False Advertisement and
Deceptive Trade Practice

California Deceptive Trade Practices Laws

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Deceptive trade practices involve misleading information, unfounded claims, and various strategies designed to deceive consumers into purchasing products or services. For instance, a common example includes a used car dealer manipulating an odometer to advertise a lower mileage falsely. While California has not implemented the Uniform Deceptive Trade Practices Act, it enforces specific statutes that outlaw false advertising and odometer fraud.

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What is Deceptive Trade Practice?

Manufacturers and retailers invest heavily in marketing, often making grand claims about their products or services. These claims are legal as long as they aren’t deliberately misleading or outright false. A deceptive trade practice refers to actions by an individual or business designed to deceive consumers into purchasing a product or service. Notorious examples of such fraudulent activities include false advertising and odometer tampering.

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Almost every state has laws against deceptive trade practices. Typically, these laws empower the state attorney general to pursue legal action against violators. Some states also allow individuals and groups to initiate private and class action lawsuits. Some states permit a civil penalty of up to $25,000 and injunctions for violations, and affected individuals can sue for triple the actual damages or $1,500 (whichever is greater), plus court costs and attorney fees. 

 

Several states have adopted the Uniform Deceptive Trade Practices Act (UDTPA), which facilitates class action lawsuits and other remedies for those likely to be impacted by a deceptive trade practice. For example, if a car dealer falsely advertises low-mileage used cars and is found to be tampering with odometers, and if this advertisement is broadcast on local TV, everyone in the viewing area is considered "likely to be damaged" by the misleading claim.

 

Examples of Deceptive Trade Practices:

Deceptive trade practices defined by state laws often include, but are not limited to, the following:

• Misrepresenting the source, sponsorship, approval, certification, accessories, characteristics, benefits, or quantities of a product or service.

• Advertising products as new or original when they are, in fact, deteriorated, altered, reconditioned, reclaimed, or used

• Falsely claiming that certain services, replacements, or repairs are necessary.

• Advertising goods or services without the intent to sell them as advertised or without sufficient stock to meet reasonably expected demand.

• Tampering with the odometer of a vehicle to show fewer miles than actually driven.

• Selling goods or services under the guise that they are associated with another brand (e.g., selling counterfeit items).

• Falsely representing goods or services as having endorsements or certifications they do not possess.

 

These examples highlight the need for consumer vigilance and legal oversight to prevent deceptive practices that can harm the public.

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False Advertisement Laws

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False advertising can take various forms, all of which expose the advertiser to potential legal challenges. These challenges can arise from disgruntled customers through civil suits or from the government in the form of criminal charges. Under California state law, it is illegal for advertisements to be false or misleading about goods and services. Here are some typical examples of illegal advertising practices:

 

• Deceptive Pricing: An example of this is a fictitious "sale" where a business plans to sell chairs at $50 each but initially marks them as $100 for two days. Subsequently, they offer a "50% off sale" to sell the chairs at the intended $50 price, misleading customers about the original price and the nature of the sale.

• Bait and Switch: This occurs when a seller advertises a product at a very low price to attract customers. However, when the customers arrive, the advertised item is unavailable, but a similar, more expensive item is available for purchase.

• Low Stock: Similar to bait and switch, this tactic involves advertising an item at a low price while having only a limited quantity available. The goal is to draw in customers with low-priced items and then encourage them to purchase more expensive alternatives when the advertised product runs out.

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False Advertising in General [17500 - 17509]

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It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.

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