The Truth About False and Deceptive Advertising

US News

Whether on the television, radio or city bus, consumers face a barrage of advertisements throughout the day. Amidst the enticing slogans and images, it can be hard to tell which products and services are really worth the hype - and which could lead to shopper's remorse.

Before you dial that 800 number or checkout your online shopping cart, consumer protection experts advise taking a moment to educate yourself about what exactly you are (or are not) buying. There's more to advertising than you might think, and understanding exactly how advertisers attract consumers can alert you to potential deceit.

How advertisers draw you in. Advertising is a combination of marketing and science, or neuromarketing, according to Martin Lindstrom, author of the New York Times best-seller "Buyology: Truth and Lies About Why We Buy," which details his study of how ads affect consumers. Advertisements operate on two tracks: the conscious, using information you can read and understand, and, more commonly, the subconscious, using information and techniques that you are not clearly aware of. "Seventy-five percent of everything you and I do every day takes place in our subconscious mind," Lindstrom says. "In my opinion, advertising industries are doing pretty well in terms of drawing us in. Most of us think we are deeply rational but we are really not."

Subconscious advertisement techniques can include making soda poured over ice in a glass have a high amount of bubbles or increasing the noise of a steak sizzling on a grill. "It triggers our craving instinct," Lindstrom says. "It's the same spot in your brain that's activated when you are gambling, hungry for chocolate or jogging."

Even if consumers aren't giving an advertisement 100 percent of their attention, that doesn't mean the ad's message doesn't get through. "For example, most people don't watch TV commercials anymore, [they] listen to them," Lindstrom says. "Because you are not directly focused on the screen, your critical senses are dialed down and you are much more affected by the messages because you let everything come on board."

[Read: How Online Retailers Get You to Spend More.]

Another common subconscious advertising technique is creating a sense of urgency. "The ads that are getting the most attention and are most successful are the ones that call consumers to quick action," says Brent Brien, the American Consumer Protection Group's senior vice president of enforcement. "When people feel there is a sense of urgency, they don't process or scrutinize information correctly."

Advertisers also reap benefits by igniting fear in consumers. "We are hardwired to override any other behavior when fear comes into the equation," Lindstrom says. Sending an audience the right message at the right time, also called contextual advertising, helps create consumer fear. For example, a home insurance company could purchase printed ad space near a story about wildfires. "You may think that it is pure coincidence, but it's not," Lindstrom says. The variety of mediums advertisers use can make contextual messages more advanced, as companies begin to feed off consumers' social media profiles and Internet activity.

What to watch for. There are three general types of companies that engage in deceptive advertising practices, according to Brien. "'Fraud-by-night companies are generally just outright frauds and are gone in a month or two after they take what they can," Brien says. "We believe those companies are the most harmful to consumers and the marketplace. There are also companies that have been around for a little while and aren't really widely known, but engage in massively deceptive behavior and until government entities take notice, they can operate like that for years. The third type is made up of larger companies practicing hidden deceptive behavior where consumers generally can't file litigation action themselves because they don't have the resources to uncover the deception."

Regardless of what kind of company produces it, an ad that claims its product or service will make something overly simple or cause the consumer to quickly build wealth could be a "tip off to a rip off," according to Mary Engle, head of the Federal Trade Commission's Advertising Practices Division. "In areas like weight loss and exercise, consumers should be suspicious of any claim that says fast or easy," Engle says. "The company may have a small study or rely on some science, but the claims are so greatly exaggerated beyond what the product can actually do."

Consumers should also be wary of advertised financial services that promise to quickly reduce financial burdens such as a mortgage or other debt. "Most of the problems we see there are that they are just false rip-offs, and all they want to do is get your financial information," Engle says. Also pay close attention to testimonials from people who have had extraordinary results. "Is that really representative of what consumers will get or is this a one-in-a-million example?" Engle says.

[Read: When to Give Out Your Social Security Number, How to Protect It.]

"Advertising shouldn't be deceptive and if [ads] use disclosures, they have to be clear and prominent," Engle says. "And what that means is that if it is on the screen or presented in audio, it needs to be big and clear enough so that a consumer will notice and have time to read and comprehend it. If it's just a blur on the screen, they are pretty much saying 'but not really' in the fine print."

Lastly, pay attention to advertised money-back guarantees and the claims they make. "We settled a case last year with this product called the Ab Circle Pro, an abdominal exercise device," Engle says. "For three minutes a day, you were supposed to work out with this product and get nice abs. Their claim was 'Lose 10 pounds in two weeks or your money back.' To us, they were claiming that users were going to lose 10 pounds in two weeks." Companies willing to lie about products may also be more likely to lie about money-back guarantees, so take caution, she adds.

How you can take action. Experts recommend researching the items that catch your eye before making any investments to protect yourself from deception. Be sure to turn to trusted and reliable organizations. "You can go online and look at product reviews, but be careful because we have seen that some companies will put up websites that appear to be independent reviews," Engle says. "You can get a sense for the place or the product, but you should be skeptical of the ones that are the most or least glowing." The Federal Trade Commission has a host of readily available consumer-protection information about what to look for in ads based on past cases and general reports.

[Read: How Credit Card Companies Spot Fraud Before You Do.]

Consumers who feel they have been deceived by an advertised product or service have several ways to help right the wrong. Individuals can complain to the FTC either through an online complaint form or by calling the organization directly. Additionally, they should complain to the Better Business Bureau, "and complain to the company, which should actually be the first step because legitimate companies are going to respond to consumer complaints, while most frauds will not," Engle says.

Many industry-specific products and services are regulated outside the FTC, so if a consumer is interested in making sure others are not scammed in the future, Brien suggests going to the designated regulating agency, such as the Food and Drug Administration or the Department of Transportation. State attorney generals will enforce Unfair or Deceptive Acts or Practices regulatory proposals, although the extent may vary among states.

Engle's final piece of advice? "Look for advice from reliable organizations, do business with companies you know and trust, and complain if you don't get what is offered."



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