In the field of advertising, the line between promoting products and overstating the truth about the use of products is extremely fragile. Many major brands cannot recognize this boundary, abusing strong phrases such as “scientifically verified”, “100% guaranteed results”, and pay millions of dollars as well. his reputation.
Here are 18 examples of scandal in the advertising industry that has made many big companies wobble because of financial penalties, as well as outrage from consumers.
Uber – $ 20 million for misrepresenting the driver’s salary in its job post.
In 2015, Uber was “touched” by the FTC (Federal Trade Commission) for misleading drivers’ information about a driver’s salary in a job post. still working in Minneapolis can get $ 18 / hour, and in Boston $ 25 / hour.However, the actual number of drivers returned is about 10% lower.After 2 years of investigation, FTC decided to fine Uber $ 20 million and forced them to correct their employment information.
An Uber representative said: “We’ve made many improvements to enhance the driver experience over the past year. In the near future, we will continue to focus on perfecting the brand so that Uber is always the top destination for candidates who are looking for a new job.“.
Activia yogurt company – $ 45 million because it claims that its products contain “special sterilized materials” to sell at a higher price than competitors.
In 2010, the yogurt brand Activia was faced with a $ 45 million penalty for false advertising to sell products at a higher price than competitors. Specifically, Activia’s media campaigns emphasize that their yogurt has been “scientifically and scientifically proven” to help users improve the immune system as well as the digestive system. This large, they have calmly sold the product with a price 30% higher than other competitors.
However, after receiving complaints from many consumers and investigating the incident, Cleveland court declared the advertising information of Activia is false. At the same time, they must also remove phrases such as “scientifically proven” from future media campaigns.
DaftKings and FanDuel – $ 6 million for false advertising to cheat new players.
In 2016, two of the world’s biggest fantasy sports companies, DaftKings and FanDuel, were fined $ 6 million for false advertising. The lawsuits against the two companies are mainly focused on the problem they misinterpreted about the chances of winning by casual players and new players. Accordingly, professional or long-term players use automated computer scenarios combined with game script analysis data to collect a large sum of money from the prize.
According to the New York Justice Minister, the amount of fines for DaftKings and FanDuel is the highest penalty for vague, false advertising behavior in recent years.
Volkswagen – $ 15 billion because of the “slashing” of its cars running on clean, environmentally friendly oil.
In 2016, the FTC filed a lawsuit against Volkswagen also for false advertising, after the automaker said it had produced “Clean Diesel” models to protect the environment. This also means that they have cheated on the test of the level of emissions that the US has applied during the past 7 years.
The FTC said Volkswagen sold or leased more than 550,000 models it claimed to run on “Clean Diesel” and demanded compensation of $ 61 billion for violating the Clean Air law. However, after many negotiations, the fine for this car company is only $ 15 billion.
Tesco – $ 432 million for selling beef mixed with horse meat in some fast food products.
In 2013, the supermarket chain Tesco faced a wave of criticism regarding some of its food products. Accordingly, they used beef mixed with horse meat in hamburger and fast food products to sell to consumers.
Tesco then went on to make the mistake of publishing a 2-page article titled “What burgers have taught us“, along with the implication that” fake meat “has happened in the entire food industry, not just them – a blatant slander. The new article and campaign received a ban from ASA, followed by a £ 300 million ($ 432 million) penalty for the supermarket chain.
Red Bull – $ 13 million just for a figurative slogan but customers like to understand it literally.
In 2014, energy drink company Red Bull also faced a $ 13 million penalty for the slogan “Red Bull gives you wings” (RedBull will bring you wings – figuratively, of course). This includes compensation of $ 10 per customer, applied to those who have purchased their products since 2002. This slogan has been used by Red Bull during nearly 2 decades of operation, along with that. is a statement that their drinks can help users improve their reflexes and focus instantly.
Beganin Caraethers is one of RedBull’s longtime customers, has been with the brand for 10 years. However, he asserted that he did not “grow wings”, or have any physical changes as advertised by RedBull. RedBull then had to make a correction: “RedBull decided to impose a penalty to avoid heavier financial losses and the controversy surrounding this lawsuit. However, we assert that the brand of our marketing campaign is always clean, frank and accurate, with no signs of false advertising.“.
New Balance – 2.3 million dollars because of unfounded advertising, “wearing its shoes will help burn calories faster”.
In 2011, New Balance launched an advertising campaign with false information claiming that their new shoe model could help users burn calories. Meanwhile, scientific research shows that no matter what kind of shoes you wear, it will not work for your health.
New Balance says their sneaker models use hidden board technology, which can impact on the muscles of the buttocks, thighs, ligaments and lower legs. It is this false advertising that led them to a $ 2.3 million penalty on August 20, 2012.
Lumos Labs – $ 2 million because of “explosion” that their application will help users become smarter after just a short time.
In 2016, the “father” of Luminosity – a well-known application for training the human brain, received a fine of $ 2 million from FTC for unfounded advertising behavior. can prevent Alzheimer’s disease, help users learn better, and they are even more explosive when claiming customers only need to use the application for 10 minutes / day, 3 days / week. “Maximize potential in all areas of life”.
Jessica Rich, director at FTC said: “Luminosity does not own a team of experts, professional scientists who can stand responsible for their claims. “
Kellogg – $ 2.5 million because of vague, untested advertising.
