The huge cost of high-profile advertising scandals

On Behalf of | Apr 21, 2017 | Consumer Fraud

Companies are expected to market their products honestly. They should let the products sell themselves on their own merits, and marketing is more or less just a way to tell the public what the products can do. Embellishing things or lying about a product can bring about accusations of consumer fraud.

This can be incredibly costly. For instance, Activia yogurt got caught up in a scam back in 2008, making claims saying that the yogurt had special ingredients that helped to boost a person’s immune system more than other types of yogurt. It cost more based on these claims. The court decided there was actually no scientific proof for the claims, though, and Dannon had to change the labels and settle for $45 million.

Another example is Red Bull, an energy drink. For about 20 years, the company used a slogan claiming that “Red Bull gives you wings.” They were sued, both on the grounds that it didn’t give people wings and that it didn’t boost physical and intellectual abilities — which is what the slogan was actually referring to. Without agreeing they’d done anything wrong, the company did settle for $13M. Any people who bought Red Bull between 2002 and 2014 could claim $10.

False advertising is something the government takes very seriously. Even with low-cost items like energy drinks and yogurt, the cumulative cost when millions of people are victimized can be incredible. Those who have been caught up in these scams need to make sure they know all of the legal options they have when the scheme comes to light.

Source: Business Insider, “18 false advertising scandals that cost some brands millions,” Will Heilpern, accessed April 21, 2017

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