Product misrepresentation

and exploitation of
weaknesses + health fraud
Unethical Marketing strategies
By: Tanvi and Anirudh
Volkswagen: Actively Faked Emissions Standards
Volkswagen Golf TDI Old Wives Clean Diesel Commercial

→Volkswagen developed an entire marketing campaign around its line of diesel vehicles
claiming that they were “clean diesel.” The campaign relied heavily on emissions test results that demonstrated the cars’
supposedly low levels of pollutants.

→When the cars were operating under controlled laboratory conditions - which typically involve putting them on a
stationary test rig - the device appears to have put the vehicle into a sort of safety mode in which the engine ran below
normal power and performance. Once on the road, the engines switched out of this test mode.

→The result? The engines emitted nitrogen oxide pollutants up to 40 times above what is allowed in the US.

→However, in 2016 it was found that Volkswagen had fitted the entire line of cars with “illegal emission defeat devices
designed to mask high emissions during government tests”. The "defeat device" - or software - in diesel engines that could
detect when they were being tested, changing the performance accordingly to improve results.

→Once the fraud was discovered, the FTC forced the company to compensate consumers who had bought the cars assuming
they were environmentally friendly. The manufacturer ended up offering full compensation packages to the 600,000 US
Volkswagen owners affected by their deception.

Fine: → With VW recalling millions of cars worldwide from early next year, it has set aside €6.7bn (£4.8bn) to cover costs.
That resulted in the company posting its first quarterly loss for 15 years of €2.5bn in late October.
 L'Oreal claimed its skincare products were "clinically
proven" to "boost genes.” https://www.youtube.com/watch?v=Xn4BaFd29ZE
→In a US-wide advertising campaign that utilised multiple media outlets, L’Oreal
USA claimed that its Lancome Genefique skin care product was “clinically
proven” to “boost genes’ activity and stimulate the production of youth proteins
that would cause “visibly younger skin in just 7 days”, and provide results for a
specific percentage of users.

→L’Oreal Paris Youth Code ads also prominently featured and relied upon a bar
graph labelled “Clinical Study”, which purported to show that the products
targeted specific genes to make skin act younger and respond five times faster to
“aggressors” such as stress and fatigue.

→ According to the FTC, the claims were "false and unsubstantiated." In the settlement, L'Oréal USA was banned from making claims
about anti-aging, without "competent and reliable scientific evidence substantiating such claims," the FTC said. Though L'Oreal
escaped a fine at the time, each future violation of this agreement will cost the company up to $16,000.

→They utilised consumer’s weakness to try products that would help them look more “aesthetically beautiful” and therefore the
consumers were inclined to believe in the strength of the product regardless of its plausibility.-- preyed on consumers' fears about the
impacts of aging on their looks . In a related vein, ads for L’Oréal Paris Youth Code heralded the “new era of skincare: gene science”
and told consumers that they could “crack the code to younger acting skin.”
 Lumos Labs said Luminosity could
help prevent Dementia
→Lumosity preyed on consumers' fears about age-related cognitive
decline, suggesting their games could stave off memory loss, dementia,
and even Alzheimer's disease,” & Luminosity said in its ads that people
who played the games for more than 10 minutes, three times a week
would release their "full potential in every aspect of life,” according to
Time. Jessica Rich, a director at the FTC said: "“Lumosity simply did not
have the science to back up its ads."

→Lumosity’s marketing is ubiquitous. As the FTC described its system,

customers were put through their paces for a recommended 15 minutes
a day, several days a week, on more than 40 online games featuring
memory and other cognitive challenges.

→In January 2016, the makers of popular brain-training app Luminosity

were given a $2 million fine from the Federal Trade Commission, which
said the company deceived players with "unfounded" advertising claims.
The app company made false claims about being able to help prevent
Alzheimer's disease, as well as aiding players to perform better at
school, the FTC found.
 Health fraud in
advertising
What’s the difference between exaggeration of the truth and misleading information?

In the world of advertising, many brands appear to be clueless about the matter. Either that,
or deliberately cunning.
Kelloggs’ Special K
https://www.youtube.com/watch?v=X94M8jyEWZ4

→ The aforementioned culprit – Special K recently claimed that its porridge was “full of goodness”
and that its Nutri K Flakes were “nutritious”. However, the company failed to back up this message
with any specific health benefits or related ingredients.

→Interestingly, the branding on the Special K website is all about health and nutrition. Its latest
range is called ‘nourish’, which surely promotes the idea that the products benefit your health.

→This time, it cleverly uses this disclaimer to back it up: “*Special K Nourish is a source of vitamin D
and vitamin B2. Enjoy as part of a varied and balanced diet and a healthy lifestyle.” In other words,
that probably means you have to pair it with some kale to get the benefits.
Nesquik
https://www.youtube.com/watch?v=X94M8jyEWZ4

→Chocolate is a great start to any day, right?

Granted, what it isn’t is a healthy start to the
day.

→Kids’ favourite Nesquik got itself in hot water last year with its misleading advert,
effectively encouraging poor nutritional habits in children.

→Despite defending its 20.2 grams of sugar with the claim that most of this comes from the
lactose in milk, the brand was rightly forced to remove the strapline.
The Takeaway:

→ Sometimes, companies will not only actively lie about their products but also
perform fraud to support their claims. You may not be able to spot these in advance,
even if you do your research. If you have been taken in by one of these dedicated
deceptions, your best option is to join a false advertising class-action lawsuit about
the product.