The 9 Most Misleading Product Claims

It can be difficult for consumers to distinguish false advertising claims from true ones, especially when they are made by credible-sounding advocates. When companies with enormous spending power are behind such claims, increasing profits is often prioritized over providing consumers with accurate information.

It is for this reason that government bodies like the Federal Trade Commission (FTC) seek to protect consumers from deceptive practices and false advertising. The agency files numerous cases each year when the product’s true function fails to meet the expectations created by the advertisers.

Right now, high-profile companies are involved in legal proceedings over a claims they have made. In the last year alone, some of the most prominent product makers in the country have settled with the FTC over such cases, often with financial penalties attached. 24/7 Wall St. reviewed nine of the most misleading product claims.

Click here to see the nine most misleading product claims.

Ambiguity and a lack of scientific evidence can be windows of opportunity for companies to claim their products do things that they don’t.

Mary Engle, Associate Director for Advertising Practices at the FTC, explained that in cases where the customer can tell right away that the product doesn’t do what is promised, consumers won’t buy the product again and there is less potential for consumer injury. She added that this is not the case, however, with hard-to-verify statements, such as claims about weight loss, or whether something is biodegradable, or that the product helps prevent cancer. “Those are the kinds of claims we tend to focus on at the FTC, because the potential for customer injury is greater.”

Misleading claims are more common in some industries than others. In many cases, companies prey on consumers seeking solutions in fields where there isn’t always an easy answer. This is why many of the false advertising cases each year are related to health foods, weight loss, or beauty products. There has also been an increasing focus on environmentally friendly products, as companies exploit opportunities to sell products they claim are “green” at a premium. For example, American Plastic Lumber falsely claimed its building materials were made entirely from recycled plastics, which was likely appealing to many of its environmentally-conscious customers.

According to Engle, it is impossible to know what is going on inside the minds of company leaders when it comes to false advertising. In some cases, the companies know their product is flawed and their advertisements are outright lies, while in others cases, they genuinely believe their product performs as stated. “Some companies” she added, “may be willing to push the boundaries to see how close to the edge they can get, and maybe they get caught, maybe they don’t.” For the companies on this list, it is difficult to tell which is which. All have settled their cases, regardless as to whether they’ve admitted guilt.

The tactics used by the companies that have settled lawsuits related to misleading advertising vary. In many cases, improper labeling is a factor. In others, companies use words with ambiguous meanings, like “green” or “all-natural.” Some companies actually hire individuals who are meant to appear as either impartial consumers or experts in the field. “Having an aura or veneer of scientific credibility is very important,” explained Engle. ADT, for example, allegedly paid three experts to present objective opinions on talk shows, despite the obvious conflict of interest.

To identify the nine most misleading product claims, 24/7 Wall St. reviewed the major government and private actions and lawsuits directed at companies on the basis of deceptive practices or false advertising. In order to be considered, a product had to be involved in a major settlement within the last year. We excluded incidents that were related to services rather than specific products, such as cases of predatory lending.

These are the 9 most misleading product claims.

1. ADT Pulse
> Company: ADT Corporation
> Industry: Home security

ADT is one of the most recognized names in the home security business, and relied upon by more than six million households and businesses to keep property safe. However, the details of a recently settled suit from the FTC may affect customer confidence in the company’s product. A group of supposedly independent reviewers appeared on various news and talk shows, including NBC’s Today Show to critique ADT’s new systems, ADT Pulse. The problem, alleges the FTC, is that while these reviewers were presented as impartial they were in fact paid by ADT to promote the product. Jessica Rich, Director of the FTC’s Bureau of Consumer Protection said, “It’s hard for consumers to make good buying decisions when they think they’re getting independent expert advice as part of an impartial news segment and have no way of knowing they are actually watching a sales pitch.”

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2. Vitaminwater
> Company: Coca-Cola Company
> Industry: Beverages

Many Americans supplement their diets with vitamins, and one might expect a product called Vitaminwater to have similar nutritional virtue. Glacéau, also known as Energy Brands, a subsidiary of Coca-Cola, marketed Vitaminwater as a vitamin- and mineral-enhanced beverage. Other words such as “defense,” “rescue,” and “endurance,” were also commonly used to advertise the drink. In November 2014, the Center for Science in the Public Interest (CSPI) filed a class-action lawsuit against Coca-Cola for its deceptive advertising of Vitaminwater. The complaint was one in a series of legal actions taken against Coca-Cola since as early as 2009. While Coca-Cola agreed to change some of its labeling and marketing of Vitaminwater, including the addition of “see nutrition facts for more detail” on all its bottles, the CSPI believes misleading claims regarding the sugary beverage are far from resolved.

3. Plastic Lumber
> Company: American Plastic Lumber, Inc.
> Industry: Construction

California-based American Plastic Lumber Company (APL) manufactures building materials from recycled plastics and other synthetics. The decking composite is advertised as an alternative to more conventional wood materials, boasting far less maintenance, easier installation, and a lower price tag, all with an appearance of wood. While these advantages are fair considerations for builders, many customers have likely chosen APL for its image as an environmentally friendly company. The APL logo is a milk jug topped by a tree superimposed on three rotating green arrows — the universal symbol of recycling. And many of APL’s advertisements have suggested its products are made entirely of recycled materials. APL described its lumber as “the environmentally responsible solution to all of your lumber needs.” In fact, the lumber contains an average of less than 79% re-used content. As a result of the finding, the FTC prohibited APL from making such claims in June last year — its second complaint against the company.

