The Truth About False and Deceptive Advertising

How to keep ads from getting the best of you (and your wallet).

How to keep ads from getting the best of you (and your wallet)

Regardless of what kind of company produces it, an ad that claims its product or service will make something overly simple or cause the consumer to quickly build wealth could be a "tip off to a rip off," according to Mary Engle, head of the Federal Trade Commission's Advertising Practices Division. "In areas like weight loss and exercise, consumers should be suspicious of any claim that says fast or easy," Engle says. "The company may have a small study or rely on some science, but the claims are so greatly exaggerated beyond what the product can actually do."

Consumers should also be wary of advertised financial services that promise to quickly reduce financial burdens such as a mortgage or other debt. "Most of the problems we see there are that they are just false rip-offs, and all they want to do is get your financial information," Engle says. Also pay close attention to testimonials from people who have had extraordinary results. "Is that really representative of what consumers will get or is this a one-in-a-million example?" Engle says.

[Read: When to Give Out Your Social Security Number, How to Protect It.]

"Advertising shouldn't be deceptive and if [ads] use disclosures, they have to be clear and prominent," Engle says. "And what that means is that if it is on the screen or presented in audio, it needs to be big and clear enough so that a consumer will notice and have time to read and comprehend it. If it's just a blur on the screen, they are pretty much saying 'but not really' in the fine print."

Lastly, pay attention to advertised money-back guarantees and the claims they make. "We settled a case last year with this product called the Ab Circle Pro, an abdominal exercise device," Engle says. "For three minutes a day, you were supposed to work out with this product and get nice abs. Their claim was 'Lose 10 pounds in two weeks or your money back.' To us, they were claiming that users were going to lose 10 pounds in two weeks." Companies willing to lie about products may also be more likely to lie about money-back guarantees, so take caution, she adds.

How you can take action. Experts recommend researching the items that catch your eye before making any investments to protect yourself from deception. Be sure to turn to trusted and reliable organizations. "You can go online and look at product reviews, but be careful because we have seen that some companies will put up websites that appear to be independent reviews," Engle says. "You can get a sense for the place or the product, but you should be skeptical of the ones that are the most or least glowing." The Federal Trade Commission has a host of readily available consumer-protection information about what to look for in ads based on past cases and general reports.

[Read: How Credit Card Companies Spot Fraud Before You Do.]

Consumers who feel they have been deceived by an advertised product or service have several ways to help right the wrong. Individuals can complain to the FTC either through an online complaint form or by calling the organization directly. Additionally, they should complain to the Better Business Bureau, "and complain to the company, which should actually be the first step because legitimate companies are going to respond to consumer complaints, while most frauds will not," Engle says.

Many industry-specific products and services are regulated outside the FTC, so if a consumer is interested in making sure others are not scammed in the future, Brien suggests going to the designated regulating agency, such as the Food and Drug Administration or the Department of Transportation. State attorney generals will enforce Unfair or Deceptive Acts or Practices regulatory proposals, although the extent may vary among states.

Engle's final piece of advice? "Look for advice from reliable organizations, do business with companies you know and trust, and complain if you don't get what is offered."