Deceptive Advertising

By: Emily Bowers Dr. Taylor Consumer Behavior

Deceptive Advertising TABLE OF CONTENTS: Introduction:.........................................................................................................................3 Definitions:......................................................................................................................4 Creating Deceptive Advertising:..........................................................................................5 Examples:.........................................................................................................................6 Regulation for Advertising:................................................................................................. Cases:...................................................................................................................................! "elep#one $ervices:.......................................................................................................%& Dieting $upplements:....................................................................................................%% Conclusion:........................................................................................................................%3 'i(liograp#)......................................................................................................................%4

Deceptive Advertising

Introduction:
In advertising toda)+ t#ere are man) misconceptions and falsit) in advertisements. ,e are exposed to countless commercial messages ever) da) persuading us to (u) (rand name products+ creating images for us to adopt+ and convincing us t#at -e need and -ant more. 'ecause of t#is+ it.s important for us to carefull) examine ads to determine exactl) -#at t#e) are sa)ing. /no-ing t#e difference to -#at is real and -#at is not in t#e claims made () an advertisement is #ard to define. "#ere are man) -a)s companies can ma0e a consumer (elieve -#at t#e) see or #ear+ -#en it is reall) not true. Advertisements can (e ver) misleading and it is not fair to t#e consumer. Advertisers -ill ma0e claims a(out t#eir product or service to convince t#e consumer (ecause t#e) 1are greatl) influenced () countless advertisements urging t#em to purc#ase products t#at t#e) ma) or ma) not need or -ant. ,#ile man) of t#ese advertisements #onestl) inform and educate consumers+ some are false+ deceptive+ and even illegal.2% "#ere are man) t)pes of products -#ere misrepresentation of t#e use or actual attri(utes of t#e product #appen all t#e time. $ome examples t#at are common are -it# dieting pills+ promotional sales+ long3distance telep#one services+ services people provide+ etc. "#ere is a long list of t#ings -ere advertisements can deceive t#e consumer. $ome states even #ave t#eir o-n la-s pro#i(iting some t)pes of advertising and t#e la-s are to protect t#e consumer. "#is paper -ill cover t#e topic on -#at deceptive advertising is and #odeceptive advertising are in ads toda). "#ere are clear examples of cases -#ere misleading advertising occurs and cases t#at -ere filed against people and companies for
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Deceptive Advertising deceptive advertising. It is eas) for a consumer to (elieve t#e claims made () advertisers and it is #ard to 0no- -#at is true an)more. 7alse advertising is somet#ing t#at )ou -ill see in ads+ (ut determining -#en it is illegal is anot#er situation.

Definitions:
"#ere are man) terms used t#at mig#t confuse a person on -#at is allo-ed in advertising and -#at is not. "#e 7ederal "rade Commission 87"C9 defines deceptive advertising 1as (eing a representation+ omission+ act or practice t#at is li0el) to mislead consumers acting reasona(l) under t#e circumstances. "o (e regulated+ #o-ever+ a deceptive claim must also (e material.2* "#ere is also puffer) -#ic# can (e confused -it# deceptive advertising+ (ut puffer) in advertising is not illegal. "#is is t#e more vague area or 1gre)2 area -#ere it is #ard to define -#et#er t#e advertisement is misleading or not. :uffer) can consists of statements -#ic# are not capa(le of measurement or -#ic# consumers -ould not ta0e seriousl). It generall) deals -it# su(;ective statements+ expressions of opinion. 1"#e courts and t#e 7ederal "rade Commission #ave used t#e follo-ing criteria to distinguis# o(;ective claims from puffer): 8%9 -#et#er t#e statement is general or specific+ -it# general statements more li0el) to (e puffing< 8*9 -#et#er t#e statement is capa(le of measurement+ -it# non3 measura(le statements more li0el) to (e considered puffing< 839 -#et#er t#e statement is p#rased in terms of fact or opinion+ -it# opinion statements more li0el) to (e considered puffing.23 "#e last t)pe of advertising t#at is considered is t#e fact t#at some can (e classified to #ave antifactual content. 1Antifactual claims are t#ose t#at in explicit form
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Deceptive Advertising are not factual a(out t#e item. Claims ma) (e made (ot# explicitl) and impliedl)+ -it# ?explicit? content (eing -#at is literall) stated+ suc# as t#e -ords of t#is sentence as t#e) appear on t#is page. ?Implied? refers to -#at consumers see t#e message to (e sa)ing and to mean+ -#ic# t#us are t#e -ords of t#e sentence as t#e) appear in t#e consumer.s perception.24 "#is is (ecause rat#er t#an (eing informative+ or a true fact claim a(out t#e product or service+ it is not informative+ providing no fact at all a(out t#e item+ or misinformative+ providing false fact a(out it.

