False Advertising: How to Take Action

Understanding False Advertising

Many companies—in order to get an advantage over their competitors or for other reasons—take advantage of consumers by fraudulently or deceptively attributing qualities to their products that do not exist. Or they do not inform consumers that their products contain potentially harmful ingredients. These issues are particularly acute for health products and products designed for infants and toddlers. 

The Impact of Deceptive Advertising

Typically, false advertisers operate on a massive scale, leading thousands of consumers to pay higher prices for products. While these deceptive practices often have small incremental impacts on individual transactions, they have a cumulative impact in the marketplace. Advertisers who use shady tactics encourage consumers to put their hard-earned money into the pockets of massive corporations that treat deception as business as usual and entice their competitors to engage in similar unlawful but lucrative behavior. 

How Class Action Lawsuits Help

This is why class actions are so important. By pooling the relatively small injuries of consumers together, class actions can hold corporations accountable, force changes to their business practices, make them disgorge ill-gotten gains, and send a strong warning to their competitors. 

Emerging Trends in False Advertising

New trends test the boundaries of fair marketing. One example is greenwashing, where companies exaggerate or fabricate claims about their environmental practices to appeal to eco-conscious buyers. Similarly, misleading “natural” or “organic” labels have become more common, especially in the food and beauty industries, leading to confusion and misplaced trust. In the tech sector, overstated performance claims create unrealistic consumer expectations. Misrepresentation or fraud can also be based on omissions. For example, companies sometimes mislead consumers by failing to warn when a product is extremely harmful—as Big Tobacco did for decades in the twentieth century.

Major Legal Cases & Their Impact

Some key cases include:

• Volkswagen Emissions Scandal, which led to billions in penalties and consumer compensation.
• The tobacco industry’s Master Settlement Agreement, which reshaped advertising restrictions and warnings.

These legal actions highlight how companies can be held accountable for misleading consumers. 

How Consumers Can Protect Themselves

To avoid falling victim to deceptive business tactics, consumers should research company reputations, verify business licenses, and read contracts carefully. Pay close attention to fees, cancellation policies, and dispute resolution terms.

Be cautious of exaggerated claims.

Keeping records of transactions and communications is crucial. Stay aware of common scams and fraudulent practices, and when in doubt, seek professional advice.

Because consumers cannot personally vet every transaction they make, federal and state legislators have imposed laws that allow for private rights of action against businesses that are caught in dishonest dealings. These laws allow consumers, through representation by attorneys, to hold businesses accountable and recoup what they’ve lost from deceptive acts.