Many businesses and individuals rely on advertising to let the world know what they have to offer. While it is a great, direct-to-consumer vehicle, it is also one that is riddled with potential hazards, the most common being claims by consumers of false and misleading advertisements.
False advertising can be defined as any untrue, deceptive or misleading statement made to induce the public to enter into any contract to purchase merchandise, real estate, securities, and services. It applies to print ads in newspapers, television and radio spots, even oral representations made by an individual or entity intending to sell or distribute merchandise, real estate, securities and services.
Common Offenses
Some common examples of false and misleading advertisements include:
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Advertising a sale on a particular product where the product pictured in the ad does not represent the actual product. No one wants to pay $100 for an MP3 player that’s worth only $15.
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Offering a big sale on a particular product — TVs for example — and suggesting you have plenty of stock when you only have a small inventory. If you don’t say “while supplies last,” you’re misleading consumers. It gets worse if you try to up-sell the customer to a more expensive product because you’re out of the sale item. In that instance, you may be accused of bait-and-switch tactics.
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Offering written or oral performance guarantees that may not be realistic. People use products in different ways and those products may not hold up as well based on variations in use.
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Inflating prices to make a sale seem better than it is. If you sell a tool that’s normally $30, mark it up to $40 and then advertise it at $20, indicating it’s 50 percent off, that’s deceptive.
Preventing Problems
To avoid these problems, be sure to disclose all the information you have on a product or service. If you suspect, even in passing, that you may be misleading customers, take a different approach.
Don’t advertise or promote something you can’t give a customer. Don’t publicize offers or discounts for products or services if you have no intention of honoring the publicized offer or discount.
If a customer complains he or she was misled, address the issue quickly and directly. Find out why your customer thought your advertising was deceptive, how the actual product or service differed from what was advertised. Then do what you can to satisfy him or her. One unhappy customer will share his or her dissatisfaction with ten others, and people don’t want to do business with someone who lies or misrepresents themselves or their products and services.
In many cases, working directly with the customer will solve the problem. But if, despite your efforts, a customer threatens legal action, call your attorney. If you indeed misrepresented a product or service to a customer, you may be liable for double the monetary damages, court costs and reasonable attorney fees if the customer prevails in a civil suit against you or your business.
In the end, the best advice is to follow the golden rule. Put yourself in the place of your customers and treat them the way you would like to be treated. You can and should still run a profitable business. Just be honest about how you do it.
For more information on advertising regulations in Wisconsin, contact Brandon Prinsen, 608-784-5678.