False advertising
Ads or labels that are false or misleading in a way that matters to buyers. The FTC and states enforce the rules, and consumers usually sue under state laws.
Also called: deceptive advertising, misleading advertising, false labeling
Ads or labels that are false or misleading in a way that matters to buyers. The FTC and states enforce the rules, and consumers usually sue under state laws.
What it means
False advertising is advertising or product labeling that is false or misleading in a way that matters to a buyer's decision. It includes outright lies, such as a false claim about what a product contains. It also covers claims that are technically true but leave a false impression, and leaving out important facts. Federal law treats an ad as false when it is "misleading in a material respect." That depends on what the ad says, what it suggests, and what it leaves out.
The Federal Trade Commission enforces the federal ban on deceptive practices. Its test asks two questions. Is a practice likely to mislead a reasonable consumer? Is it material, meaning likely to affect the buying choice? The Lanham Act also allows false advertising suits, but only by businesses that suffered a commercial injury, not by shoppers.
Consumers usually sue under state consumer protection laws, known as UDAP laws. Class actions over labels such as "natural," "zero sugar" or "made with avocado oil" are typical examples.
What it means for you
Most false advertising class actions you will see are about a label or ad claim that influenced your purchase. Settlements often pay a small flat amount per product. A few items may need no receipt, and more may need one. That is because it is hard to put a dollar figure on a misleading label. Check the product names and purchase dates in the class definition. Keep receipts and photos of packaging, since proof can raise your payout. Companies usually deny wrongdoing in these settlements, and the court has not decided who is right.
Example
Say a hypothetical snack company prints "zero sugar" on a bar made with a sweetener that buyers say counts as sugar. A shopper sues under state consumer protection law, claiming the label misled people and that they paid more because of it. If the company settles, the notice might let anyone who bought the bar during a set period claim a flat amount per product. Buyers who kept receipts might get more.
FAQ
Usually under state law, not the federal Lanham Act. The Supreme Court has said a consumer who is misled into buying a disappointing product cannot use the Lanham Act, which protects commercial interests. State consumer protection laws often allow consumer lawsuits, and many false advertising cases are brought as class actions.
The Federal Trade Commission enforces the federal ban on unfair or deceptive practices. State attorneys general enforce state consumer protection laws.
Related terms
- 15 U.S.C. 55: definition of false advertisement (Cornell LII)
- Lexmark International v. Static Control Components, Inc. (U.S. Supreme Court, 2014) (Cornell LII)
- Congressional Research Service: UDAP Enforcement Authority Under the FTC Act (IF12244)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.