- Posted by Holmes Weinberg, PC
- On November 4, 2015
Brands love to tout their product benefits in advertising. The law allows for a certain amount of “flexibility” with the truth but there’s a line that can be and often is crossed. Stretching the truth is called “puffery” (as in “We’re the Best [fill in the blank],” which is permitted since consumers rarely if ever believe such claims. But if consumers rely on the statement made, and the statement is false, they and competitors have redress. Competitors can bring arbitration-like proceedings through various organizations like the Better Business Bureau or by filing lawsuits under federal or state false advertising laws. Consumers often bring class actions under deceptive trade practices laws. And there are some criminal laws that also can come into play.
Last month, a federal judge preliminarily approved a consumer class action settlement against Subway. The “class” consisted of all consumers in the US who purchased a “foot-long” or “six-inch” Subway sandwich between January 1, 2003 and October 2, 2015 — according to the lawsuits, these sandwiches were approximately 10% smaller than advertised. Among other things, the consumer class asked Subway to advertise that the sizes of its sandwiches vary.
One of the challenges for brands in our chaotic social media world is that there are folks working inside and outside of the brands engaged in marketing, and the controls over what’s being said can be, let’s say, loose. With consumers and their advocates screaming for “transparency” (i.e. truthfulness), engaging in false advertising is more than just a legal problem. And brands cannot solve this challenge by getting everyone marketing for them to sign policies — most policies are not followed or understood in many organizations. So brands who really want to make the right points and be true to their brand values need to establish cultures where truth (with maybe with a little bit of puffery) is the standard.
The risks? Aside from having to pay out what can be massive settlements, judges can award so-called “corrective advertising” monetary damages — an amount to be spent on counter-advertising that will undo the falsehood. But by far the biggest legal risk is a court issuing an order (called an injunction) that prevents further use of the ad or promo in all media just as the campaign is being launched, and lasts until the trial of the case is done, which can take years.
So the next time you want to use marketing that stretches that line a bit, and maybe crosses it, you may want to take a second look and consider whether it’s worth the potential fall-out.