One of the most important communication tools to reach potential customers is advertising. Parallel to that the competition among big corporations these days is so severe that some are ready to cross the line of ethics and mislead their potential customers through advertising. Deceptive advertisements are created in such skillful way that customer although paying lots of money, feels that he made a good deal.According to the financial dictionary false/deceptive advertising is “Advertising that contains blatantly false or misleading statements, whether intentional or not.” (http://financial-dictionary.thefreedictionary.com)
Business Mantra also has articles reflecting the topic, where they define it as “Deceptive advertising refers to the use of confusing or untrue statements by advertisers in an attempt to mislead the consumer. It is also known as false advertising” (www.businessmantra.net).
The definition from the legal point of view is: "Any advertising or promotion that misrepresents the nature, characteristics, qualities or geographic origin of goods, services or commercial activities".(http://legal-dictionary.thefreedictionary.com)
All the above mentioned definitions state that the false/deceptive advertising is showing the products in a way that they leave the wrong impression of being what they are not in reality.
Deceptive advertising uses different approaches. Below I will try to present some of the most commonly used ones.
The first approach is inflating prices. The prices of products are raised before lower sale price is offered to the customers. For example some “Buy 1 get 1 Free” offers may double the price of the product in order to cover the cost of the free one.
Besides that companies hide fees and surcharges. As a result on top of the communicated base price there is more to be paid by the customer at the point of purchase.
Bait and switch is the tactic when customers are lured by attractive offers and then more expensive stuff is pushed to them.
Companies also are manipulating the standards. That is why you may never find out that the Italian genuine leather boots were made in China and the 100% natural juice had nothing natural in it.
Unfortunately many testimonials appear to be false. The model which lost weight has never been fat; the owner of the wrinkle-free face never had wrinkles before and never used the cream, etc.
Very often vague language is used in the advertising. The messages may be misinterpreted in several ways in order to confuse the customers. Messages may not be very clear and straightforward and as a result cause misunderstandings.
Of course, there are advertising and consumer laws and regulatory bodies, which function is to protect the consumer and promote truth in advertising. In 1914 The Federal Trade Commission (FTC) was established. Its task is protecting the consumer rights. The FTC is responsible for creation and enforcement of the legislation that governs commercial practices. The most responsible division of the Federal Trade Commission for protecting the privacy of consumers and prohibiting deceptive advertising practices is the Bureau of Consumer Protection. That is where deceived customers should apply with their claims.
You see the ad, you are impressed, but as soon as you get to the shop you find completely different picture. You feel deceived and annoyed that the advertising consumed your time and efforts as well as the money, in case you found about the false information after the purchase.
In order to get more vivid understanding of how False/Deceptive ads look these days please find below the examples, which have created by noise:
Dannon’s Avtivia brand yogurts have been priced much higher than other yogurts because of its nutritional benefits which the company was backing up by false “clinical” and “scientifically” proofs. As a result, in 2010 Dannon had to pay around $45 million in damage to customers, who sued the company.
It appeared that Olay’s Definitly eye cream ad, which featured wrinkle-free former model 62 y. o. Twiggy were retouched. So there is no wonder that the consumers would never get the effect they were expecting, while buying the product. In 2009 and 2010 Kellog’s had tough times too.
In 2009 Federal Trade Commission shut down their Froster Mini-Wheals cereal ad campaign, which claimed that the cereal improved kids’ attentiveness by 20%. The studies showed the reality, which was that half of the kids were not affected at all and only 1-in-9 kids had that kind of improvement. Just a year later its Kellog’s Rice Krispies ad campaign was accused in misleading consumers about its immunity boosting properties.
Another company capitalizing on immunity boosting was Nestle. In its turn the company claimed that their BOOST Kid Essentials will reduce children’s sick-day absences. There was no research proving the statement, of course.
Extenze is a herbal nutritional supplement for "natural male enhancement". The company was bold enough to claim that the size increase has been scientifically proven. In 2010 Extenze had to pay a $6 million settlement to disappointed men.
Reebok’s EasyTone shoes promised fit hamstrings, calves and buttocks and as a result a perfect figure, which you could gain “just by walking”. The Federal Trade Commission does not think that EasyTone shoes do not affect the muscles in any better way than normal footwear does. That is why Reebok International Ltd will pay $25 million in customer refunds.
China Airlines used the hidden fees and surcharges deception and in their website did not inform about additional taxes and fees. The U.S.
Department of Transportation took action and fined $80,000.
Only well known big brands have been mentioned above, but there are many unknown ones too, which use false advertising in order to attract customers and become big well known businesses too.
Cable companies are using false advertising as well. For Instance when you subscribe to high speed Internet with speed up to 14,4 MB you never thought that “up to” meant that the speed may also be zero and with those 2 words the company has covered its back and can’t be sued.