Creating Deceptive Advertising:

Advertisers are not out t#ere ;ust to ma0e up lies a(out products or services to get a consumer to purc#ase t#eir product. "#e impression created () a total advertisement+ including visual depictions and #eadlines+ is as important as specific claims contained -it#in t#e ad. "#e overall impression ma) #ave t#e capacit) to deceive+ even t#oug# eac# individual statement ma) (e factuall) accurate. "#e -a) t#at t#e) mig#t put t#e ad toget#er or t#e information t#e) decide to s#are or not to s#are is -#ere )ou get deceptive advertising. It is also #o- consumer -ill perceive an advertisement. 6ne person mig#t vie- and understand an ad one -a) and anot#er person can interpret it completel) differentl). 1"#at.s (ecause muc# product advertising is designed to leave t#e reader or vie-er -it# impressions t#at are not stated.25 Advertisements t)picall) accomplis# t#is () selecting t#e information t#e) are going to #ave and arranging it in a particular -a). =an) individual statements t#at are made can (e trut#ful+ (ut arranged toget#er could suggest an overall meaning t#at is unstated. Anot#er tactic is t#e selective use of facts+

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1A pro(lem ignored: dilution and negation of consumer information () antifactual content.2 1Advertisers are tric0)+ (ut also self3policing.2

Deceptive Advertising -#ic# is simpl) anot#er aspect of arranging t#e information. "#e exclusion of some pertinent facts can lead to am(iguit) or a lac0 of context t#at lets t#e reader or vie-er of an ad infer unstated meanings. Ever seen an 1@2 after a -ord or p#rase eit#er on a commercial on television or in a paper advertisementA ,ell+ t#at one @ can c#ange t#e -#ole meaning of -#at t#e advertisers are claiming in t#e ad. According to '''+ t#e) #ave a code of advertising t#at clearl) covers general aspects of guidelines t#at ad agencies and advertisers s#ould follo- -#en creating an advertisement. 'asic principles are stated and s#ort (rief definitions of situations are explained on -#at advertisers s#ould do. A(out t#e asteris0+ t#e ''' sa)s 1it ma) (e used to impart additional information a(out a -ord or term -#ic# is not in itself in#erentl) deceptive. "#e asteris0 or ot#er reference s)m(ol s#ould not (e used as a means of contradicting or su(stantiall) c#anging t#e meaning of an) advertising statement. Information referenced () asteris0s s#ould (e clearl) and prominentl) disclosed.2

Examples:
According to ,isconsin Department of Agriculture+ "rade+ and Consumer :rotection+ 1t#ere are various illustrations of Buestiona(le advertising practices t#at consumers s#ould (e a-are of.2 7rom oral misrepresentation of a product to 1free gift offers+2 "#ere are man) -a)s for advertisers to tric0 a consumer into purc#asing t#eir product or service. 7irst example is oral and -ritten misrepresentation -#ere a promotional ad for one3coat #ouse paint ma) state t#at one gallon -ill cover 6&& sBuare feet. ,#en )ou get #ome+ t#e paint covers onl) 45& sBuare feet and )ou need t-o coats.

Deceptive Advertising "#ere are also pictorial misrepresentations t#at can #appen. ,#en )ou read ads+ find out -#at is reall) (eing offered. A ne-spaper ad s#o-s a living room set on sale for C5!!. Alt#oug# six pieces of furniture are s#o-n+ in realit) onl) a four3piece set is on sale+ and t#e st)le s#o-n is different. A tin) disclosure in t#e corner of t#e ad explains t#is. Dnavaila(le sale items are anot#er part of deceiving consumers. 1A store s#ould stoc0 enoug# sale items to meet t#e reasona(l) anticipated demand. If a store #as less items in stoc0+ its advertising s#ould indicate t#at onl) a limited num(er of advertised items are availa(le.26 Also+ if )ou see an ad stating t#at merc#andise is 5& percent off+ don.t assume t#at it.s necessaril) a (argain. 6ne store.s prices ma) (e consistentl) lo-er t#an its competitors for items of compara(le Bualit). 6t#er stores ma) raise t#eir prices merel) to ma0e sale prices seem more appealing. ,it# 7ree gift items+ t#e consumer s#ould reall) (e careful -it# -#at t#e) (elieve. 7or example+ ?free #eadp#ones -it# t#e purc#ase of our A3% stereo s)stemE? $ome (usinesses raise t#eir regular prices to cover t#e cost of free gift offers. An ad must inform )ou if somet#ing else must (e purc#ased in order to get t#e free gift+ as -ell as #o- muc# it -ill cost )ou. "#ere is also somet#ing called 1(ait and s-itc#+2 -#ic# is a tec#niBue t#at is illegal to do (ecause it dra-s a potential customer into t#e store and t#en s-itc# t#e product t#at t#e) originall) -anted to tr) and sell t#em somet#ing else. 1$aleEEE *F IGCH "I3G6, 6GJK C*%!.!!2 is an example of (ait and s-itc#. 1It is unfair and deceptive for a retailer to advertise an attractive offer for a product or service -#ic# t#e advertiser does

