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4 Ways to Avoid Getting Sued for False Advertising

One of the worst things that a company can do is mislead its customers. First, it creates the sense that a company didn’t have enough faith in its product or service to sell it on the merits alone. Second, it says that a business doesn’t believe that its customers are valuable enough to be honest and straightforward with. Finally, it shows that a business cares more about the short-term bottom line as opposed to the lifetime value of an honest relationship with a customer.

What are some ways that your company can avoid misleading customers? That’s what we’ve answered with the tips below.

Tip 1 – Talk to a Lawyer or Marketing Expert

Is there a law against false advertising? The simple answer is yes. However, the more complex answer is that there are several laws that are aimed at protecting consumers from fraud or deception. For instance, the Federal Trade Commission in the United States has rules and guidelines that let consumers know more about their rights when using gift cards.

They also have rules about what marketers can and cannot do during times of consumer stress such as when a loved one dies. It may be a good idea to run any advertisement that you want to air or put online by an attorney or marketing guru. This may be an especially prudent idea if you want to run an ad in multiple countries that may each have their own rules and best practices to follow.

Tip 2 – Learn About Relevant Regulations on Advertising

As a general rule, you are not allowed to either directly or indirectly make claims that a company will not stand behind. For instance, if you say that a certain television is on sale for $100, a customer will expect that television to be on sale for $100. Of course, you could add a disclaimer saying that there are only four available at that price or that a consumer has to mail in a rebate check after paying full price at the store.

However, it would not be acceptable to tell customers that the television actually costs $500 or that the model shown in the ad is not that one that is actually on sale. Those would likely be cited as misleading claims in advertising. In the event that you couldn’t get the particular item into the store on the day of the sale, you should either reschedule it or take steps to compensate customers for their time.

Tip 3 – Prominently Point Out When Paid Actors Are Reading Testimonials

If you are using paid actors to read testimonials, you should make sure that a consumer knows that this is the case. It could be considered misleading to have someone who has a financial interest in promoting a company or product saying good things about a product or service without proper disclosure. In some cases, it could cause consumers to believe that others who have bought a product or used a service have had good experiences with them, which could sway their purchasing decision.

Those who are writing sponsored blog posts should fully disclose that they have been paid for the post. The same is true if you are getting a commission from the sale of a product or service that you promote on your blog or website. In addition to following the law, it helps to build trust among your readers, which can help you build a powerful online brand.

Tip 4 – Read or Watch an Ad From the Perspective of the Customer

The best way to get a feel for whether or not an ad is misleading or overly confusing is by watching the ad yourself. Alternatively, you may want to have a friend or family member read or watch it before it is released to the general public. If whoever watched the ad can give you an accurate and concise review of what they just heard, the ad is likely adhering to truth in marketing and other advertising principles.

However, if the person who watched the ad doesn’t understand what he or she just watched or read, it should raise red flags. It may be necessary to make changes in an effort to avoid being accused of making false claims in advertising. In some cases, it may include changing language in the ad or making relevant disclaimers more prominent within it.

A Real Example of Misleading Advertising

Most ads that we see on television, hear on the radio or read online are fraught with disclaimers and fine print. However, those disclaimers and fine print are included for a reason. If you don’t tell consumers exactly what they are buying and how much they are paying for it, it could lead to a loss of trust among your customers.

It could also lead to fines such as in the case of Europcar. It was fined $100,000 after a court found that the insurance the company actually provided didn’t match what the consumer got for his or her money. It also found that customers were so confused by the terms the company used that a large number had no idea what they were actually buying.

Misleading your customers is never a good idea whether it is done intentionally or not. Therefore, you should have several safeguards in place to reduce the odds of making a claim to customers that cannot or will not be honored by the company. Ideally, you will have an attorney or other legal experts on hand to review any marketing materials created before they are seen by the public.

About the Author: Riya is a writer with years of experience in marketing communications. She enjoys meeting new people and reading more books to get inspired for her own book. Riya writes for Carter Capner Law, a progressive, innovative and strongly motivated law firm based in Queensland, Australia. Follow her on Twitter.