Advertising, whether it be on the tv, radio, newspaper or online, is a powerful tool for any business to educate the public about their product. Sometimes businesses push the limit, or even downright lie about their product, in the hopes of getting more people to buy it. However, the Federal Trade Commission (FTC) has the American consumer’s back, as false advertising is an illegal activity, the FTC makes sure all American businesses adhere to these truth-in-advertising laws.
If a business is found to be guilty of bamboozling the public, then the FTC files actions in federal district court ordering the business to immediately cease and desist, and freezing that company’s assets. The FTC then works with the court to prevent future scams and to get compensation for the fraudster’s victims.
So what qualifies as false advertising?
The FTC pays close attention to anything that adversely affects the American consumer’s health and wallet. Generally, a business is prohibited from making false, misleading, or deceptive claims about a product’s price, quality or purpose. Examples of these three types of false advertising are below:
False: when a company makes an untrue statement about what their product does, how it was made, or its full price.
Example case: popular yogurt brand Dannon was found guilty of false advertising in 2010, when they said their Activia brand yogurt was “scientifically” and “clinically” proven to boost your immune system. Due to lack of scientific and supporting evidence, the judge found these claims to be untrue and ordered Dannon to pay $45 million in a class action settlement.
Misleading: an advertisement that gives a consumer an incorrect understanding of the product.
Example case: in 2009 Olay ran an ad campaign for their Definity eye cream, where they pictured Twiggy, a 60-year old model. By retouching pictures of Twiggy to be wrinkle-free, Olay was found guilty of misleading consumers of the effect the product could achieve. This resulted in the ad later being banned.
Deceptive: this is when an advertisement uses price inflation or fails to disclose pertinent information about the product.
Example case: in 2014, Wal-Mart was found guilty of false advertising, when in a nationwide Coke campaign they offered 12-packs of soda for $3.00 but were really charging customers $3.50. Wal-Mart staff reportedly lied about the reasons for the price-hike, telling customers that their state had a sugar tax. As restitution, Wal-Mart agreed to pay more than $66,000 in fines.
Local laws against false advertising
Although there is no private right of action under the Federal Trade Commission Act, the Colorado Consumer Protection Act §6-1-105 protects Coloradans on a state level. The types of actions Colorado businesses are prohibited from doing include, but are not limited to:
- Mislabeling and selling used products as new.
- Falsely degrading the goods or services of another business.
- Not identifying water or fire-damaged goods.
- Falsifying a product’s source or certification.
- Passing off goods or services as those of another.
- Advertising goods or services without an intent to sell them as advertised.
|If you would like to receive updates on local instances of consumer fraud and false advertising, check out the Colorado Attorney General’s website where you can sign-up to receive tips and alerts.|
What to do about it
Report it. If you would like to report a business for false advertising you may do so through the Colorado Attorney General website. While filing a complaint here won’t resolve your individual problem, it allows the State to record and track complaints, which can lead to possible legal action taken on behalf of the State of Colorado.
Additionally, you can warn other consumers by filing a complaint with the Better Business Bureau.
Hire an attorney. If you have been accused of false advertising then it’s important to seek legal counsel who can advise you on next steps, build evidence that supports your case and represent you in court.
If you wish to seek monetary damages against a business for false advertising in Colorado, then you may wish to consult a false advertising attorney. An attorney can fight on your behalf, make sure the evidence is properly acquired and presented. The attorney will also help identify specific, tailored laws unique to your false advertising claim, such as cases involving automobiles, debt collection, or misrepresentations as to the source or origin of goods or services. Depending on the case, a victim can be awarded three times the actual damages amount, as well as having their attorney fees reimbursed.
Call us now to schedule a free consultation with one of our litigation attorneys.