False Advertising Corianne Coggan, Santara Greene, Joanna Hood, Tracey Keen, Jon Lane, Gress Lawson
• Deceptive advertising, also known as false advertising, refers to a manufacturer's use of confusing, misleading, or blatantly untrue statements when promoting a product (Consumer Laws)
• Chinese counterfeiting now costs foreign firms an estimated $20 billion a year in lost profits. "In the case of one consumer goods manufacturer, as much as 70 percent of the goods on the market are counterfeits," said Scholz.
• "Actually, trying to put a stop to it is going to take some fundamental changes in the society and economy here," Scholz said.
• The Commission on the Theft of American Intellectual Property reported in 2013 that “the scale of the theft of American intellectual property is unprecedented – hundreds of billions of dollars per year, on the order of the size of U.S. exports to Asia.” And, it said, “China is the world’s largest source of IP theft,” accounting for between 50% and 80% of the problem.
• Since 2013, “the problem has gotten much worse,” said Deborah Wince-Smith
• Not just clothes and electronics, drugs and machinery that are faulty can cause huge health concerns
• Amazon and eBay continue to sell fakes!
False ADVERTISING AND SOCIAL MEDIA
Advertising on Social Media sites has increased 40% increase in 2014 – $8.5 billion. Cookies gather information and tailor ads to specific users.
ShenZhen Global Egrow E-Commerce Co. - What Facebook shows you:
- Millions of "likes"
- Positive Reviews
- Photos of Quality Products
- Customer Service Contact Info
The Truth:
- F-rating from Better Business Bureau
- Hundreds of Complaints
- Poor quality products: The Ol' "Bait and Switch"
- Hard to contact or non-existent customer service
These e-commerce sites steal photos from other social media sites (e.g. Instagram) and other retailers, and then advertise the clothing, creating poor quality knock-offs.
Any negative reviews or comments are deleted.
Facebook continues to advertise for these companies despite the hundreds of complaints, claiming that their advertising guidelines address language and spam, not the company’s behavior.
On Facebook’s policies and advertising ads page it states under “Prohibitive Content” 3e, “Deceptive, false, or misleading content, including deceptive claims, offers, or business practices.
This is why many wish for products that are clearly unreliable be removed.
3I states, “Images that contain "before-and-after" images or images that contain unexpected or unlikely results.
- Fake Dr. Oz endorsement ads on Facebook for weight loss supplement pill "garcinia cambogia" and "green coffee extract"
- Advertises free trial offer “Just Pay For Shipping!"
- Charges people hundreds of dollars on their account
- Buyers have a difficult time contacting the seller to try and get their money back
Implications of False Advertising
- Consumers Suffer
- Businesses Suffer
- Employees Suffer
- Distorted Competition
Legal Implications
Pure Food and Drug Act (1906) - Prevents the manufacture, sale, or transportation of adulterated or misbranded or poisonous or deleterious foods, drugs, medicines, and liquors.
Federal Trade Commission Act (1914) - Enables the commission to investigate and disassemble business with unfair methods of competition.
Lanham Act (1947) - The federal statute that governs trademarks, service marks, and unfair competition.
Biblical Application
Deceit - “Therefore each of you must put off falsehood and speak truthfully to your neighbor, for we are all members of one body.” –Ephesians 4:25
Integrity - “Whoever walks in integrity will be delivered, but he who is crooked in his ways will suddenly fall.” –Proverbs 28:18
Contentment - “Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” –Hebrews 13:5
- False advertising and counterfeit products are on the rise and need to be addressed by companies and consumers.
- Should social media be regulated on what they are allowed to advertise?
- Should companies such as eBay and Amazon be held responsible for promoting and selling falsely advertised counterfeit products?
References
Bennett, S. (2014, December 9). Social media ad spending: Statistics & trends.
Brinkley, J. (2015, October 22). Chinese Counterfeiters Flood U.S. With Fake and Dangerous Goods.
Federal Trade Commission. (n.d.). Statutes Enforced or Administered by the Commission. Retrieved from Federal Trade Commission.
Food and Drug Administration. (2009, May 20). Regulatory Information. Retrieved from U.S. Food and Drug Administration.
Hoelzel, M. (2014, December 02). The social-media advertising report: Growth forecasts, market trends, and the rise of mobile.
NOLO. (n.d.). Lanham (Trademark) Act. Retrieved from NOLO.
Scammers Falsely Claim Dr. Oz Endorsement Of Diet Pills, And More. (n.d.).