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False Advertising: How Not to Promote Your Business

Ever seen those commercials for shoes that are supposed to tone your legs and butt? Several companies sell them, including Skechers, New Balance, and Reebok. If a shoe that can make you burn more calories or work your muscles better seems a bit fishy to you, then you might be on to something: all three companies have recently been investigated for false advertising. Reebok, for example, based some of its health claims for EasyTone and RunTone shoes on a trial conducted with only five subjects. Ultimately, the Federal Trade Commission (FTC) ordered the shoe company to pay a $25 million settlement and to refund customers who bought the toning shoes.

We’ve all seen the late-night infomercials peddling suspicious miracle products (yours for five easy payments of $49.99!), but one would hope that well-known brands like Reebok, Skechers, and New Balance would be less likely to mislead their customers. Unfortunately, they’re not the only large companies who have been investigated or hit with lawsuits over deceptive ad practices. Here are a few other examples:

  • Dannon settled a false advertising lawsuit in 2009 for $35 million. The reason? Its Activia and DanActive yogurts and the allegedly nonexistent health benefits ascribed to them. The settlement money was used to reimburse customers up to $100 each, depending on how much yogurt they had purchased. Dannon also had to alter the wording on its packaging to make the scientific names of the yogurts’ cultures more noticeable, among other things. But don’t despair—despite all this, Jamie Lee Curtis is still doing commercials for them.
  • LifeLock, the company that advertised its identity protection services by displaying its CEO’s social security number on commercials and billboards, paid $12 million in 2010 after the FTC determined that the company did not provide nearly as much protection to customers as it promised. The FTC also said that LifeLock collected personal information without encrypting it and that employees did not have antivirus or strong passwords on their computers. Not to mention, LifeLock’s CEO has had his identity stolen 13 times—heavily implying that the company’s services are not what they’re cracked up to be.
  • Listerine ad

    Listerine: It’s mouthwash, not cough syrup.

    Listerine has a history of leading its customers astray. The company first got in trouble with the FTC in 1976, because for more than fifty years Listerine had been claiming that its mouthwash could help prevent sore throats and colds. When these claims proved false, the FTC ordered the mouthwash company to mention in about $10 million worth of advertising that the mouthwash couldn’t help with cold or sore throat symptoms. More recently, in 2005, Listerine advertised that its mouthwash could replace flossing. But a judge ruled that Listerine’s claim was “false and misleading and [posed] a public health risk,” forcing Listerine to halt that advertising campaign, too.

  • Dell, in a ruling by the New York State Supreme Court, was found to have engaged in not just false advertising, but also fraud and deceptive business practices in 2008. Dell had been advertising financing options with no interest and no payments, but most credit-approved customers did not qualify for these promotions and were instead offered very high rates—a practice that the judge deemed bait-and-switch advertising. Dell also got in trouble for denying rebate requests, even when all the paperwork was correct, and for various issues with customer service. The computer company ended up paying $4 million and was told to make changes to its promotional and financial practices.

So what can we learn from these examples? Companies: don’t deceive your customers! And consumers: take everything a company tells you with a grain of salt, read the fine print, and research a business before you buy—especially if you are handing over your personal information.

Did any of these instances of deceptive advertising surprise you? Have you heard of any other false advertising cases recently? What personal experiences have you had with companies being misleading?

Image credit to ohmeaghan.


Rachel Hamsmith

When not writing for the blog, Rachel is a data entry specialist at QLP. She spends most of her free time consuming a variety of geeky TV shows, movies, and books, as well as funny cat videos and other Internet oddities. Otherwise, she moonlights as an editor for a literary magazine and tries to spend as much quality time as she can with friends and family. You can also connect with Rachel on Google+.

Comments

  1. amy

    Oh my goodness, Rachel! That LifeLock paragraph had me cracking up!! I’d seen those commercials probably hundreds of times and thought, “It sounds too good to be true”. Good to see I was right :) But seriously, his identity was stolen 13 times?! After like the third time wouldn’t you change advertising tactics or your businesses security, something?! Wow!!

    The only example you gave that I’d heard of was the Reebok example. The Listerine, Dannon, and Dell were news to me. What a great blog topic! Awesome Job!!

