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Encyclopedia > False advertising

False advertising is the use of deliberately false statements or deception in advertising, in order to gain a commercial advantage. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. Image File history File links Broom_icon. ... Image File history File links Gnome-globe. ... Commercialism redirects here. ...

Contents

False advertising regulations in the United States

Advertising is regulated by the authority of the Federal Trade Commission, a United States administrative agency, to prohibit "unfair and deceptive acts or practices in commerce."[1] While it makes laymen's sense to assume that being deceptive is being unfair, deceptiveness in practice has been treated separately by the FTC, leaving unfairness to refer only to other types.[2]All commercial acts may be deceptive, not just advertising, but noncommercial activity such as advertising for political candidates is not subject to prosecution under the FTC Act. The 50 states have similar statutes, which generally are very similar to that of the FTC and in many cases copied so closely that they are known as "Little FTC Acts." While the terms "false" and "deceptive" are essentially the same for most, being deceptive is not the same as producing deception. What is illegal is the potential to deceive, which is interpreted to occur when consumers see the advertising to be stating to them, explicitly or implicitly, a claim that they may not realize is false and material. The latter means that the claim, if relied on for making a purchasing decision, is likely to be harmful by adversely affecting that decision. Evidence must be obtained for what consumers saw the ad saying, and for the materiality of that, and for the true facts about the advertised item, but no evidence is required that actual deception occurred, or that reliance occurred, or that the advertiser intended to deceive or knew that the claim was false. FTC headquarters, Washington, D.C. The Federal Trade Commission (or FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. ...


The goal is prevention rather than punishment, reflecting the purpose of civil law in setting things right rather than that of criminal law. The typical sanction is to order the advertiser to stop its illegal acts, or to include disclosure of additional information that serves to avoid the chance of deception, but there are no fines or prison time except for the infrequent instances when an advertiser refuses to stop despite being ordered to do so.[3]


Pricing-based methods

In the UK most price based methods of false advertising are prohibited and strictly regulated. Hence the methods detailed below are rarely encountered and used only by the most disreputable operators.


Rebates

Main article: rebate (marketing)

Rebates were originally intended to pass savings directly from the manufacturer to the consumer. However in the U.S. they have become probably the biggest way to trick shoppers into paying more than the advertised price. Stores advertise a "sale" price and note only in the fine print that it is not the price at which it is actually sold for, but instead an "after rebate" price, which also fails to include sales tax. Many rebate fulfillment companies have been labelled as trying not to return money to the customers. A rebate is a type of sales promotion marketers use primarily as incentives or supplements to product sales. ... A rebate is a type of sales promotion marketers use primarily as incentives or supplements to product sales. ... Save might refer to: Save (sport) - to stop a goal or maintain the lead To save a document in computer file management (see also Saving a webpage) The River Save (Zimbabwe), Zimbabwe The River Save (Hungary), Hungary -- joins the Danube just above Belgrade. ... A sales tax is a consumption tax charged at the point of purchase for certain goods and services. ...


Inflated price comparison

By comparing a sale price to a "regular" price for the same product, advertisers can inflate the "regular" price in the order to create the impression that the sale price is very low. The intent is obviously to mislead consumers into thinking that they are saving money by purchasing the "on-sale" item or service. Some clothing stores in particular have essentially every item on "sale", and some grocery stores advertise "savings" over their regular prices for those using loyalty cards. In economics, consumers are individuals or households that consume goods and services generated within the economy. ... In marketing generally and in retailing more specifically, a loyalty card, rewards card, points card, or club card is a plastic card, visually similar to a credit card or debit card, that identifies the card holder as a member in a commercial incentives programme. ...


In the United Kingdom, under the Sale of Goods Act, any item in a sale must have been sold at the non-sale price for at least 28 consecutive days. Many companies sidestep this requirement by selling items at very high prices in a single store (often in expensive parts of London) for 28 days, before selling the items at the "sale" price in their other stores.


Introductory offers

An introductory offer is an offer for an ongoing service which is only valid for a certain introduction period. After this period, the price or terms of the agreement change, often without further notice to any consumers which have accepted the initial offer. This differs from bait and switch because the terms or "bait" are in fact actually delivered (making it only deceptive rather than inherently false), but the switch still occurs later on. In music, the introduction is a passage or section which opens a movement or a separate piece. ... A bait and switch is a form of fraud in which the fraudster lures in customers by advertising a good at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute good is. ... Bait is any substance used to attract prey, e. ...


The most common form of this is credit cards, which offer low interest rates to start and then rise greatly afterward. Enormous increases in rates are often triggered by a single late or overdraft, in addition to the enormous fees for the late or overdraft. Credit card companies have been criticized in the U.S. for luring college and university students with these offers and then making huge profits from the fees and rates after the students get themselves into debt. Credit cards A credit card is a system of payment named after the small plastic card issued to users of the system. ... An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. ... Look up Late, Late in Wiktionary, the free dictionary. ... This article does not cite any references or sources. ... One pays a fee as renumeration for services, especially the honorarium paid to a doctor, lawyer or member of a learned profession. ... It has been suggested that this article be split into multiple articles accessible from a disambiguation page. ... Representation of a university class, 1350s. ... The word student is etymologically derived through Middle English from the Latin second-type conjugation verb stŭdērĕ, meaning to direct ones zeal at; hence a student is one who directs zeal at a subject. ... This article or section does not cite any references or sources. ... For other uses, see Debt (disambiguation). ...