Being impressed by the wonders the drug can do you buy the drug without even realizing that it also has serious side effects.
You see mobile operator’s billboards with 0USD/min all over the city while driving, but you do not notice the small asterisks next to which it says that the free tariff applies only starting from the 15th minute of conversation.
Security alarm producing and installing companies are providing fake and exaggerated crime rates for the areas where they advertise. You receive their flyer and looking at the figures wonder why up to now you did not realize how dangerous your neighborhood was.
Many customers, driven by the desire to have thick and long lashes like the ones model is advertising, are ready to pay extra money for mascara. But no matter how expensive the mascara was and which brand they bought, many of the customers are unsatisfied after trying, because many company use false lashes in their ads.
False/deceptive advertising is used by companies from different industries, for wide range of different products and services and in various means.
More creative ways are invented by companies to create very credible and impressive false ads, which lure and attract customers. Customers, in their turn, become more annoyed by the fact that they have to pay more attention to details and stay alert most of the time in order to avoid disappointments from their purchase. Let’s try to understand how customers can avoid the confusion.
In order to minimize the risk of being deceived by the advertising below are the simple tips to follow.
One should pay attention to footnotes and asterisks behind which the “unpleasant” part of info is hidden.
Also make sure that the quoted price in the ad matches the actual purchase price, because it may not always be the case.
Pay extra attention to the ads using phrases like “as low as,” “starting at,” or “ and up” next to the listed price, it most probably means that the price you see is not the one you will need to pay.
Specific amount of shipping and handling or any other hidden fees and charges may be applicable. Once you add them up the offer may not be as attractive as it seemed in the beginning.
And last but not least, make sure that the free offer does not carry any conditions. You may realize that the offer is applicable only with $20 purchase for example.
Conclusion
It seems that no matter how hard does the Federal Trade Commission monitor and penalize the companies, the latter always find loopholes and create more innovative and sophisticated deceptive advertising strategies.
I believe that the major reason why most of the companies risk their reputation and take chance of being charged with a deceptive advertisement fees is making money. The research showed that the competition among companies is very severe and they are all fighting for customers. I am more than certain that the present economic crisis caused reduction in customers’ spending. Besides that the crisis brought serious financial difficulties to the companies, which is why each customer has become more valuable than before. At the same time through my research I found that there are many informational resources for the customers, which explain and warn them about deceptive advertising and provide tips reducing the risk of being deceived. As a result, companies are facing the challenge of creating new tricks and non standard approaches of using false/deceptive advertising.
Taking into consideration all the findings of my research I will conclude that in our economic crisis the advertising will become even more deceptive.
Works Cited
"Deceptive Advertising Overview." Consumer Laws. Web. 18 Nov. 2011. <http://consumer.laws.com/deceptive-advertising/deceptive-advertising-overview>.
"False Advertising, False Advertising Examples, Deceptive and False Advertising." Business Code Ethics Articles, Time Management Skills Tips, Steps to Starting a Small Business, Educational Leadership Skills Development. Web. 18 Nov. 2011. <http://www.businessmantra.net/false-advertising.html>.
"Kellogg’s Slapped by FTC, Twice, for Misleading Ads | Fooducate." Fooducate - Eat a Bit Better™. Web. 18 Nov. 2011. <http://blog.fooducate.com/2010/06/04/kelloggs-slapped-by-ftc-twice-for-misleading-advertising/>.
"Ten Misleading Drug Ads - Forbes.com." Information for the World's Business Leaders - Forbes.com. Web. 18 Nov. 2011. <http://www.forbes.com/2010/02/02/drug-advertising-lipitor-lifestyle-health-pharmaceuticals-safety.html>.
Weinmann, Karlee, and Kim Bhasin. "14 False Advertising Scandals That Cost Brands Millions." Business Insider. Web. 18 Nov. 2011. <http://www.businessinsider.com/false-advertising-scandals-2011-9?op=1>.
"U.S. Fines China Airlines for 'deceptive Advertising' - CNN." Featured Articles from CNN. 21 June 2011. Web. 18 Nov. 2011. <http://articles.cnn.com/2011-06-21/travel/china.airlines.fined_1_security-fee-deceptive-advertising-fines?_s=PM:TRAVEL>.
"Nestle Agrees to Stop Lying To Parents - Deceptive Advertising - CheatingCulture." Home - CheatingCulture. Web. 18 Nov. 2011. <http://www.cheatingculture.com/deceptive-advertising/2011/1/24/nestle-agrees-to-stop-lying-to-parents.html>.
"UPDATE: Reebok To Pay $25M To Settle Deceptive Advertising Charges - WSJ.com."Business News & Financial News - The Wall Street Journal - Wsj.com. Web. 18 Nov. 2011. <http://online.wsj.com/article/BT-CO-20110928-710940.html>.
