Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm News

Defining False Advertising

Author: Donald M. Pepe

Date: September 16, 2014

Key Contacts

Back

False advertising continues to be a problem in our society despite a myriad of laws against it. The primary reason for the difficulty rests with the inventive methods advertisers use to skirt the law. A number of methods produce the same results as false advertising, but either avoid violating the letter of the law or do so in a way that is largely unenforceable.

Defining False Advertising

A variety of federal and state laws seek to prevent false advertising.

Section 43(a) of the Lanham Act gives perhaps the most thorough guidance in a federal context. In order to prove a case of false advertising, the plaintiff must prove the following five elements:

  1. The defendant made false or misleading statements as to products;
  2. Either actual deception or a tendency to deceive a substantial portion of the intended audience occurred;
  3. The deception was material, meaning that it was likely to influence purchasing decisions;
  4. The goods that were advertised traveled in interstate commerce; and
  5. Likelihood of injury to the plaintiff.

Pricing-based Deceptions

One of the many methods advertisers employ that can result in accusations of false advertising is pricing-based deceptions, of which there are several distinct species.

  • “Liquidation” – There are a number of cases in which products sold at so called “liquidation sales” have turned out to be as expensive or more expensive than the same products would have otherwise been. By marking up the price “before” the sale and then “discounting”, advertisers are able to suggest serious savings. An added difficulty in liquidation sale cases rests on the improbability of collecting judgments where the guilty retailer is often out of business by the time a judgment is obtained.
  • Hidden fees – Service providers who attach fees that are not disclosed to the customer can also face false advertising charges. Adding charges on a bill in a way that might not be noticed or disputed is nevertheless an extremely common practice.
  • Misusing “free” – Any American reader will be familiar with a “buy one, get one free” sale, of BOGO.       Many consider this to be an example of false advertising because the second item isn’t actually “free,” it is included in the cost of the first.

Neiman Marcus

An interesting false advertising claim based on allegedly deceptive pricing was recently brought against high-end retailer Neiman Marcus Group in a class action lawsuit. The case presents a prime example of the difficulties encountered in precisely defining actionable false advertising under the law. Even if Neiman Marcus is ultimately vindicated under the letter of the law, such advertising methods, which clearly have the ability to deceive, raise moral issues worthy of King Solomon.

 The Neiman Marcus Group owns a chain of stores called Last Call, which boast in advertising the sale of off-season or excess clothing for discounts. The recent class action suit alleges that Last Call sold clothing that never appeared in a normal Neiman Marcus store, but still used a “compared to” strategy on the tag to contrast the discounted price with the putative full retail price. There is evidence that clothing sales at the outlet rose faster than the industry average, which lends some credence to the case, but it is possible that the case will fail because the customers who bought the clothing did so freely, assuming the piece of clothing acquired was worth the bottom line price on the tag, negating any real injury to the class. How the court comes down will set a precedent that will clarify this area of law going forward.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
NJ Real Estate Attorney Joe DeMarco Named in 2026 NJBIZ Leaders in Law List post image

NJ Real Estate Attorney Joe DeMarco Named in 2026 NJBIZ Leaders in Law List

Scarinci Hollenbeck is pleased to announce that NJ Real Estate Partner, Joe DeMarco, has been named a 2026 Leaders in Law Award Honoree by NJBIZ in the Real Estate: Construction, Environmental, Leasing category. The NJBIZ Leaders in Law program recognizes attorneys and general counsels whose professional accomplishments, leadership, and service to their communities demonstrate a […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "NJ Real Estate Attorney Joe DeMarco Named in 2026 NJBIZ Leaders in Law List"
John M. Scagnelli Re-Elected to LSRPA Board of Trustees post image

John M. Scagnelli Re-Elected to LSRPA Board of Trustees

Scarinci Hollenbeck is pleased to announce that Partner John M. Scagnelli has been re-elected to serve on the Board of Trustees of the Licensed Site Remediation Professionals Association (LSRPA) for an additional two-year term. LSRPA is the statewide professional organization representing New Jersey’s Licensed Site Remediation Professionals (LSRPs), playing a central role in advancing environmental […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "John M. Scagnelli Re-Elected to LSRPA Board of Trustees"
Robert E. Levy Re-Certified as Civil Trial Attorney by the Supreme Court of New Jersey post image

Robert E. Levy Re-Certified as Civil Trial Attorney by the Supreme Court of New Jersey

Scarinci Hollenbeck is pleased to announce that Robert E. Levy has been re-certified as a Certified Civil Trial Attorney by the Supreme Court of New Jersey. This re-certification, combined with Levy’s existing designation as a Certified Criminal Trial Attorney, places him among less than one percent of all certified attorneys in New Jersey to hold […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Robert E. Levy Re-Certified as Civil Trial Attorney by the Supreme Court of New Jersey"
Scarinci Hollenbeck Partner Donald M. Pepe Named to ROI-NJ’s 2025 Real Estate Influencers List post image

Scarinci Hollenbeck Partner Donald M. Pepe Named to ROI-NJ’s 2025 Real Estate Influencers List

Scarinci Hollenbeck, LLC is pleased to announce that Donald M. Pepe, a partner in the firm’s Real Estate, Land Use and Development Group, has once again been named to ROI-NJ’s Influencers: Real Estate list for 2025. Donald Pepe has been included on the ROI Influencers: Real Estate list each year since 2022, reflecting his continued […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Scarinci Hollenbeck Partner Donald M. Pepe Named to ROI-NJ’s 2025 Real Estate Influencers List"
Scarinci Hollenbeck Announces Three Attorney Promotions for 2026 post image

Scarinci Hollenbeck Announces Three Attorney Promotions for 2026

Scarinci Hollenbeck, LLC announces the promotion of three attorneys effective January 1, 2026: Samantha L. Blake and Brittany P. Tarabour to Counsel, and Kevin M. Cuddihy to Senior Associate. The following summarizes each attorney’s practice and experience. Samantha L. Blake Promoted to Counsel Samantha L. Blake has been promoted to Counsel and practices out of […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Scarinci Hollenbeck Announces Three Attorney Promotions for 2026"
NJBIZ Features Two Scarinci Hollenbeck Partners on the 2026 Commercial Real Estate Market Forecast post image

NJBIZ Features Two Scarinci Hollenbeck Partners on the 2026 Commercial Real Estate Market Forecast

Scarinci Hollenbeck real estate partners Donald Pepe and Joe DeMarco were recently interviewed by NJBIZ reporter Kimberly Redmond for a feature examining what may shape the commercial real estate market in 2026. The article explores several issues currently influencing development and investment decisions across New Jersey, including redevelopment considerations, regulatory and financing pressures, emerging asset […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "NJBIZ Features Two Scarinci Hollenbeck Partners on the 2026 Commercial Real Estate Market Forecast"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!