Introductory offers are also very common for cable TV, satellite TV, VoIP, and Internet services, especially those with bundling. The intent is to get the consumer used to receiving the service before the price goes up, so that they will continue on as customers with a much higher profit margin for the service provider. Cable television or Community Antenna Television (CATV) (and often shortened to cable) is a system of providing television, FM radio programming and other services to consumers via radio waves transmitted directly to people’s televisions through fixed coaxial cables as opposed to the over-the-air method used in... Satellite television is television delivered by way of orbiting communications satellites located 37,000 km (22,300 miles) above the earths surface. ... IP Telephony, also called Internet telephony, is the technology that makes it possible to have a telephone conversation over the Internet or a dedicated Internet Protocol (IP) network instead of dedicated voice transmission lines. ... Product bundling is a marketing strategy that involves offering several products for sale as one combined product. ... Intent in law is the planning and desire to perform an act. ... Profit margin is a measure of profitability. ... A service provider is an entity that provides services to other entities. ...


Other deceptive methods

Misrepresentations

Utilizing words such as descriptive terms or location terms to increase the perceived value of a product. An example would be advertising "Maine lobsters" when in fact the lobster are from the Pacific ocean, or Vidalia onions which are from Texas instead of near Vidalia, Georgia. These can also be considered infringement of trademarks in many cases. Another example is the United Egg Producers' "Animal Care Certified" logo on egg cartons which misled consumers by conveying a higher level of animal care than was actually the case. Both the Better Business Bureau and the Federal Trade Commission found the logo to be deceptive and it can no longer be used. Official language(s) None (English and French de facto) Capital Augusta Largest city Portland Area  Ranked 39th  - Total 33,414 sq mi (86,542 km²)  - Width 210 miles (338 km)  - Length 320 miles (515 km)  - % water 13. ... Binomial name Homarus americanus H. Milne-Edwards, 1837 The American lobster, Homarus americanus, is a species of lobster found on the Atlantic coast of North America. ... Genera Jasus Linuparus Palinurus Panulirus Spiny lobsters, also known as rock lobsters are a family (Palinuridae) of about 45 species of achelate crustaceans, in the Decapoda Reptantia. ... A Vidalia onion is a sweet onion of certain varieties, grown in a production area defined by law in Georgia and by the United States Code of Federal Regulations (CFR). ... Official language(s) No Official Language See languages of Texas Capital Austin Largest city Houston Area  Ranked 2nd  - Total 261,797 sq mi (678,051 km²)  - Width 773 miles (1,244 km)  - Length 790 miles (1,270 km)  - % water 2. ... Vidalia is a city located primarily in Toombs County, Georgia. ... Trademark infringement is a violation of the exclusive rights attaching to a registered trademark without the authorisation of the trademark owner or any licensees (provided that such authorization was within the scope of the license). ... For other senses of this word, see Trademark (disambiguation). ... The Better Business Bureau (BBB), founded in 1912, is an organization based in the United States and Canada. ... FTC headquarters, Washington, D.C. The Federal Trade Commission (or FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. ...


Advertising the Maximum

Internet service providers may advertise their service as offering "UP TO 256 KBPS", whereas on average use it could be just 20 kbps. The use of "up to" in the description protects them legally, while raising false hopes in the customers. Further, in the fine print it is mentioned that this includes both the download and upload speeds, deteriorating the customer's usage experience even more.


Fillers and oversized packaging

Some products are sold with fillers, which increase the legal weight of the product with something that costs the producer very little compared to what the consumer thinks that he or she is buying. Food is an example of this, where chicken meat is injected with broth or even brine, or TV dinners are filled with gravy or other sauce instead of meat. Canned tuna may also be labeled with a weight that includes the water or vegetable oil, though these are almost always drained off and are therefore useless. In general, a filler is something that is used to fill gaps. ... This article or section may contain original research or unverified claims. ... Broth is a liquid in which bones, meat, fish, cereal grains, or vegetables have been simmered and strained out. ... Brine is water saturated or nearly saturated with salt. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... This article or section does not cite any references or sources. ... For the computer protocol, see SAUCE. Or see source. ... Kinnikuman character, see Meat Alexandria. ... This article does not cite any references or sources. ... A shoal of skipjack tuna Tuna are several species of ocean-dwelling fish in the family Scombridae, mostly in the genus Thunnus. ... Impact from a water drop causes an upward rebound jet surrounded by circular capillary waves. ... It has been suggested that this article or section be merged with cooking oil. ... Look up drain in Wiktionary, the free dictionary. ...


In other cases, packages are under-filled, simply leaving empty space at the top, in products such as coffee cans which cannot be seen into until being purchased and opened at home. Particularly deceptive is when the same size of packaging is used for less product than it used to. This deceives consumers into continuing to buy the product, which they expect to have the same amount it always has. To evade legal problems, the label is changed to reflect the actual new amount, but this is essentially fine print which anyone is unlikely to notice. Packaging is the enclosing of a physical object, typically a product that will be offered for sale. ... A cup of coffee Workers sorting and pulping coffee beans in Guatemala Mature coffee fruit still on the plant Coffee is a widely consumed beverage prepared from the roasted seeds — commonly referred to as beans — of the coffee plant. ...


A similar problem in Christmas lights and other light strings is that the length of each set seems to get shorter each year, despite containing the same number of lights. The length of the set is given in small print while the number of lights is in large print.


References

  1. ^ 15 U.S.C. ยง45 (United States Code, chapter 15, section 45).
  2. ^ Richards, Jef I., Deceptive Advertising, Erlbaum (1990), at p. 20.
  3. ^ Richards, id; Policy Statement on Deception, 103 FTC Decisions 110 (1984), appendix to Cliffdale Associates; originally a letter from FTC Chairman James C. Miller to Rep. John D. Dingell (Oct. 14, 1983). For the history of changing from deception to deceptiveness as the standard, see Preston, Ivan L., The Great American Blow-Up: Puffery in Advertising and Selling, Univ. of Wisconsin Press, revised ed. (1996), at Ch. 8.

 
 

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