False advertising

False advertising is advertising that misrepresents or overstates the quality, physical characteristics, or capabilities of a product or service. False advertising can also take the form of misleading pricing, which typically offers a low advertised price to entice customers before later charging undisclosed fees attached to the sale of the product. Advertising is regulated at the state and national levels in order to guard against deceptive advertising.

Overview

When advertising products or services, businesses have the task of convincing potential customers to buy their wares while also accurately describing the items or services being sold. Some use of exaggerated yet general statements, known as "non-actionable puffery," is permitted, since it is assumed that the average consumer will understand the intended use of the exaggeration. An advertisement for a cleaning product, for example, may claim to be the world’s best, but it may not falsely compare itself to any named competitors nor purport measurable attributes that make it superior. If an advertisement makes claims about a product’s quality or performance, the manufacturer must be able to support those assertions with facts and data. If a product does not perform as advertised, the manufacturer risks being sued for false advertising.

In the United States, false advertising is governed by the Lanham Act, a 1946 law primarily concerned with trademark infringement. The Lanham Act defines false advertising as presenting untrue statements as fact or misrepresenting a product or service. Common forms of misrepresentation include misleading statements about a product’s effectiveness or capabilities, false claims about a product’s country of origin, and inaccurate representation of a product’s size or appearance. Under the Lanham Act, any individual who feels that he or she has been harmed by false advertising may pursue civil action against the company in question. False advertising is also prohibited by the Federal Trade Commission Act of 1914, which outlawed unfair and deceptive trade practices.

The Federal Trade Commission (FTC) regulates advertising for most industries and is responsible for penalizing advertisers who use deceptive methods. The FTC tends to focus more on national rather than local advertisements. It also tends to be more concerned with advertisements that make misleading statements about health or safety or that make scientific claims that are difficult for average consumers to evaluate or confirm.

The growth of technology—from the radio to the television to the internet and smartphones—has created new avenues for advertisers to market their products. The internet, particularly, has exposed consumers to more advertisements than ever before. The ability for companies to post ads on websites and social media means they have more opportunities to manipulate the reported effectiveness, impact, or satisfaction of their products. Companies can post fake reviews, digitally alter images and videos, and use social media influencers and advertising spaces to make their products appear better or more effective than they are. Social media platforms have increasingly monitored posts and ads for false advertising, using algorithms and human review to detect and remove misleading content and scams. 

In the mid-2020s, ads generated using artificial intelligence (AI) became another source for false advertising. Some scammers were utilizing the technology to create ads based on well-known brands, tricking consumers into sharing their payment info on sites that looked real but were not legitimate. Others created ads depicting AI-generated products, which were often fake or misleading; customers who ordered such items rarely received what was advertised.

Insurance and banking advertisements are regulated by the federal agencies dedicated to those industries. In addition, various consumer-protection organizations work to resolve local advertising disputes, taking into account pertinent state and local laws regarding advertising practices. Companies whose advertising claims are determined to be false or misleading are typically sent cease-and-desist orders, which stipulate that the company must stop airing or printing the deceptive ad and that it will be subject to fines if future ads are found to be deceptive. Companies found guilty of false advertising may also be required to pay civil penalties in the form of settlements or refunds. In some cases, they may be ordered to create new advertisements that correct the deceptive claims.

Bibliography

Brockman, Ben. “The Role of Social Media in False Advertising.” CitrusLabs, 1 Nov. 2024, www.citruslabs.com/post/the-role-of-social-media-in-false-advertising. Accessed 27 Mar. 2026.

Fortin, Neal D. Food Regulation: Law, Science, Policy, and Practice. Wiley, 2009.

Geller, Max A. Advertising at the Crossroads: Federal Regulation vs. Voluntary Controls. 1952. Routledge, 2013.

Hoofnagle, Chris Jay. “History of the Federal Trade Commission.” Federal Trade Commission Privacy Law and Policy, Cambridge UP, 2016, pp. 3–30. www.cambridge.org/core/books/abs/federal-trade-commission-privacy-law-and-policy/history-of-the-federal-trade-commission/5F370F39863D572BA5B7A26CE60201B0. Accessed 27 Mar. 2026.

McAllister, Matthew P., and Emily West, eds. The Routledge Companion to Advertising and Promotional Culture. Routledge, 2013.

Mialon, Hugo M., and Paul H. Rubin, eds. Economics, Law, and Individual Rights. Routledge, 2008.

Mosher, Clayton. "False Advertising." Encyclopedia of White-Collar Crime. Ed. Jurg Gerber and Eric L. Jensen. Greenwood, 2007, pp. 95–97.

Nguyen, Stephanie T. “FTC Issues Orders to Social Media and Video Streaming Platforms Regarding Efforts to Address Surge in Advertising for Fraudulent Products and Scams.” Federal Trade Commission, 16 Mar. 2023, www.ftc.gov/news-events/news/press-releases/2023/03/ftc-issues-orders-social-media-video-streaming-platforms-regarding-efforts-address-surge-advertising. Accessed 27 Mar. 2026.

Payne, Brian K. White-Collar Crime: The Essentials. Sage, 2013.

SAGE Brief Guide to Marketing Ethics. Sage, 2012.

Sidorowicz, Joshua. "Scammers Using AI-Generated Ads on Social Media, Making It Harder to Spot Fakes." CBS News, 21 Nov. 2025, www.cbsnews.com/philadelphia/news/fake-ai-generated-ads-social-media/. Accessed 27 Mar. 2026.

Sofastaii, Mallory. "Ever Wonder What Really Comes When You Buy From a Social Media Ad? AI is Making It Harder to Tell What’s Real." ABC WMAR 2, 7 Nov. 2025, www.wmar2news.com/matterformallory/ever-wonder-what-really-comes-when-you-buy-from-a-social-media-ad-ai-is-making-it-harder-to-tell-whats-real. Accessed 27 Mar. 2026.

Williams, Thomas M. False Advertising and the Lanham Act. 2015 ed., Bender, 2015.