Types of Deceptive Advertising
There are various types of deceptive advertising:
Bait-and-Switch: This happens when a business advertises a product or service that it will never offer. A firm may be participating in “bait-and-switch” misleading advertising if it makes claims about the price or quality of a product or service but has no plans to sell or furnish that goods or service at a price stated.
Misleading Photos or Illustrations: Images in advertisements can make an item appear more appealing to buyers than it is. Grocery shop chains, for example, may use photo-enhancing software to improve the appearance of food goods to entice people to purchase them.
Price Deception: When a firm employs inaccurate or deceptive pricing in its advertisements for a product or service, this is known as price deception. Companies can also make misleading representations about the price of a product by saying that it is on sale at a price that was never offered for sale.
Unsubstantiated Claims: This happens when a firm claims that its product will provide end-users with certain benefits that have never been proved.
Comparison Inconsistencies: This occurs when a commercial compare one company’s product to a competitor’s product just in areas where it is superior, ignoring the fact that the other product is excellent in other areas. One corporation gains an unfair marketing advantage over others as a result of this.
Product Disparagement and Trademark Infringement: Companies can also be charged with false advertising if they use their marketing to discredit a competitor’s goods. Similarly, it can be considered deceptive advertising if a corporation utilizes another company’s trademark to indicate a relationship.
Determination of Deceptive Advertisement
A typical inquiry follows these steps:
The Federal Trade Commission (FTC) looks at the advertisement from the standpoint of a consumer or someone who sees it regularly. Instead of focusing on specific terms, the FTC examines the ad in its entirety – words, phrases, and images – to assess what message it sends to consumers.
A straightforward claim is made in the commercial. Although the commercial does not explicitly declare that the product prevents colds, a buyer could reasonably deduce that the product prevents colds based on the sentence “kills the bacteria that cause colds.” Advertisers are required by law to produce proof to back up any express or implicit statements that consumers derive from an advertisement.
The FTC looks at what the ad does not mention or omits information leads to a false image of the goods among consumers. If a corporation marketed a collection of novels, the ad would be misleading if it did not mention that customers would receive abbreviated copies of the volumes.
The FTC considers whether the claim is “material,” meaning that it affects a consumer’s choice to buy or use a product.
The FTC investigates to see if the advertiser has enough proof to back up the claims made in the ad. Advertisers must have the documentation before their ads appear under the law.
Penalties Against a Company tor Deceptive Ad
The nature of the violation decides the penalties. Following remedies have been imposed:
Cease and desist orders: Companies must stop airing false commercials or engaging in deceptive practice, obtain confirmation for claims in future advertising, report to FTC staff regularly about the proof they have for claims in new ads, and pay a fine per day per ad if they break the law again.
Civil penalties: Civil penalties can go up to millions of dollars depending on the nature of the infringement. The advertisers make full or partial refunds to all customers who purchased the product.
Corrective advertisement remedies: Advertisers have been forced to run new commercials to rectify errors in previous advertising, educate buyers about false claims in ads, add particular disclaimers in future ads, or offer other information to consumers.
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