When it comes to advertising, it never pays to deceive the public. There is a fine line between pushing the truth and false advertising claims, and the latter has big consequences from both a legal and public relations standpoint. Dozens of companies have had to deal with this type of claim, and some of the largest survive them. However, some smaller companies can be bankrupted by false advertising claims.
Besides just lawsuits and bad PR, false claims can lead to FDA and other government investigations and, depending on your line of work, even criminal charges.
Here are a few examples of companies who engaged in some form of false advertising:
- Activia Yogurt: Advertised “scientifically proven” benefits of yogurt that was pretty much like any other yogurt. They ended up paying $45 million in damages in a class action lawsuit.
- Definity Eye Cream: An Olay ad showed former model Twiggy looking amazingly young — mainly because her photos were retouched. British lawmakers yanked the ads.
- Groupon’s Tourism Ads: This one was more subtle. Groupon used keywords of certain attractions on Google to attract ad clicks, but did not offer deals on those attractions. The class action suit on this violation is ongoing. This is one of the many reasons digital advertising is under fire right now.
- Airborne: The supplement famously claimed to prevent colds, but there were no studies that proved the claims. This was a high-profile scandal, and the claimed benefits of the product remain unproven.
Note the differences in the things that got these companies in trouble. Activia and Airborne were in trouble for false health benefits but of different types. Definity Eye Cream used technology to alter their ads, effectively deceiving customers. Perhaps the most interesting is Groupon using false keywords to get clicks on their Google ads. Even Facebook has been targeted with lawsuits regarding misrepresenting metrics on video ads.
All of them illustrate that no matter what product you have, if you stretch the truth too far, a false advertising claim will not be far behind. How do you protect yourself against false advertising claims? Here are some tips and tricks.
Watch Your Headlines
One of the easiest ways to get in trouble is to have a headline that makes a claim that is not true or is the exception to the rule. For instance, a headline that promises immediate results from a diet product or specific muscle gains from a protein supplement can get you in trouble with not only consumers but also the FDA.
A good example of this is Kashi, who reported their products to be “All Natural” in the headlines of ads everywhere. Instead, their products are filled with “synthetic and unnaturally processed ingredients,” says the class action lawsuit filed against them.
While this was clearly and intentionally dishonest, other companies have been caught with less intentional slips in their headlines. How do you avoid this pitfall? One of the first keys is to read the headline from the perspective of a customer. What might they infer or assume from the headline you have created? Is what it communicates about your product true?
How do you make sure? The answer is to have as many eyes on the headline as possible, and be sure to consult your legal team — preferably those familiar with advertising laws in your area. A misleading headline is one of the surest ways to get in trouble for false advertising.
Make Expectations Clear
There are exceptions to every rule. Every product or service will not work for everyone, and it is of vital importance that you make expectations clear in your advertising to avoid potential liability and false advertising claims.
Prescription drugs are a good example, as are dietary supplements. If you use an example of extraordinary results, that may be a good way to sell your product, but unless you make it clear that the situation presented is atypical, and results may vary by individual, you may be liable for false claims.
A good example of this is Extenze, a product famously sued for claims of male enhancement. Not only did the product claim its product was “scientifically proven,” but it did not actually fulfill its claims in the majority of men. Success was the exception, not the rule. The company paid a settlement in 2010 as a result of its misleading campaigns.
Unfortunately, this is not uncommon in drug manufacturers, and many have been sued for false advertising. Many make claims about their products that are either unproven or categorically untrue. False advertising often leads patients to approach their doctor with incorrect expectations. This can become problematic for doctors, who cannot use a drug to treat any condition not approved by the FDA.
Setting false expectations is a good way to end up in court. Be sure they are both true and clear in your marketing to prevent false advertising claims.
No one loves the guy at the end of a commercial who rattles off all that legal language that is a disclaimer, but they are absolutely essential in many marketing situations. A prime example is the lending industry.
Claims like “Instant Approval” or “We Can Finance Anyone” are risky without a disclaimer attached that tells applicants reasons they could be denied. Also, these are headlines that should be a little more vague: “We Can Finance Almost Anyone” and “Typically Approval Happens in Just a Few Moments” are better, and if you are in the financial or lending industry, these are often a requirement in addition to disclaimers.
Disclaimers can reveal anything from interest rates on loans to side effects associated with various drugs. Car manufacturers have them about fuel mileage claims and fitness equipment uses them to warn customers to check with their doctor before starting any workout routine. Pick up nearly any product in your home, and you will find a disclaimer or legal statement of some kind.
Don’t write these yourself. Consult a lawyer, and think of them as a contract between you and your customer. In some ways, that is what they are. These disclaimers alone can be the difference between an expensive class action suit and a successful product marketing campaign.
This should be a given after all of the steps above, but lawsuit after lawsuit show companies who violate this simple guideline. Remember, even if your dishonesty is unintentional, you will be liable and need to fix it right away. This is why even the best intentioned of companies typically carry some kind of business liability insurance and retain lawyers who specialize in advertising law.
A simple example is Taco Bell and their claims of “seasoned beef.” When asked how it was seasoned, the company struggled to answer, but the truth was they were using oat filler, not really seasoning at all. It is unclear whether this was a miscommunication between the company and marketing teams or whether it was intentional, but the company worked quickly to make things right, even taking out a full page ad to make fun of themselves.
While this case seems to have worked out, and the party who sued dropped the lawsuit, the potential of a PR disaster was narrowly averted. The dishonesty could have cost the company a lot more than it did. When it comes to your advertising, simple honesty is the best way to keep yourself out of legal trouble.
Protecting yourself against false advertising claims may seem like common sense, but it is easy to make a mistake or get caught up in the hype of a new product, setting yourself up for potential legal and PR trouble. Take your time. Watch your headlines, outline exceptions, and use disclaimers where needed. Be honest, and you’ll avoid the hazards of making false advertising claims.