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Deceptive Advertising not -ant or intend to sell+ (ut is used as a met#od to esta(lis# contact -it# a prospective customer in order to s-itc# t#e customer to anot#er product or service.2F =an) examples of puffer) #ave increased over t#e )ears in advertising. 7or example+ 1?"#e Dltimate Driving =ac#ine? for '=,< ?'et )ou can.t eat ;ust one? Ja).s potato c#ip< Co0e is ?"#e Real "#ing?< Iisa is ?Ever)-#ere )ou -ant to (e.?2 "#ese are all instances of puffer). "#e la- recogniLes t#at reasona(le consumers -ould not ta0e t#ese statements literall). "#ese are all exaggerated and em(ellis#ed statements of t#e products. ,#ere t#ere is no o(;ective statement capa(le of measurement+ t#e courts #ave allo-ed advertisers t#e freedom to ?puff? -it#out su(stantiation.

Regulation for Advertising:

"#e line t#at advertisers cross is a #ard one to reall) define. "#e 'etter 'usiness 'ureau #as man) (ranc#es -#ere t#e main reason -as created -as to #elp self3regulate advertising. "#e Council of 'etter 'usiness 'ureaus 8'''9 1runMsN a voluntar) forum+ called t#e Gational Advertising Division t#at allo-s (ot# consumers and competitors to c#allenge product advertising. "#e ;udgments of t#e GAD are not legall) (inding+ (ut most companies support t#is voluntar) regulation process+ so t#e) t)picall) accede to GAD.s ;udgments+ even -#en t#e) disagree -it# t#em.2! ''' #as a (ranc# called Gational Advertising Revie- Council 8GARC9 -#ic# -as 1esta(lis#ed to provide guidance and set standards of trut# and accurac) for national advertisers MandN sets t#e policies for t#eOGAD and C#ildrenPs Advertising Revie- Dnit 8CARD9 of t#e C'''. "oda)+ national advertisers+ ad agencies+ consumers and regulators ali0e rel) on GARC
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Deceptive Advertising to esta(lis# GAD and CARD guidelines t#at #elp maintain t#e #ig#est standards of #onest) in advertising. Compliance -it# GAD and CARD decisions is voluntar)+ (ut advertisers can appeal to t#e Gational Advertising Revie- 'oard 8GAR'9 if t#e) don.t agree -it# a recommendation.2%& "#e 7"C is ;ust anot#er of man) groups to #elp ma0e sure t#at claims made a(out a product are legit and are not misleading to t#e average consumer. "#e 7"C #as primar) responsi(ilit) for revie-+ regulation+ and+ -#en appropriate+ elimination of deceptive advertising. "#ere #ave (een man) cases filed against people for falsel) advertising a product and man) cases -#ere t#e consumer is t#e one to find out t#at t#e advertisement -as l)ing a(out t#e product. "#e 7"C is anot#er -a) to regulate -#at an advertiser states a(out a product and to ma0e sure t#at products are not falsel) represented.

Cases:
,it# all t#e man) various t)pes of products and services offered to consumers toda)+ t#ere is a lot of room for advertisers to use deceptive advertising to convince t#e potential (u)er to purc#ase t#eir product or service over t#e competition. "#e feexamples mentioned (efore+ -#ere deceptive advertising is commonl) seen+ are ;ust a small group of examples of #o- deceptive advertising appears -it#out t#e consumer even realiLing it. It is a reason t#at consumers s#ould (e ver) careful -it# -#at t#e) #ear and see in advertisements.

