It can be difficult for consumers to distinguish false advertising claims from true ones, especially when they are made by credible-sounding advocates. When companies with enormous spending power are behind such claims, increasing profits is often prioritized over providing consumers with accurate information.
It is for this reason that government bodies like the Federal Trade Commission (FTC) seek to protect consumers from deceptive practices and false advertising. The agency files numerous cases each year when the product’s true function fails to meet the expectations created by the advertisers.
Right now, high-profile companies are involved in legal proceedings over a claims they have made. In the last year alone, some of the most prominent product makers in the country have settled with the FTC over such cases, often with financial penalties attached. 24/7 Wall St. reviewed nine of the most misleading product claims.
Ambiguity and a lack of scientific evidence can be windows of opportunity for companies to claim their products do things that they don’t.
Mary Engle, Associate Director for Advertising Practices at the FTC, explained that in cases where the customer can tell right away that the product doesn’t do what is promised, consumers won’t buy the product again and there is less potential for consumer injury. She added that this is not the case, however, with hard-to-verify statements, such as claims about weight loss, or whether something is biodegradable, or that the product helps prevent cancer. “Those are the kinds of claims we tend to focus on at the FTC, because the potential for customer injury is greater.”
Misleading claims are more common in some industries than others. In many cases, companies prey on consumers seeking solutions in fields where there isn’t always an easy answer. This is why many of the false advertising cases each year are related to health foods, weight loss, or beauty products. There has also been an increasing focus on environmentally friendly products, as companies exploit opportunities to sell products they claim are “green” at a premium. For example, American Plastic Lumber falsely claimed its building materials were made entirely from recycled plastics, which was likely appealing to many of its environmentally-conscious customers.
According to Engle, it is impossible to know what is going on inside the minds of company leaders when it comes to false advertising. In some cases, the companies know their product is flawed and their advertisements are outright lies, while in others cases, they genuinely believe their product performs as stated. “Some companies” she added, “may be willing to push the boundaries to see how close to the edge they can get, and maybe they get caught, maybe they don’t.” For the companies on this list, it is difficult to tell which is which. All have settled their cases, regardless as to whether they’ve admitted guilt.
The tactics used by the companies that have settled lawsuits related to misleading advertising vary. In many cases, improper labeling is a factor. In others, companies use words with ambiguous meanings, like “green” or “all-natural.” Some companies actually hire individuals who are meant to appear as either impartial consumers or experts in the field. “Having an aura or veneer of scientific credibility is very important,” explained Engle. ADT, for example, allegedly paid three experts to present objective opinions on talk shows, despite the obvious conflict of interest.
To identify the nine most misleading product claims, 24/7 Wall St. reviewed the major government and private actions and lawsuits directed at companies on the basis of deceptive practices or false advertising. In order to be considered, a product had to be involved in a major settlement within the last year. We excluded incidents that were related to services rather than specific products, such as cases of predatory lending.
These are the 9 most misleading product claims.