Deceptive sales can lead to serious injury for consumers and can result in lawsuits. In a civil suit, consumers may be awarded monetary damages as well as an order to cease using the offending language and promotions. Deceptive sales often involve promises of benefits that don’t materialize, false advertising or other misleading representations. Some examples include failure to disclose pertinent information, misleading price and savings claims, bait and switch advertisements, and careless use of the word “free.”
It’s illegal to mislead in any way that could cause a person to be misled about whether or not he or she will benefit from something. It’s also illegal to misrepresent the truth about a product or service. A company that misrepresents the truth can be liable for civil damages as well as criminal penalties. If the alleged misrepresentation is serious enough, it can be grounds for a class action lawsuit.
Many different kinds of products are marketed with testimonials and comparative pricing. The FTC has a set of guidelines for how to judge if a price claim is deceptive. For example, a manufacturer might say: “We sell this same mattress and box spring for $150 less than the former price of $50.” However, it’s only fair to compare prices for identical products that have been on the market for a significant amount of time in the past.
Advertisements based on pictorial representations present special challenges, since a picture can deceive. White-coated doctors, seals of the British monarchy and plush offices can suggest that a product is safe, reliable or expensive, even though the advertisement never explicitly says any of those things.
It’s against the law to misrepresent the availability of a particular product or service in an advertisement. It’s also illegal to make a comparison of the available product with an earlier version of the same product, unless there was a substantial change in both the appearance and performance of the newer product. For instance, it’s not okay to say that “The new model is much more energy efficient than the old one.”
Bait and switch ads are common in retail. The advertiser lures a customer to a store by dangling an alluring offer, then denies it or disparages it once the customer is there. For example, a retailer might advertise a Steinway grand piano for $1,000, but once the customer reaches the store, the product will be gone or it’ll be sold at a higher price.
Junk fees are a category of unfair or deceptive charges that appear on an item’s invoice and were not included in the advertised price for the product or service. These include shipping and handling fees, processing or documentation fees and other similar charges.
It’s also against the law to use the phrase “like-kind and quality” in an advertisement if it is not true or can’t be reasonably expected to be true. For example, a company cannot advertise its paint as being the same kind and quality as a competing brand’s paint if it has a different formulation or other features that do not affect the overall performance of the paint.