4. PS Vita
> Company: Sony Corporation
> Industry: Technology

When Sony’s PlayStation Vita launched in early 2012, the handheld console touted a slew of new and exciting features that it claimed would change the face of portable gaming. The problem was that most of these new features did not work as advertised. One of the most exciting features was a “cross-platform, remote play” feature, in which users playing a game on a PS3 would be able to switch over to the Vita and take the game on the go. Unfortunately, not only did most games not offer this functionality, but in the case of the few that did, a user would have to buy two copies of the game. While this alone would have likely been enough to merit legal action from the FTC, Sony also apparently engaged in some underhanded marketing tactics. The company also hired advertising agency Deutsch LA, whose employees allegedly engaged customers on Twitter by posing as impartial consumers and promoting the Vita. The agency has been prohibited from this kind of conduct in the future. As part of the settlement, anyone who purchased a Vita before June 1 2012 earned a $25 refund or a $50 voucher from Sony.

5. Snapchat
> Company: Snapchat, Inc.
> Industry: Media

Snapchat is a smartphone application designed to send disappearing photos, or “snaps,” to friends. In May 2014, the FTC charged the company with misleading consumers into believing the photos would actually disappear forever, when there were actually a number of simple ways to preserve the snaps. The FTC also accused the company of misrepresenting the extent to which it collected personal information, including geolocation data. The FTC’s final settlement was reached in December last year and requires Snapchat to adopt a privacy program to be monitored by a third party for the next 20 years. This was not Snapchat’s first misstep. Earlier in that year, Snapchat leaked the phone numbers and names of millions of users. The incident was particularly embarrassing for the company, as it dismissed a security warning it received shortly before the leak.

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6. Red Bull
> Company: Red Bull GmbH
> Industry: Food and Beverage

Energy drink maker and extreme sport sponsor Red Bull paid $13 million to settle a false advertising suit in August last year. The settlement also provided $10 cash or $15 in Red Bull product for customers who purchased a drink from January 2001 through October 3 2014. According to plaintiffs, Red Bull’s slogan, “Red Bull Gives You Wings,” is an unmet promise. Few people believe Red Bull will actually give you wings, and the effects of Red Bull are difficult to deny. The problem is Red Bull’s claim that its product will improve physical and mental performance beyond the benefits offered by coffee or other caffeine products. Like several other companies charged with false advertising, Red Bull cited numerous scientific studies in support of its claims, when no such studies existed.

7. Lancôme Génifique/L’Oréal Paris Youth Code
> Company: L’Oréal USA
> Industry: Cosmetics

Companies in the world of cosmetics often make ambiguous, difficult to verify claims about the effects of a product. If a cream claims to reduce wrinkles or make skin glow over time, the effects might not be the same in all cases, it might not work for all people, or it might not work at all. The effects of these products are often difficult to verify. So when a beauty product company is sued by the FTC for making false claims about the effects of its skin cream, those claims are likely to be egregious. This was true in the case of L’Oréal USA and its “Lancôme Génifique” and “L’Oréal Paris Youth Code” lines. L’Oreal marketed its product by saying that the skincare line was clinically proven to “boost genes’ activity and stimulate the production of youth proteins.” The company had no evidence for such a claim, and was barred from making any statements about products affecting genetic makeup without proof.

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8. Smart Balance Margarine
> Company: Smart Balance Inc.
> Industry: Manufacturing

In a letter to Smart Balance from the Center for Science in the Public Interest, the dairy-free butter alternative company was accused of making illegal and deceptive claims. The company stated plant sterols contained in its product helped block cholesterol, a claim featured prominently on Smart Balance labels, though it has since been removed. The statement was also illegal, as cholesterol reduction is a medical claim reserved for products intending to prevent and treat disease. Smart Balance does not contain the level of plant sterols necessary for such a promise. In a 2012 California class-action lawsuit, Smart Balance was sued for a similar claim. Not only does the product contain a relatively high amount of cholesterol in the first place, but a person would have to consume an entire tub of the butter every day to ingest the necessary amount of plant sterol for health benefits.

9. Jungle Rangers
> Company: Focus Education, LLC
> Industry: Computer Games

Following a recent trend, several companies now sell software or games that claim to improve focus, intelligence, or the ability to multitask or think creatively. Lumosity is perhaps the most visible of a variety of new programs or products claiming to limber up the brain. While there is a degree of skepticism among scientists that any of these sorts of claims can be substantiated, one game developer so blatantly fabricated claims that they provoked legal action from the FTC. Focus Education, LLC, a Texas-based software manufacturer, settled a lawsuit this January after claiming that its ifocus System, which featured the Jungle Rangers computer game, was effective at improving the focus and brain power of children. Jessica Rich, director of the Bureau of Consumer Protection, said, “Many parents are interested in products that can improve their children’s focus, behavior, and grades, but companies must back up their brain-training claims with reliable science.” The company reported game sales of approximately $4.5 million over the course of 2012 and 2013.