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Deceptive Advertising

Telephone Services:
"#ere #as (een couple of cases against long3distance p#one companies to -#ere it is ver) deceptive advertising t#at t#e) are doing and conve)ing to consumers. "#e 7CC and t#e 7"C issued a ;oint :olic) $tatement to protect consumers from unfair and deceptive advertising and mar0eting of long distance services+ including dial3around services 33 often called ?%&3%&? num(ers. "#e :olic) $tatement offers guidance to carriers to ensure t#eir advertising is trut#ful+ complete and non3 misleading. Additionall)+ it descri(es t#e 0ind of factors t#e 7CC -ill consider in determining -#et#er to (ring enforcement action against carriers for deceptive advertising practices.%% "#ere #ave (een examples of #o- long3distance telep#one companies -ill #ide c#arges or not completel) explain #idden c#arges to consumers. 6ne example is minimum c#arges -#ere an advertisement conve)s t#e message t#at long3distance calls cost %&Q a minute. In fact+ all calls are su(;ect to a 5&Q minimum c#arge. 5iven t#at reasona(le consumers -ould li0el) conclude from t#e ?%&Q a minute? representation t#at a one3minute call -ould cost %&Q+ and -ould not expect t#ere to (e a su(stantial additional c#arge+ t#e advertiser.s failure to clearl) and conspicuousl) disclose t#e minimum fee in t#e ad -ould li0el) (e deceptive.%* Recentl)+ t#is is also including t#e pa)3per3call industr). 1In %!!*+ Congress enacted t#e "elep#one Disclosure and Dispute Resolution Act to address pro(lems in t#e pa)3per3call industr). "#e Act mandated t#at t#e Commission issue rules regarding practices for t#e pa)3per3call industr)+ including its advertising.2%3 "#e act also #ave a :a)3:er3Call Rule -#ere it reBuires t#at t#e cost of t#e call (e disclosed in all
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Deceptive Advertising advertising and mandates t#at some advertisements include additional disclosures+ depending on t#e nature of t#e pa)3per3call service and also contains special provisions concerning advertising for pa)3per3call programs directed to c#ildren. "#e Rule reBuires t#at advertisers include a parental permission disclosure in an) pa)3per3call advertisement directed to persons under t#e age of % . "#e statute and Rule also pro#i(it directing advertisements for pa)3per3call services to c#ildren under t#e age of %*+ unless t#e service advertised is a (ona fide educational service. "#e :a)3 :er3Call Rule (ecame effective on Govem(er %+ %!!3.%4

Dieting Supplements:
"#e Commission also maintains a strong enforcement program against deceptive or unsu(stantiated advertising claims. "#e Commission #as (roug#t a num(er of cases alleging deceptive advertising () t#e diet industr). "#e Commission #as accepted six consent agreements from ver) lo- calorie diet companies as -ell as t#ree consent agreements -it# lo- calorie diet companies settling c#arges t#at t#e) #ad made deceptive representations a(out -eig#t loss and maintenance of -eig#t loss. 6ne case -as (roug#t up () t#e 7"C against $limAmerica Inc. for t#eir 1$uper3 7ormula2 diet. Evidence s#o-s t#at t#e defendants made false and misleading advertising claims in t#e mar0eting and sale of t#eir diet product called ?$uper3 7ormula.? "#e 7"C alleges t#at t#e defendants. ads falsel) state t#at $uper37ormula -ill ?(last? up to 4! pounds off )ou in onl) *! da)s+ ?o(literate? five inc#es from -aistlines+ and ?Lap? t#ree inc#es from )our t#ig#s 33 all -it#out t#e need to diet or exercise.
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Deceptive Advertising "#e defendants. product literature featured $uper37ormula as a ?Ge- "riple =edical 'rea0t#roug#? consisting of t#ree different ?-eig#t loss -eapons.? "#e ads+ pu(lis#ed in magaLines suc# as Jadies Home Rournal+ stated t#at $uper37ormula could effectuate dramatic -eig#t loss and remove inc#es from a user.s (od) siLe in a s#ort period of time and also stated t#at t#e representations made () t#e defendants are (ac0ed () scientific studies+ -#en+ in fact+ t#e claims #ave not (een scientificall) validated in credi(le clinical studies. 1"#e 7"C alleges t#at t#ese representations -ere false. "#e ads furt#er cited an endorsement from a doctor 33 Ho-ard RetLer+ =.D.+ -#o allegedl) #ad credentials -it# -ell30no-n nutrition and diet organiLations+ and in trut# t#ere -as no individual named Ho-ard RetLer -#o is or #as (een a mem(er of t#e American Council of Gutrition+ nor are t#ere an) (ona fide professional organiLations 0no-n as "#e American College of Endocrinolog) and Gutrition or "#e Researc# Institute of =eta(olism and Gutrition.2%5 "#e ;udge granted t#e 7"C.s reBuest for a temporar) restraining order against all defendants #alting t#e deceptive sc#eme on Ranuar) *!+ %!!F. "#e 7"C #as as0ed t#e court ultimatel) to order a permanent in;unction against t#e defendants to pro#i(it t#em from engaging in similar deceptive practices in t#e future. "#is is ;ust one of man) examples of #o- advertisements a(out dieting supplements or pills can (e false and untrut#ful. "#e companies ;ust -ant t#e consumer to (elieve t#at t#eir product is t#e (est one and -ants t#e consumer to purc#ase t#eir dieting pills for t#e (est results+ fastest+ etc.

