With marketing, the goal is always to sell more. We want to emphasize the positives and reduce the importance of the negatives to cast the product we're selling in the best possible light. Everyone does it. However, it is possible to go too far. Crossing the line into false advertising is a great way to find your company subject to a law suit. To help keep you and your company from ending up in a legal battle, this article will introduce you to false advertising and how to steer clear of it.
Any situation in which the ad copy misrepresents a product or service with the intention of deceiving consumers is false advertising. Sometimes this involves outright lies, such as saying a particular competing brand has been linked to cancer or something else terrible. Other times it's the result of leaving out critical information or including only partial information that may lead a consumer to leap to the wrong conclusion. Consumers have a right to know what they are buying, so withholding information is also false advertising.
Sadly, there are many examples of false or misleading advertising out there, some of which manage to skim by the regulators on a technicality. One common scheme is to advertise a fee for a service such as an airplane trip or a cellular phone plan that does not include hidden costs such as 911 fees or airport taxes. Another misleading practice is marking the prices of products such as rope and lace products (similar to those found here), up before reducing them for a liquidation or clearance to make customers think they're getting a better deal than they are.
In Canada and the United States, false advertising is illegal. The onus of ensuring truth in advertising in Canada falls to the Competition Bureau. Assisted by the Competition Act, the Competition Bureau investigates and prosecutes companies accused of false advertising. If caught, you could end up paying hefty fines, having your license to sell commercial real estate revoked, or even be taken to court for prosecution and possible jail time. In the United States, this type of work is the purview of the Federal Trade Commission.
False advertising is extremely annoying to customers who show up at your store or your client's store expecting to buy team building drums for a certain price and then finding that they are unable to do so. If you are a consumer and you feel like you've been scammed, cheated, or lied to by a business, you can register a complaint with the Advertising Standards Council, the Canadian Radio and Television Commission, or Consumer Affairs Canada. In the United States, you would make your report to the FTC or the relevant state bureau.