In 2010, Kellogg’s famous Rice Krispies experienced a period of misery before accusations of misleading information about ingredients that improve the immune system in its products. FTC then forced Kellogg to stop all advertising campaigns using the information “Rice Krispies help improve young immune system thanks to 25% of nutrients and antioxidants – including vitamins A, B, C, and E“, because this information is a bit vague.
The case ended in 2011, and Kellogg agreed to pay $ 2.5 million in compensation to affected customers. In addition, they donated $ 2.5 million worth of products to charities.
Airborne – more than $ 30 million because of “flattering” of overproduction.
Functional foods Airborne can be considered one of the “national products” in the US in the 1990s. The brand’s marketing campaigns say their products can kill harmful bacteria and germs. , prevent common illnesses like the flu or a cold.
However, there is no research to prove the product effectiveness that Airborne advertises. Therefore, the Center for Science in the Public Interest of the United States entered the investigation to clarify the matter.
The scandal caused Airborne to face a total fine of over $ 30 million.
Wal-Mart – $ 66,000 for charging customers in New York higher than elsewhere.
In 2014, the supermarket chain Wal-Mart launched a discount campaign for soft drinks, with just US $ 3, users were able to buy 1 pack of 12 Coca-Cola cans. However, customers in New York have to pay a little higher, 3.5 USD / lot with the explanation given is because “road tax rates in this city a little higher”.
Attorney Eric Schneiderman, who conducted the investigation procedures, concluded that Wal-Mart violated New York State’s 349 and 350 business laws. Accordingly, they were fined $ 66,000 for charging customers at 117 stores in the city.
Hyundai – 85 million USD because “flattering” horsepower of some of its cars.
In 2004, Hyundai had to pay more than $ 85 million for fraudulent horsepower of some products exported to the US. About 840,000 customers were involved in the lawsuit, including buyers of Hyundai Elentra and Tiburon from 1996 to 2002. According to a survey by the Ministry of Transport, the automaker increased horsepower. about 10% in my media campaigns.
The lawsuit began in September 2002 in Southern California and lasted until 2004. After that, Hyundai also compensated affected customers with prepaid debit cards worth US $ 225 per person.
Kellogg – 4 million USD for one more “rabid mouth”.
It seems that Kellogg has not learned from his mistakes with cereal Rice Krispies. In 2013, they continued to follow their own footsteps when promoting new grain products Frosted Mini-Wheats that can help users become smarter, improve memory, ability to focus and many other functions. of children up to 20%.
Kellogg’s advertising campaign lasted 4 years, before they had to adjust the parameters on the product packaging. In addition, Kellogg did not forget to emphasize that they are one of the brands with extremely prestigious and transparent marketing history.
After all, Kellogg is still subject to a $ 4 million penalty, and compensation for those who buy this product from January 28, 2009 to October 1, 2009. Accordingly, customers will receive $ 5 / box of cereals that they have purchased, but only a maximum compensation of $ 15 / person only.
Extenze – 6 million USD because of unverified advertising information.
The next name on the list of false advertising companies is Extenze, a brand that makes “small boy” pills for men. In 2010, Extenze claimed its products “were scientifically proven. can enlarge certain parts of a man’s body “in some late-night broadcasts.
Extenze later agreed to a $ 6 million penalty, and had to correct the information: “Our claims have not been verified and evaluated by the US Food and Drug Administration. Extenze must not be used as a substitute for treatment of any disease“.
Splenda – Advertising is unclear, easily misunderstood.
In 2007, the American Sugar Association conducted an investigation of the slogan of the sweetener manufacturer Splenda: “Made from sugar.” According to this association, the above slogan is misleading, because Sweeteners are “chemical compounds produced in factories”, not necessarily sugar.
Splenda continued to be sued by rival rival Equal for the same reason. Equal expects the fine for Splenda to fall to around $ 200 million, because of the profits the company has made from its unclear advertising. However, the final verdict issued so far has not been disclosed in detail.
L’Oreal – False advertising
In 2014, cosmetics firm L’Oréal was forced to admit that the two lines of skin care products Lancôme Génifique and L’Oréal Paris Youth Code were not “scientifically proven” that could improve user genes, and for fairer skin for 7 days as they had advertised, according to FTC, L’Oréal’s ad was false and unfounded.
Subsequently, L’Oréal USA was prohibited from using advertising information related to anti-aging without specific proof. Despite escaping the sentence this time, but L’Oréal will have to pay up to $ 16,000 for each future recidivism.
Wrigley – 6 million USD because the advertising has not been verified.
In one of his ad campaigns, Wrigley announced that their Eclipse chewing gum sample contained new material – magnolia extract, with the ability to kill germs. This statement of course is not verified and causes misunderstanding for users. Many customers later sued the company, forced them to pay $ 6 million, and paid each user $ 10 in 2010.
Classmate.com – 9.5 million USD (1st time) and 11 million USD (2nd time) for online fraud.
Many users have already received email from classmate.com, with the content that some of their old friends are trying to reconnect with them, provided they have to upgrade the subscription to the “gold” level. However, this is really just a trick to “make money” from customers.
In 2008, Classmate.com was faced with a fine of $ 9.5 million, compensating $ 3 / user for false advertising, online fraud. However, by 2015, this website continued to go into the path of its own downfall and pity to pay an additional fine of $ 11 million.