What are False and Misleading Advertisements?

In today’s market, the only thing that sells is what's on the shelf. Companies have to advertise their products or services to consumers. As it is, there are thousands of brands offering similar, identical, or substitute products to consumers. The point of difference for the companies could be how they advertise their products or services. Advertisements help the consumer know the brand, its products, and its benefits. Companies can run advertisements through various channels −

  • Newspaper articles

  • Magazines articles

  • Television advertisements

  • Radio shows

  • social media platforms and others.

A good advertisement can always steal customers. It assists the company in earning revenue and consumers in making purchasing decisions. However, there could be some cases where the company, to get an edge over its competitors, misleads the consumer. In this article, we will be taking a deep dive into the same.

The Concept of False or Misleading Advertisements

In this scenario, the sellers provide the consumer with false, untrue, misleading, and corrupted information regarding the product, service, buying terms, availability of the product, and others. Companies do this to encourage consumers to buy the product or at least visit the particular store. False or misleading information results in −

  • Volume sales for the company

  • Stock clearance for the company

  • increased foot traffic in the company's retail stores

  • And most importantly, no repeat purchases by the consumers, and a bad public image of the company.

How Do Companies Mislead Consumers or Create False Advertisements?

There are no fancy ways in which companies cheat consumers. There are just some of the simple tricks played by shop owners that you may have encountered during your shopping history. It is time that we become aware of general malpractice.

  • Stock shortage − Consumers might have encountered a shortage of stock when they visited particular stores to buy certain goods that were advertised as being on sale. It is advisable for the companies to remove the item from sale as soon as it is out of stock and always have enough inventory in stock when it is on sale. A lack of inventory results in a negative customer experience.

  • Bait and switch − There may be instances where you go to a store to purchase a product that has been advertised as being on sale, and the sales team advises you against it. In this situation, the company offers you a better version of the product, which is also at a higher price. The idea behind this is to get interested people into the shop and then convince them to buy the expensive product. The sale item is bait for you to switch over to the real product.

  • Companies limit your purchase − Some shops claim that you can only purchase a limited quantity of the items advertised for sale. Well, if this is the case, the same has to be mentioned in the advertisement. If nothing is mentioned, the consumer can purchase as much as they are willing to pay for.

  • New or used − The companies have to mention if the particular product being advertised for sale is new or used. Companies cannot mislead consumers by selling old clothes at a reduced price.

  • Products should stand by their wording − If a product is being advertised as something that can cure cancer or a terminal disease, then it should be able to do that. A company has to give the consumer everything it promises during the advertisement.

  • Companies cannot force consumers to purchase − There could be scenarios when huge billboards announce that the first 100 consumers will get a dinner set for free when they visit the shop. The company can no longer include clauses stating that they must spend this amount of money to redeem the offer. This will be misleading to the consumer, and the company should be sued for its action.

  • Only Rs. 50 for this week − Consumers cannot be misled by advertising their product at the MRP and making it appear to be on sale. This is malpractice by the consumer and is punishable in the eyes of the law.

  • Buy the whole lot to avail of the discount − It is unlawful for the company to advertise a single item to be on sale, but when the consumer visits the store, they are forced to purchase the whole lot to avail of the reduced amount.

  • Giving half the information − There could be scenarios where the company is misleading the consumers by saying 50% off, but when the consumers visit the shop, they see only a very few items on sale at 50% off and others at a reduced discount amount. Consumers have to use the word "up" when they are not intending to provide a 50% discount on every item in the shop.

What can Indian Consumers Do When They Are Misled by Advertisements or Exploited by the Company?

After understanding how the consumers are being misled and exploited by the company, it is important for them to also understand what actions they can take to ensure justice for themselves.

  • Consumers in India should register their complaints at http://gama.gov.in/.

  • Consumers should also include evidence that the company is deceiving and exploiting them through their advertisements.

  • Consumers can also track the status of their complaints.

  • Various government departments and self-regulatory authorities will help consumers get justice.

Some well-known examples of companies in India misleading consumers through their advertisements and the price they had to pay for it are −

  • Sensodyne toothpaste − The company made big claims about being the number one sensitivity toothpaste in the world and a toothpaste that is being recommended by doctors worldwide. No documentation was found that would confirm the presence of the toothpaste on the world market or provide scientific evidence for this to be the best solution for sensitive toothpaste. The company had to withdraw its advertisement and pay a fine of 10 lakh rupees to the government.

  • Naaptol, the online shopping brand − was famous for creating artificial scarcity for the product and was also blamed for showing recorded videos and mentioning them as live broadcasts to the consumers in its 24*7 shopping channel. The company had to pay a fine and also withdraw those videos.

  • Byjus: The Learning Application −  The company claimed that over 1 crore students are taking its courses, and 90% of them are renewing their subscriptions as well, in advertisements shown to consumers. This was an exaggeration of records, and the company had to pay a fine as well as withdraw the advertisements.

Misleading, false, and exaggerated information in advertisements is not something new that is happening in the market. It is past time for consumers to become aware of their rights and begin to understand the tricks of corporations. In today's "red ocean," companies should also focus on creating and maintaining a good public image rather than just focusing on volume sales. The only company that can survive and thrive in the market is the one that has the support of the community and its consumers.