What's the difference between false advertising and a little promotional exaggeration?
Promotional exaggeration, or "puffery," is legal, even though you're making claims that can't be verified -- the kind that no reasonable person would mistake for the absolute truth. False advertising, on the other hand, makes claims that are intentionally misleading and designed to fool even reasonable people into believing that they're real.
For example, imagine that an antique car dealer has a Lincoln that's all decked out with zebra-striped seats and gold rims and he has an ad that says the car was "Elvis Presley's favorite Lincoln." What he actually means, however, is that the car was overhauled to look like a car that Elvis Presley once owned and favored -- not that Elvis actually ever owned that particular car or even rode in it. If he makes the sale to a collector of Elvis memorabilia who thinks he is buying the real thing, that buyer is a victim of false advertising.
While some cases of false advertising are easy enough to see and understand, others aren't so clear. The question that companies have to ask themselves before making any claim is, "Could this be verified objectively or is it just a subjective, emotional claim?"
Unfair business practices like false advertising can damage an entire industry. Some customers may come to view everyone in the business as dishonest.
In addition, it isn't uncommon for one company to take another to court over claims of false advertising if the aggrieved company thinks that your ad is misleading their customers and drawing them away.
You can end up losing a lot of money through the cost of a lawsuit. You can also lose the cost of your ads and airtime if a complaint is lodged against you with the Federal Trade Commission (FTC) and the ads are found to be objectively false. You may even subject your company to serious fines.
To protect yourself against claims of false advertising and other unfair business practices, it helps to consult an attorney before you embark on an advertising campaign. For information on how our law firm can help you operate your business without fear of litigation, please visit our web page.