False Advertising

For many consumers and businesses, a level playing field as well as truth in advertising makes us all safer and wiser in producing and using goods and services that seek to benefit us. Unfortunately, some companies or individuals put profits ahead of safety or efficiency. In getting their product or service on the market, these companies fabricate or stretch the truth about what their product or service can do to the detriment of consumers and honest competitors.

California has a number of laws and remedies available to consumers and business competitors who have been victimized by unfair or false advertising. If you feel you have been the victim of deceptive, misleading or false advertising, contact the San Francisco consumer protection lawyers at The Law Offices of Alex G. Tovarian.

What is False Advertising?

As the phrase implies, false advertising is the use of deceptive or false claims about a product or service. There is sometimes a fine line between “puffing” or stretching the truth a bit as opposed to proclaiming that a product can do certain things that are unproven or just plain false. The following are some case examples of false advertising;

  • Dannon Yogurt’s claim that its health benefits regarding digestion and others made it superior to other yogurt brands.
  • Olay showing digitally altered faces of models that used its eye cream to demonstrate it could erase wrinkles and make you appear decades younger.
  • Hyundai misrepresenting that its cars had much higher horsepower than they actually possessed.
  • Kellogg’s claim that its cereal, Rice Krispies, improved children’s immunity levels by 25 percent and improved their attention span by 20 percent.
  • Airborne, a supplement for colds, claimed it prevented the flu and common cold.

In each of these examples, there was either no scientific proof supporting the companies’ claims or it falsified data or images to enhance the alleged benefits of its product to the detriment of consumers and competitors who marketed similar products.

California’s False Advertising Law

California has its own false advertising law under Section 17500 of the California Business and Professions Code, or Unfair Competition Law (UCL), prohibiting companies from making any statements in the dissemination or sale of a product that it knows or should have known is false or misleading. The law also allows business competitors to bring a claim for lost revenues or expenses incurred as a result of the misleading ad or statement.

To prevail under this law, a consumer need only show that members of the public would likely have been deceived by the false or misleading statement.

Consumers can bring a claim as a “private prosecutor” under this law, which also criminally punishes the offender with a misdemeanor charge. Injunctive relief is available along with restitution. The monetary penalty is up to $2500 for each violation, which can be doubled in some instances. In determining the amount of the penalty, the court will look to the persistence of the misconduct of the defendant, how long the misstatements have been disseminated, the willfulness of the defendant, and the number of violations and the financial status of the defendant.

Under Section 17535 of the UCL, restitution is also available.

In many cases, the damages can be considerable. The California courts have ruled, for example, that a false statement made in a newspaper ad read by one person would constitute one violation, but that anyone else who read the ad and purchased the product or service would each constitute a separate violation.

Section 43(a) or The Lanham Act

Consumers and business competitors are also protected pursuant to federal legislation under Section 43(a), codified at 15 U.S.C. Section 1125(a), known as the Lanham Act. The elements of this law require a showing of:

  • A company made a false statement in a commercial ad about its own product or that of a competitor
  • The statements made deceived or were likely to deceive a substantial segment of the targeted population
  • The deception was likely to influence the consumer’s purchasing decision
  • Interstate commerce was involved
  • The business claimant was injured or was likely to be injured because of the false statement either by diverting sales away from it or by harming the goodwill of its own product

Under this federal statute, a statement proved to be literally false does not require proof of damages and a court will automatically grant relief. If a statement is only misleading, then the plaintiff must demonstrate that the statement did send the implied message and that it deceived a substantial segment of the buying public. Proof of an injury is required in this instance.

The remedies under this act provide that a successful plaintiff recover the defendant’s profits, any damages sustained by the plaintiff and court costs. In some cases, the damages may be trebled, or tripled, if the court feels that the damages are insufficient to deter future misconduct.

You should be aware that relief under the Lanham Act may be limited to competitors in some jurisdictions, although in California consumers and competitors are both able to bring claims under this law. Under California’s own UCL, an individual can sue as a private individual, as a competitor or consumer, or on behalf of the public.

Contact The Law Offices of Alex G. Tovarian

If you have been harmed by the deceptive claims of a competitor or by using a product that claimed to have certain qualities but that has caused you physical or financial harm, contact the consumer protection attorneys at The Law Offices of Alex G. Tovarian. Call us today for a free, initial consultation and evaluation of your case. We have the knowledge and resources to handle false advertising claims.