Deceptive Advertising

Marketing Term Paper

Principles of Marketing

MKT 2423

Angela Hanson

Deceptive Advertising

Deceptive advertising has been around since the beginning of time and still prevalent today. Sometimes it is done unknowingly by an advertiser, however more often than not; it is done with the intent to mislead the consumer making deceptive advertising a relevant marketing ethics issue. Deceptive advertising is a growing trend among business in our society. This trend includes directly trying to deceive consumers into thinking that they are getting something great but in reality they are getting nothing. All age groups are targeted by deceptive advertising it is just a matter of how consumer savvy you are. Almost all companies are guilty of this crime, including Phillip Morris Tobacco, weight loss programs and even grocery stores just to name a few.

Under both Federal and State law, an ad is unlawful if it tends to mislead or deceive even if it doesn't actually fool anyone. If your ad is deceptive you'll face legal problems whether you intended to mislead the customer or not. What counts is the overall impression created by the ad, not the technical truthfulness of the individual parts. Consumers are greatly influenced by countless advertisements urging then to purchase products that they may or may not need or want. The reason that many companies and business falsely inform consumers is purely for more business. If a company feels that a product does not have high enough quality as their competitors, the company will mark down the price and maybe put the product in an eye-catching box or make up a catchy slogan. A lot of consumers can see right through this scheme, but most do not. While many of these advertisements honestly inform and educate consumers, some are false, deceptive and even illegal.

The advertisement does not necessarily have to cause actual deception, but according to the Federal Trade Commission (FTC), the act need only likely mislead the consumer (Federal Trade Commission, [on-line]). Over the years the Federal Trade Commission has taken action against many business accused of engaging in deceptive advertising. If Federal Trade Commission investigators are convinced that an ad violates the law, they usually try to bring the violator in voluntary compliance. If that doesn't work, the Federal Trade Commission can issue a cease-and-desist order and bring a civil lawsuit on behalf of people, who have been harmed. Consumers often have the right to sue advertisers under the state consumer protection laws. For example, someone who buys a product in reliance on a deceptive ad might sue in small claims court for a refund or join others to sue for a huge sum in another court.

Companies use different models for advertising. According to David Gardner (1975) there are three types of deceptive advertising. Fraudulent advertising which is an outright lie, false advertising which "involves a claim-fact discrepancy", such as not disclosing all the conditions to receive a certain promotion or price, and misleading advertising which involves a "claim-belief interaction" (Assael, 1998). An example of claim-belief deception is the Warner-Lambert Listerine case. The label on the Listerine mouthwash bottle stated "Kills Germs By Millions On Contact" immediately followed by "For General Oral Hygiene, Bad Breath, Colds and Resultant Sore Throats". This misled consumers to believe that by using Listerine, it could prevent the common cold and sore throat (Warner Lambert, 1978). Listerine had to redo its advertising and delete "colds and resultant sore throats".

With all of this fraudulent activity in our society there is still a lot being done to try to stop it. For example, the Federal Trade Commission is trying to stop deceptive advertising by making laws. There are three common elements they look for in deceptive advertising. First, there must be "a representation, omission or practice that will likely mislead the consumer", such as misleading price claims, or an oral or written misrepresentation of a product or service. Oral and misrepsentaation is the most common form of deceptive advertising. According to the Better Business Bureau, "an advertisement as a whole may be misleading although every sentence separately is considered true." Second, the Federal Trade Commission examines the misrepresentation from the view of a "reasonable" consumer or particular target group such as the elderly. And finally, "the representation, omission or practice must be a "material one". This means that if the misrepresentation is likely to affect the consumers decision whether or not to use or purchase a certain product or service, this is considered material since the consumer may have decided differently if not for the deceptive advertising (Federal Trade Commission, 1998[on-line]).

The 1990's have brought on some new targets for deceptive advertisers as well as a new focus for Federal Trade Commission and the Better Business Bureau. The main target of the 90's include: antioxidant claims, the diet industry for misrepresenting weight loss claims, environmental or green marketing claims for products claiming that they are good for the environment and are not, 900 numbers for misrepresenting the costs of phones call and the internet. In one year, United Weight Control, Nutri/System, Inc, the Diet Center, Physician Weight Loss Clinic, Weight Watchers International, Inc and Jenny Craig had all been cited for deceptive advertising and were made to modify their advertising and marketing practices. The internet has also been a major source of deceptive advertising, particularly in regards to privacy issues. The internet has allowed online companies to "collect and use personal information about consumers, often without the consumer's knowledge or consent"