False, exaggerated, or deceptive representations in advertising are illegal under both California and federal law.
Under the Federal Trade Commission Act, advertising must be truthful and non-deceptive; advertisers must have evidence to back up their claims; and advertisements cannot be unfair. An ad is deceptive if it contains a statement - or omits information - that is likely to mislead consumers acting reasonably under the circumstances; and is important to a consumer's decision to buy or use a product.
California's unfair competition law protects both consumers and competitors by promoting fair competition in commercial markets for good and services. In order to prevail in a lawsuit in California, a plaintiff must show that:
(1) the statements in the advertising are untrue and misleading, and
(2) the defendants knew, or by the exercise of reasonable care should have known, that the statements were untrue or misleading.
To succeed on the merits of a false advertising claim, a plaintiff need only show that members of the public are likely to be deceived.
Some examples of deceptive marketing practices include auto scams, deceptive credit cards, deceptive health insurance, deceptive employment scams, energy drinks, IRA fees, mortgage scams, payday loans, expiration of pre-paid gift cards, pharmaceutical drugs, travel scams, unauthorized billing, and many others.