The advertising motto is to make the public aware of a seller’s product prevailing in the market. It encourages the public and inculcates an idea to purchase the product or not. While facing pressure, few companies end up using unethical means of propaganda through false advertisements, which are sometimes found to be deceptive and misleading. Here are some interesting False Advertising Statistics that you would want to be aware of so that you don’t become a victim of one.
False Advertising Statistics – What is it?
A considerable amount is spent on advertising and brand management to make it appealing, with the expectation of drawing the attentive eyes of the consumers to the product. The craving or hunger for attention can take the companies to any extent, where they mislead the consumers or include false interpretations. A notable legal definition of false advertising by the Federal Lanham Act is “Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities.” Here are some statistics for you!
Many companies faced enormous losses for haggling low-quality products using wild claims such as ‘scientifically proven with guaranteed results, etc. A significant difference between lying under oath and withholding the truth is significant in Advertising. And for crossing such lines, companies can face the wrath of a damaged reputation, which can cost them millions.
- Businesses concealing surcharges from consumers via deception is common and is seen in several instances. Airline booking services claiming to buy you tickets at $1000 turn out to exceed when final charges are accounted for. FTC Federal Trade Commission, in this regard, has stated that there may be many causes for such instances of false claims. Products advertised at sale prices often turn out to be not so. Prices of products are often calculated in a misinterpreted way or might have important information kept hidden or exempted.
- The advertisement might claim the business to be associated with a trade association, but factually might turn out to be false. The brand Nivea had to pay a fine of $900,000(U.S.) over a tv commercial that misled consumers by showing a woman using a body lotion that said, “Its regular use can significantly reduce body size.”
- Red Bull was also sued in the year 2014 for using the slogan, “ Red Bull gives you wings’’. The company had to settle with a maximum payment of $13 to every US consumer who had bought the drink since 2002.
Public realms are flooded with statistics due to advertising, via which they contrive their agenda. Unreasonable Statistics in promoting merchandise have been manipulated to create desired effect in selling products. Such practices are no secret to the consumers, who know they are the statistical strategy target. Yet, the availability of consistent engineered data in the electronic media is the gong of the bell that people need to save themselves from falling victim to these marketing ruses.
Conjuring Statistical Value
- A very impressive advertisement of Colgate’s avowal that 80% of dentists recommend its toothpaste looks amusing. Still, the fact that is kept hidden is that the dentists didn’t stick to the endorsement of one brand. This resulted in the banning of the campaign by ASA. What Colgate tried to do was present itself as the market leader. Misappliance of data by brands is also standard practice when companies try to merge correlation and causation.
- Tyler Vigen, a Harvard student, set up the website ‘Spurious Correlations’ in which he intentionally misused statistics to draw eccentric comparisons between margarine consumption and divorce rate. Vigen wanted to prove that distorted reality can be created by correlations between two variables and destroy the credibility of the claims they otherwise support.
Legal Actions for False Advertising
According to The Consumer Protection Act, 2019, any manufacturer or service provider using false or misleading advertisements for commercial gain that turns out prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to 2 years and a penalty. Also, for every subsequent offense, one is punishable with an imprisonment of a term extending to 5 years, and a fine may be levied.
Under Section 43 (a) of the Lanham Act, a claim can be made against a defendant for misleading or false advertising. To have a strong complaint against any defendant for false advertising, the plaintiff must show the mentioned elements:
- Whether a defendant has made false statements about his products or initiated them towards another’s.
- Accurate deception or a tendency to deceive substantial portions of the intended audience.
- Subjected to material deception that is likely to influence purchasing decisions.
- Injury intended to the plaintiff. Although proof of actual injury is not mandatory.
- Advertised goods make rounds in interstate commerce.
You get investigated if your campaign is suspected of being misleading. FTC can take the perspective of a consumer complaint and could investigate the ads to see if it is violating any law. All information will also be evaluated to see if you have left out critical information that needs to be included.
Loss on All Aspects
If you are caught up to be faulty in misleading consumers through your advertisements, you could become a victim of high financial loss. You could end up losing all the money you had invested in developing the ads if you were to pull out your ads forcefully. A fine to be charged is an additional issue for sure. In case you get sued, legal fees are an extra burden, while, in case of losing the case, settlement money will indeed be levied, which will break you.
- When you are charged legally for false advertising, you will lose consumers who will start perceiving you as untrustworthy. Customers you have in line, and the new potential ones will tend to take their business elsewhere. At the same time, your brand may negatively impact the future endeavors of your business prospects.
- The employees who work for you are the front lines, and it’s them who will face the backlash that comes as a disadvantage to false advertising. As they aren’t the ones guilty of creating such deceiving ads and nor are they responsible for endorsing, they are likely to turn their back as they will have to face otherwise unhappy customers and the everyday nuisance that comes naturally with the product malfunction. They will not be happy taking into stride the customer complaints that regularly come once your service fails to deliver what you usually promised. When employees are subjected to such consequences, the turnover of your business is likely to rise, with the majority of them either leaving their job or remaining demotivated to work hard any further.
Bait and Switch
Bait and switch are among the most common practices shady companies use. The game goes like this: a particular product is advertised at some specified offer price. However, when the customer buys that product influenced by the ad, he sees the ‘all sold out’ tag and is offered an alternate but similar product. The customer is convinced and finally buys a lesser product at a higher price.
In this situation, a company with good intentions will offer a rain check for the item when it is available in stock or offer the customer a similar item at the advertised price.
Misleading advertisements are subjected to various provisions incurred into the law, as they tend to play with the interest and rights of consumers by merely providing them with rightful information about a product. The art of disingenuousness is growing daily, and the greedy motive of earning money in an unhealthy procedure is witnessing false or misleading deeds that turn out to be the bitter truth of reality. If such statistics intrigue you, check out the Top Branding and Small Business Statistics now!