False Advertising and Misrepresentation – What You Need to Know

People will do anything to make money these days. Some sell cheap knockoffs, others sell at discounts, but the worst ones make money through false advertising and misrepresentation. These are big concerns in car purchases. Car dealerships can advertise their cars at a desirable price but sell them at higher prices, advertise cars that they don’t actually sell, or present their cars as having no damages when they have defects.

For these reasons, it is important to learn about these issues so you can recognize when car dealerships are trying to cheat you. If a dealership attempts to pull one of their tricks on you, you can choose to sue them for false advertising or misrepresentation.

What is the Definition of False Advertising?

False advertising refers to radio, television or internet ads that are misleading or false. Federal laws mandate that advertisements be honest and that claims made in ads be based on scientific evidence. These rules are called truth-in-advertising laws and are enforced by the Federal Trade Commission. Truth-in-advertising laws cover a broad range of products, from medicines to automobiles. Some of the most common types of false advertising include:

  • Bait and Switch – This occurs when a company offers a product that it does not have or intend to sell. Instead, a more expensive product is provided in its place.  A classic bait and switch scheme is when an auto dealer offers an exceptionally low-interest rate in an advertisement but fails to honor the rate when you show up at the dealership.
  • Price Deception – A common type of fraud is giving misleading or incorrect information about a product’s price. For example, if an auto dealer neglects to tell you that the price advertised is after the down-payment, then the ad would be deceptive.
  • Failure to Disclose – It is considered to be false advertising if a company fails to disclose a material fact about a product.

Businesses cannot make fake claims about a product’s price, purpose or quality. When a company or business engages in false advertising, they can face sanctions and can be sued. Victims of fraudulent advertising are entitled to injunctive relief and compensation of damages. If you believe that you have been misled, then contact an attorney. Your complaints can help stop fraud and scams.

Is False Advertising Against the Law?

Advertisements that contain misleading, deceptive or false information are illegal under both state and federal laws. A company or business can be held liable for misleading consumers via the internet, magazines, billboards, radio or television. Businesses cannot make false claims about the benefits of its products, the model, history, or the condition of a product. For example, an automobile dealer cannot advertise a car as being new when it is used.

The Federal Trade Commission (FTC) is the federal agency that is responsible for enforcing false advertising regulations or truth-in-advertising laws. If a business violates the law, the organization can bring a lawsuit on behalf of consumers, seek a court order to stop false advertising or issue a cease-and-desist order to force the business to remove the fake ads.

In addition to federal laws, most individual states have laws in place to protect consumers against false advertising. State consumer protection laws typically allow consumers to sue businesses that engage in deceptive advertising.

Can I Sue for False Advertising?

It is against federal and state laws for businesses to make false statements about their products or services. False advertising refers to a representation that is likely to mislead a consumer. For example, in Las Vegas, two auto dealerships — Planet Hyundai and Planet Nissan — touted deals that seemed attractive but weren’t true. They said that leases were available for zero down when they required $2,000 at signing. These dealers were charged by the Federal Trade Commission with false advertising. Other types of false advertising that you can sue for includes:

  • High-pressure Sales Tactics – Using forceful tactics to get a consumer to buy a product that they do not want or need.
  • Deceptive Form Contracts – These usually have deceptive language in the fine print.
  • Bait and Switch Advertising – Or advertising a product not for sale. A buyer is pressured into purchasing a higher priced replacement.
  • Failure to Disclose – Failing to disclose a material fact about a product.
  • Artificially Inflating Prices – This is used to make a price look more attractive than it actually is.

Both federal and state laws prohibit the above types of false advertising. If you have been the victim of false advertising, then you might be able to sue the business that engaged in the deception— even if they unintentionally deceived you. Talk to an auto fraud lawyer to determine if you have a case. You might be eligible to recover monetary compensation for any losses that occurred from the false claims.

Can You Sue a Company for Misrepresentation?

Misrepresentation occurs when a company or business makes a misleading or false statement to induce another party to sign a contract. An example of fraudulent misrepresentation is when an auto dealer tells you that a used car has a warrant to get you to buy the car — when in fact, there is no warranty. Another example of fraudulent misrepresentation would be when an auto dealer lies about the condition of the vehicle to get you to buy it. If an automobile breaks down right after you drive it off the lot, the shape of the car was likely misrepresented, and you have a reason to sue.

In order to sue for misrepresentation, then you must have acted on the false information supplied by the business and suffered some kind of damages, such as a financial loss or physical injury, for instance. If you had financial or other losses stemming from a misrepresentation, then it is in your best interests to contact an attorney for legal advice. An attorney can help you gather evidence against the business and get your money back. Additionally, if a judge or jury finds that fraud occurred, you might be able to recover attorney’s fees, money for losses you experienced and other compensation.

Can You Sue a Car Dealership for False Advertising?

If you are shopping for a new or used car and believe that you have been misled by false advertising, then you might be able to sue the dealership. The Federal Trade Commission (FTC) prohibits false television, internet and radio advertisements. Auto dealers are subject to FTC rules as well. Advertising that misrepresents a car’s condition, price or features is prohibited by law.

What To Do Before Purchasing a Car

Make sure that you read the fine-print of any print or internet advertising when buying a vehicle. If you can, keep the original advertisement from wherever you first saw the car. This can help you later if you are misled by the dealer. If you discover that a dealer has misrepresented the vehicle or somehow broken the law, then you need to hire an auto fraud attorney to help you file a complaint with the appropriate federal and state agencies and possibly sue the dealership on your behalf for damages.

How Do I Report a Website for False Advertising?

According to the Better Business Bureau, each day we are exposed to as many as 5,000 advertisements — every day. Many of these advertisements are internet-based. There is no telling how many online advertisements contain some form of false marketing. Website ads are subject to the same laws as print ads.

It is important to report each instance of false advertising to keep businesses from misleading consumers and making false or dangerous claims about their products and services.  You can report deceptive advertising to the Federal Trade Commission here. You can also report false advertising to the Better Business Bureau.

If you have been harmed by false internet advertising, you should contact a lawyer for advice. You might be entitled to compensation. An attorney can help you exercise your rights and put a stop to deceptive advertising practices.

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