There are two goals of false advertising lawsuits:
First, we force companies to change/modify their business practices.
Second, we seek compensation for consumers.
About false advertising
False advertising occurs when a false or misleading claim about a product or service is made in an effort to persuade consumers to purchase it.
When directed toward large audiences or when it’s taken place over a long period of time, these marketing practices and representations can have a major economic impact.
In addition to impacting consumers, these claims can also affect business competitors who are engaging in honest promotional efforts.
Despite the fact that both the Federal and State laws are clearly written, the firm continues to handle increasing numbers of false advertising cases every year.
Common examples of deceptive pricing strategies
When it comes to advertising the price of a product, it’s common to see the following misleading behaviours:
- Double ticketing—Happens when a seller puts two or more prices on a product or service, and the consumer is charged the higher price.
- Pyramid selling – A complex multilevel marketing plan that benefits few and preys on many.
- Bait and switch—Happens when a seller attracts customers by advertising a bargain price for a certain product or service that they don’t have in reasonable quantities. They then persuade the customer to purchase more expensive items.
It’s not just about what they say
False or misleading advertisements also come in the form of what they don’t say.
When important information is intentionally omitted from the consumer, the company responsible may be sued for failure to disclose.
Directly stated or omitted, misleading advertisements can take many forms. It may appear:
- In print
- With any advertising media
How to prove liability
In legal terms, a company or person may be liable if the following can be proven:
- How the advertising was false or misleading
- That it is material (the company is guilty of lying about something important)
- The consumer saw it and relied on it when purchasing the product or service
- In addition to relying on it to purchase the product, the consumer actually paid more for it
Why take action?
The first goal of these lawsuits is to force companies to change/modify their business practices and secondly, to seek compensation for consumers. Therefore, successful resolution in a case can result in:
- Court orders that stop businesses that use these practices
- Court orders that require the business to include disclosure statements in their advertising moving forward