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Could your advertising lead to a lawsuit?

As a small business owner, you naturally want to promote your products or services as much as possible -- but you need to also keep in mind the limitations you are under.

Federal and state laws alike aim to protect consumers from unfair business tactics. The responsibility for making sure that consumers have a fair chance to make informed decisions about their purchases falls squarely on you. If you fail to take that responsibility seriously, you open yourself up to litigation over deceptive trade practices. Quite often, that happens when a business owner or entrepreneur seriously misrepresents a product or service in advertising.

There's often a fine line between puffing up your product's description and misrepresenting it entirely. For example, Red Bull famously lost a lawsuit over the slogan, "Red Bull Gives You Wings!" The implication in the advertising was that Red Bull gave consumers extra energy (not literal wings).

Unfortunately for Red Bull, its product isn't particularly uplifting. It has the same effect (and about as much caffeine) as a cup of coffee. All the extra additives that a Red Bull has are just -- additives. Without scientific evidence that Red Bull actually boosts energy levels, the company's claims were deemed to be deceptive.

What are some other common ways that advertising mistakes can get you into trouble? They include:

  • Claiming that a product is new or improved when it is actually just repackaged or renamed
  • Making claims in your ads that you have no intention of meeting
  • Offering a sale on a product without any real attempt to meet the expected demand
  • Claiming that you have a specific endorsement (like a celebrity's approval) when you don't

A deceptive trade practice lawsuit can disrupt your business for a long time -- and be tremendously expensive to resolve. It's important to remember that you can be guilty of deceptive trade practices through advertising even if you didn't intentionally misrepresent your product.

Don't take chances with your business and your livelihood. Consultations with a business attorney can often prevent lawsuits before they ever get started.

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