What are the Elements of False Advertising?

The purpose of advertising is to increase sales and generate brand awareness. According to the Federal Trade Commission Act, advertisements need to be honest without deception, and provide evidence to support their claims. The FTC determines whether an ad is deceptive by examining elements such as the distortion of information and unfair statements made in an advertisement.

Advertisements containing unfair statements are considered a major part of false advertising. According to the FTC's Fairness Policy Statement, an advertisement is deemed unfair when there is risk of harm to the consumer, or if the results of a product's claim are disadvantageous. When the negative aspects of an advertisement outweigh the benefits, it is considered to be at a disadvantage to the consumer.

Some false advertisements are misrepresentations of facts that distort information. Unless there is evidence for a particular claim, it will be considered false advertising. For example, if an advertisement claims the product it's touting has been medically proven to work, the advertisers must provide details of the medical study to support their statement.

Misleading statements are those which are ambiguous or may have a second meaning. They attempt to deceive consumers into believing a certain claim made within an advertisement. When an advertisement cannot provide evidence to back up a claim it has made, the FTC considers it false advertising. For example, if you advertise a health juice on the market claiming to reduce heart disease, impotence or cancer, it is vital that you have credible evidence to support your claims.

If an advertisement guarantees money back if the customer is dissatisfied with the product, the company must follow through with it. Dishonesty in advertising occurs when an advertiser offers such a guarantee or other bonus and the consumer does not receive it. An advertisement is considered unreasonable when the advertiser makes more than one claim and at least one is deemed inaccurate or untrue. The FTC takes unreasonable basis claims very seriously.