally-purchased item.

Often, buy-one-get-one "deals" are simply an excuse to use the word "FREE" in advertising. The item may simply be "50% off" or "half price", or the shopper may actually be forced to buy at least two, or even in multiples of two.

Bait and switch

An offering of a service or product at a very low price with no intention to sell said service or product as advertised. This is accomplished by lowering standards on the advertised product -- such as guarantees, credit terms, quality either verbally or actual degrade in standards. Another method is to offer a "limited quantity" deal. Once the consumer is lead up to this point, sales personnel will try and coax a consumer to purchase the more expensive, real product.

False labelling

The use of labels with statements concerning quality, identity, quantity, manufacture or origin that are misrepresented or false. Another method of false labelling is hiding or destroying a label indicating the product's origin (e.g. "Made in Taiwan" or "Made in Botswana").

For foods, the expiry date may be changed, which in meats can cause dangerous levels of salmonella or other bacteria to grow. For other foods, they may simply become stale while still being safe to eat.

Other offenses include failing to notify consumers of something they have the right to know, such as whether the food is genetically engineered, or whether meats have been treated with carbon monoxide in order to displace the oxygen which causes browning of raw beef.

Branding

Many well-known companies simply rent their names out to other lesser-known companies. This misleads the consumer to believe that he or she is getting a quality product, which will be backed-up by the company, when in reality this may not be the case. General Electric, for example, no longer makes its own Christmas lights, and never made USB hubs at all, though its logo appears on both.

Fillers and oversized packaging

Some products are sold with fillers, which increase the legal weight of the product with something that costs the producer very little compared to what the consumer thinks what he or she is buying. Food is an example of this, where chicken meat is injected with broth or even brine, or TV dinners are filled with gravy or other sauce instead of meat.

In other cases, packages are under-filled, simply leaving empty space at the top, in products such as coffee cans which cannot be seen into until being purchased and opened at home. Particularly deceptive is when the same size of packaging is used for less product than it used to. This deceives consumers into continuing to buy the product, which they expect to have the same amount it always has. To evade legal problems, the label is changed to reflect the actual new amount, but this is essentially fine print which anyone is unlikely to notice.

A similar problem in Christmas lights and other light strings is that the length of each set seems to get shorter each year, despite containing the same number of lights. The length of the set is given in small print while the number of lights is in large print.

Units of sale and pricing

Another trick is to make the unit of pricing smaller than the unit of sale. One example is airlines, where a one-way price is quoted, even though it is impossible to get a one-way ticket for that price, and the flyer is instead forced to pay for a two-way ticket. Similarly, loudspeakers are often quoted as single units, even though the buyer is forced to buy two.

In grocery stores, Kroger (and potentially others) advertise box of cookies for ten cents, using a giant fluorescent red-orange sticker. However, under the enormous "10¢", there is tiny fine print, less than the size of the large "1", which says "per cookie". This is further reinforced by the fact that the box is clear plastic, allowing the shopper to actually see the cookies.

False credentials

An advertiser may have a false "expert" testify that a product is genuine and effective, when in fact it is not. An example of this practice is having actors dressed as doctors or wearing lab coats - lulling potential buyers into believing that the product is backed by the faith of knowledgable experts. Another example of this is scripted witness testimony. An actor is hired to claim that they were satisfied by a product or service, when in fact they never used it. A buyer may interpret the statement to mean that if the other 'customer' was satisfied, then they will be too.

Non-sale advertisements

Some stores will send out ads which show products that are not even on sale at all. Since the great majority of advertising is for sales, this often misleads the consumer into thinking that the items are st a special price, when in fact they are not. Wal-Mart and others are known for engaging in this, especially during the Christmas rush.

Outlet stores

While outlet stores originally gained a reputation for carrying irregulars and overstocks and very low prices, in more recent years they have just become regular shopping malls with prices that are little if any lower than regular stores.

Real-estate fraud

Although creative wording and other creative footwork can make a tenement sound like a charming house, there are some points that can be considered real estate fraud. Listing a new condo building that has been open for 4 years as "brand new" is fradulent and in some states in the United States can be grounds for ethics charges from the realty board or state regulatory board.

See also

• advertising hoax

External links

• [Office of the State Attorney, Sixth Judicial Circuit of Florida - Consumer Protection & False Advertising]
• [Federal Trade Commision - Advertising and Marketing on the Internet: Rules of the Road]
• [Federal Trade Commision - General Advertising Policies]

 

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