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Deceptive Advertising

Conclusion:
6verall+ t#ere are a lot of advertisements t#at can deceive an) consumer. Consumers are advised to loo0 and listen carefull) to ads and to (e s0eptical of -#at t#e ads are claiming. Ever) time a consumer sees a 1sale2 sign or a commercial -it# a lot of small print+ ;ust t#in0 a(out -#at reall) is going on. A lot of t#e time+ t#e ads are ;ust tr)ing to ma0e t#e product or service seem more appealing to t#e consumer and to ma0e t#em -ant to go out and (u) it. Deceptive advertising is somet#ing t#at can (e regulated () eit#er t#e firm t#emselves+ consumers+ or even ot#er firms+ suc# as competitors+ -#o (elieve claims are false. It is illegal to lie a(out a product or service t#at is (eing offered to consumers. =an) more regulations are #appening to protect consumers. It is ver) important for advertisers to not tr) to create a false perceive image for t#e consumer. 'asicall)+ -it# deceptive advertising+ ;ust t#in0 t-ice (efore completel) (elieving an advertisementE

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Deceptive Advertising

Bibliography
Adrianson+ Alex. 1Advertisers are tric0)+ (ut also self3policing.2 Consumers' Research Magazine 6ct. *&&%: 43. :reston+ Ivan J. 1A pro(lem ignored: dilution and negation of consumer information () antifactual content.2 Journal of Consumer Affairs 36.* 8*&&*9: *633* 4. Deceptive Advertising3Department of Agriculture+ "rade+ and Consumer :rotection. %4 April *&&4 S#ttp:44datcp.state.-i.us4cp4consumerinfo4cp4facts#eets4deceptive>ad. #tmlT. 7ederal Communications Commission. 7ederal Communications Commission and 7ederal "rade Commission Issue Roint :olic) $tatement 6n Deceptive Advertising 6f Jong Distance "elep#one $ervices. ') J)nn Iermiller 87CC9+ :eter 7riedman 87CC9+ Allen Hile 87"C9. =arc# *&&&. %4 April *&&4 S#ttp:44---.fcc.gov4'ureaus4=iscellaneous4Ge-s>Releases4*&&&4nrmc&&&!. #tmlT. ''' Code of Advertising. %! April *&&4 S#ttp:44---.(((.org4mem(ers#ip4codeofad.aspT. 5eorgia ConsumerPs 5uide to: Deceptive Advertising. %! April *&&4 S#ttp:44---*.state.ga.us45a6CA4(rodeceptive.#tmT. Deceptive Advertising. %! April *&&4 S #ttp:44---.tantruminc.com4legal%.#tmT. Advertising :uffer): Current $tatus. *F April *&&4 S#ttp:44---.adla-.com4rc4ne-sltrs4arc#ive4arc>3>!6c.#tmlT. ADIER"I$IG5 U =AR/E"IG5 67 DIAJ3AR6DGD AGD 6"HER J6G53 DI$"AGCE $ERIICE$ $A=:JE 67 =I$RE:RE$EG"A"I6G$ AGD DECE:"I6G$. =arc# *&&&. *F April *&&4 S#ttp:44---.fcc.gov4'ureaus4Consumer>Information47act>$#eets4tia>examples. #tmlT. 7ederal "rade Commission. 7"C: $limAmerica Inc.. ') David R. $piegel and 'en AliLa. 7e(. %!!F. *F April *&&4 S#ttp:44---.ftc.gov4opa4%!!F4&*4slim.#tmT.

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