    • Rachel

      LifeLock looks to be reeeeally shady once you start reading more into it. There’s a lot of info and links about some of the controversies at the Wikipedia page, if you’re ever bored. :)

      And thanks, Amy! It was definitely a fun topic to research, so I’m glad you enjoyed reading about it, too! :)

  2. Bret

    Don’t forget about Fonality Phones!

    They advertise a phone system that can do pretty much everything short of make you a cup of coffee in the morning… only for it not be capable of answering phone calls or perform the most basic of tasks that less expensive and more basic phone systems have been providing their owners for decades now.

    As a small business owner it KILLS me to see a company flourish by rushing an inferior product to market, advertising/selling it as if it’s a complete and fully battle tested enterprise product, all while management fully knows that this is NOT the case.

    I’ve got enough dirt, support tickets, and concrete examples of Fonality’s missteps, make that borderline incompetence, that I could write a collection of books only rivaled by that of the Lord of the Rings trilogy! :)

    [THIS IS THE OPINION OF AN INDIVIDUAL AND NOT THAT OF QUALITY LOGO PRODUCTS]

  3. Mandy Kilinskis

    LifeLock doesn’t really surprise me, because the company always looked shady. However, the rest of the companies that you listed and/or described really did surprise me. These are companies that have been around for years and most are brand names in our homes. So the fact that they’re using false advertising kind of shocks me. How many other brands are doing this?

    Also, I don’t care how safe you claim your software is, that CFO was an idiot for putting his SSN on a billboard.

    Excellent post, Rachel!

    • Rachel

      It really is disheartening to see so many familiar brands get caught in act of misleading their customers. You can find a lot of examples especially in the health foods industry, where brands try to pass their food off as “organic” or “fat free” by fudging the standards and hoping not to get caught. Just another reason to be a diligent consumer and research what you buy!

      And yeah, seriously, advertising his SSN was just asking for trouble, no matter how good he thought his company was…

      Thanks, Mandy! :)

  4. JPorretto

    I LOVE when companies make claims only to be b*tch slapped for it later. Not much makes me happier than to sit back, relax, and see KARMA do its thang!

    Artigo marabilloso Rachel!

    • Rachel

      Yeah, there is a bit of schadenfreude in seeing big companies suffer consequences, haha. Maybe these companies will actually learn from their mistakes … we can hope, right?

      Grazas, sir! :)

  5. Jill Tooley

    Rachel, it looks like you followed your own advice and did your research! Nice job. I can’t believe that CFO had his identity stolen 13 times (oh wait…yes I can). What a silly thing to do! I guess he was even deceived by the quality of his company’s services!

    I didn’t realize Listerine had ever misled people into believing their mouthwash would prevent colds and sore throats. But apparently it was going on for 50 years – that’s a crazy long time for such a deceptive claim to live on! If you think about it, it’s easy to see why people believed it for so long. It’s probably not a bad idea to use mouthwash every day (have you heard about how dirty and bacteria-filled our mouths actually are?) to cut down on germs, but it’s probably not going to kill any cold germs before they overrun your immune system. Nice try, Listerine…

    P.S. Is Dell still selling computers? I haven’t seen any commercials of theirs in ages!

    • Rachel

      Thanks, Jill! Yeah, I thought the Listerine example was rather interesting, especially since their claims about cold and sore throat symptoms lasted for such a long time. I use mouthwash every day and think it’s great, but not THAT great, haha … and definitely not a replacement for flossing, either.

      I’m pretty sure Dell is still selling computers, but you’re right, I can’t remember ANY commercials from them in the last few years! They’re on this year’s Fortune 500 list, so I guess that’s something. Maybe they need to reevaluate their current marketing strategy… :)

  6. Joseph Giorgi

    Thanks so much for the heads-up about LifeLock, Rachel. I keep hearing their advertisements on the radio in the morning and lately I’ve been half-tempted to consider their services. I’ll think I’ll go ahead and look elsewhere.

    And shame on Dell for lying to its customers about financing options. That hits consumers where it hurts the most — their wallets. And that’s just plain unacceptable! >:(

    • Rachel

      Yeahhh, it’s probably best to stay away from them … glad to steer you in the right path! :) And agreed about Dell–financing options are never a good thing to be misleading about.

      Thanks for commenting, Joe! :)

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