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When Your Business Is Sued: Understanding False Advertising And Customer Compensation

28 November 2016

Deann Miles

If you find your business on the defensive end of a lawsuit, it's time to consult with an attorney that can help. Anyone with some time on their hands can file a lawsuit against your company, and this means you may end up in court for any number of reasons. If you have a customer claiming that you advertised a service or product and made false claims, it's possible that they have a viable lawsuit. The customer will have to prove that they have suffered a financial loss because of the advertising, and not simply be irritated that they thought they got a bargain when they didn't. Marketing for your business can be tricky, and angry customers can decide to file a lawsuit to address sketchy advertising.

When You Stretch the Truth About a Product

An easy way to understand false advertising is when you consider a hair loss prevention product. If the product claims that you will once again grow hair on your head after a set amount of days, and no hair grows, you can claim that the advertising was false. While many people realize that the claims made by product manufacturers are often exaggerated, the customer has a potential claim that they can pursue. The problem with a lawsuit is that the customer is only out the cost of the product, a sum that is generally not worth filing a lawsuit over. When the manufacturer offers a full refund if not satisfied, this negates the need to file a false advertising lawsuit.

If the Customer Loses Substantial Money

In the event you are selling a high-end product and you lie in the advertising, you may be sued by customers because of this. For example, if you sell a $10,000, "authentic, diamond and gold ring", and the buyer discovers it's a cubic zirconia, you can be sued for false advertising. It will be worth the legal costs to sue your company for $10,000, and the customer may also be able to get legal fees awarded in the process.

The bottom line is there must be a financial loss when it comes to making false claims about your product. This is why it's important to avoid advertising that can be misleading to consumers. It isn't against the law to describe a product in grand terms, as long as you offer a refund to customers if they are not satisfied. For more information and advice on how to avoid lawsuits, contact a lawyer at a law firm such as Vandeventer Black LLP.

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