Identify marketing deception (fraud?) before you become a victim

Recently, I heard a certain radio ad bombard my favorite New York subway news station. I love this station for a few simple reasons: it’s smart, it’s funny, and it plays John Sterling/Susan Waldman Yankee commentary on games this season.

However, this particular radio ad stuck with me because it was full of misleading marketing language and made me angry every time it played. Not only would this bring a bad name to my profession, but it would potentially trick thousands of naive consumers into signing up and falling victim to what I would almost consider a fraud. But it might not even be found guilty of deceit because of being too subtly manipulated, since every statement is true. But this is absolutely misleading, with unsuspecting listeners interpreting these “true” statements as good reasons to respond to the ad and commit to using the ad’s service, only to later discover how naive they were in making such a gullible decision.

Let me explain: The ad begins with a tone of authority, claiming that it can save American car owners thousands of dollars in car repairs. As long as your car has less than 200,000 miles on it (as most people do), you’ll never have to pay for car repairs out of pocket again! Advertisers will pay you. If you’re tired of spending your hard-earned money on auto repairs, give us a call to see if you qualify! (This puts the onus on you to prove you’re one of the eligible owners with fewer than 200,000 miles, which they can use to trick you into making a purchase.)

You can even keep your own mechanic or auto repair service and let advertisers pay the bills for you. This includes all the most advanced auto tech repairs you could ever need! (Again, they say this to throw you off track, so you have to think about what kind of repairs your car might need now or in the future, and whether you qualify.) So far, other than “save you,” Everything they say with the exception of maybe a few thousand dollars” is true. Until you read between the lines.

No, you don’t spend your hard-earned money on car repair bills. Instead, you’ll be spending your hard-earned money paying them to represent you and pay for your car’s repairs. While they claim you’ll save a lot of money, actually having them as a middleman might cost you more. After all, they are in business to make money. They don’t do it for nothing. How are they going to pay for these expensive radio commercials on such a powerful New York station? Only through the response of hundreds of unsuspecting customers who signed up in droves.

So what do you get out of it? If you signed the contract and didn’t pay them, there could be a lot of trouble and who knows what else! Possibly they’re making it look like they’re giving you great service by assuring they’ll pay for repairs on your old clunker (less than 200,000 miles), which allows you to keep driving and hopefully keep working (if you still have a job) while they wait for you to pay interest (possibly late)!

I’m guessing with all the finer details, but you can see the risks I’m pointing out. I recall hearing about a similar fraud attempt by another car payment company in the past few years through the mail. Then I got a series of telemarketing calls about it. Now, I hear another company’s ad on the radio. Could it be the same organization just operating under a different name? Ironically, as soon as I recognized it, all of a sudden I couldn’t hear it anymore, which could also be part of their formula: run it for a short time to amass new customers, then disappear without a trace . These are the questions I ask because I’m naturally suspicious of marketing claims that raise these red flags.

The concept is a lot like what a credit card offers: You pay with your card, and you pay interest to the credit card company because they graciously let you pay in installments. But we all know that there are huge risks posed by unresolved economic problems everywhere, both for a country and for the world! If you are one of the unlucky people who have lost the privilege of using any or all of your many credit cards, this ad for a car repair payment service might sound appealing, especially if old Bertha makes a horrible noise and Jeopardize your commute. But I urge you to tread carefully and hold a big stick.

So, what exactly are the laws about deceptive advertising? According to the Federal Trade Commission’s (FTC) Bureau of Consumer Protection, three attributes determine whether an ad is false or unfair:

1. If it violates public policy;
2. If it is immoral, immoral, oppressive or unscrupulous; or,
3. Those who cause substantial damage to consumers.

This last point is considered the most important factor in gauging whether an ad is false or unfair, and if the ad is not misleading in the first place, the customer’s loss is usually monetary loss due to a purchase that would never have occurred. Misrepresentations are judged by whether they appear to be false; or whether they are implicitly false. It seems to me that the radio ad above claiming to save you a ton of money if you use their services is probably a blatantly false claim. However, with clever interpretation, if they attribute your savings to paying the auto repair supplier directly, that statement can be considered true.

if you don’t pay a mechanic directly For your car repairs, you’re actually saving that money. However, you will need to use the “saved” money to pay the auto repair payment company who will pay you the mechanic no matter how deceptively they advertise their services. Does that make you feel ethical? Also, I think the ad says “can save you” rather than “will save you”, which means there may be other conditions involved that you have to meet to ensure their claim is delivered as stated.

Based on the complaints received by the FTC, some consistent themes emerged, most commonly undisclosed costs and conditions. Responsible radio advertisers avoid legal problems by simply adding statements such as “restrictions may apply,” while some overzealous advertisers spend most of their radio advertising time detailing long-winded speeches delivered at breakneck speed. Disclosure, this doesn’t actually make sense of what’s being said. Depending on available space, the FTC recommends that advertisers using visual media disclose details “clearly and conspicuously.” If space is at a premium, perhaps the aforementioned 3-word disclaimer will suffice, but small print and deliberately ambiguous terms are frowned upon.

What the FTC allows or regulates appears to be a gray area, with decisions based on whether the ad is national or regional; whether it represents an industry regulated by another government agency (e.g., airlines, banks, insurance companies, public carriers and companies that sell securities and merchandise); or if it can be addressed by other more local agencies such as the Better Business Bureau. As noted earlier, what appears to be most important to the FTC are issues involving harm to consumers, whether “health, safety, or wallet.”

Penalties for non-compliance can be severe, ranging from a simple “cease and desist” order, escalating to $16,000 per day if the order is not properly followed; discretionary fines of millions of dollars, sometimes Also demand refunds to consumers affected by offending advertisements; place new advertisements and contact buyers to correct previous deceptive information.

If an ad has harmed you in any way due to deceptive conduct, you have the right to file a complaint with the FTC and contact an attorney. If the offensive advertisement is far-reaching, your case may be deemed eligible for a class action involving many plaintiffs in addition to you. Note, however, that no matter how dignified your legal representation may seem in such cases, it is usually the attorneys who stand to gain the most in a class action.

What if you think an ad from a competitor is deceptive? You have several options, some or all of which you may choose:

1. You can contact a lawyer to discuss whether you should sue for deceptive claims of unfair competition in the advertisement.

2. You may file a complaint with the National Advertising Division (NAD) of the Better Business Bureau Commission, which investigates and resolves such disputes nationally and regionally.

3. If the ad is local, you can contact your local Better Business Bureau to file a complaint.

4. You may contact the print or broadcast media where the advertisement was placed to report your suspicion that the advertisement is deceptive.

5. You can report the problem by contacting your state Attorney General’s office or your city, county, or state office of consumer affairs.

6. Finally, you can contact the Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, DC 20580; or call: Toll Free 1-877-FTC-HELP.

As marketing experts advise, if you’re an advertiser using ambiguity or, worse, duplicity techniques to obscure the full truth of your message, keep the following in mind:

“After the sweetness of low prices is forgotten, the bitterness of low quality remains.” – Benjamin Franklin

Translation: An unhappy customer will not only share his unpleasant experience with his friends and family, but also spread bad things about you in blogs, forums and chat rooms, giving your company a negative reputation that you can never live with Today’s Google-dominated universe. If your advertising misconduct is unintentional, it is much less costly to win back the loyalty of a dissatisfied customer with an effective complaint than to try to survive the devastating winter of his dissatisfaction.

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