Deceptive Advertising Overview

Deceptive Advertising Definition

Deceptive advertising refers to the use of confusing or untrue statements by advertisers in an attempt to mislead the consumer. It is also known as false advertising. Advertising and consumer law function to protect the consumer and promote truth in advertising.

Truth in labeling is a concept in advertising and consumer law that mandates that all important information that a consumer should reasonably be aware of will be printed on the label of a product. This will ensure that consumers are well aware of the product they are purchasing and reduces consumer manipulation by advertisers and manufacturers.

There are several ways that businesses will use deceptive advertising, including: hidden fees and surcharges, bait and switch, misleading sales advertisements, and manipulation of the standards. Manufacturers may attempt to use vague language in order to confuse a consumer.

Bait-And-Switch Advertising

The bait and switch is a type of fraudulent advertising where advertisers will lure in a customer with the bait and then switch the deal so that the consumer ends up purchasing a higher priced item. A manufacturer may bait someone with the promise of a product at a very low price.

Once the customer is hooked, the manufacturer will change the arrangement by claiming the product is no longer available at that price. The idea is that the seller has already drawn in the customer, so there is little chance that he or she will lose the customer even when the deal is changed.

Consumer law allows for customers who have been a victim of the bait and switch to take action against the advertiser in court. If it is proven that the defendant has engaged in fraudulent advertising, then the plaintiff can be awarded damages. The bait and switch is considered to be false advertising because the manufacturer actually has no intention of selling the given item at the advertised price.

Online Deceptive Advertising

Deceptive advertising is a practice that has been ongoing for centuries. However, with technological advances, such as the Internet, online deceptive advertising has become more and more prevalent. Radio, television, and online advertising have become the major outlets for manufacturers to promote their products.

There are three main types of fraudulent online advertising: blatant misstatement of the facts, hidden fees and surcharges, and false claim-belief interaction. Claim-belief interaction occurs when an advertiser's misleading claim results in an untrue assumption by the consumer.

Many claims of online advertising fraud relate to privacy protection. When a consumer makes an online purchase with a credit card, this information will not always be kept confidential. Also, many Internet sites will make claims of false investments or ways that an individual can make money by working at home. Many of these claims prove to be false.

FTC Regulations Against Deception

The Federal Trade Commission (FTC), established in 1914, is tasked with protecting the rights of consumers. The FTC will create and enforce legislation that governs commercial practices. One division of the FTC, the Bureau of Consumer Protection, is most responsible for protecting the privacy of consumers and prohibiting deceptive advertising practices.

The National Do Not Call List is a major piece of legislation developed by the FTC that protects consumer privacy against telemarketing phone calls. A citizen may call the phone number for the Do Not Call List and request to be added to the list. After a period of 31 days, telemarketing companies will no longer be able to call the phone numbers on this list. Once registered, the phone number will become permanently restricted from telemarketers. However, a consumer may still continue to receive calls from political organizations, charities, and businesses with which they have a previous relationship.

Telemarketing & Electronic Advertising

Telemarketing is a business practice where businesses will attempt to solicit consumers through telephone calls to their home and places of business. These phone calls may be made by a telemarketer or a pre-recorded advertisement that will be replayed through automatic dialing. This automatic dialing system is often referred to as "robocalling" and is most associated with political advertisements.

Telemarketing is considered controversial because many people view these phone calls as an interference of their personal privacy. This is why the FTC has begun regulating the practices of telemarketers by establishing the National Do Not Call List.

Telemarketers will receive peoples' telephone numbers from registries, previous purchase histories, or they may purchase them from other companies' databases. Electronic advertising has been increasing in popularity over the years and allows businesses to reach target consumers with more accuracy.

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