This paper examines the legal and ethical dimensions of false advertising under U.S. business law, with a focus on bait-and-switch tactics. It explains how the Federal Trade Commission (FTC) defines and prohibits deceptive advertising practices, outlines the binding nature of advertisement terms, and clarifies what constitutes a bona fide offer. The paper also discusses the ethical failures that underlie false advertising and illustrates these concepts with a real-world case: the FDA-mandated corrective advertising campaign against Bayer's YAZ birth control commercials. Together, these elements demonstrate why truthfulness and evidence-backed claims are fundamental requirements in lawful advertising.
It is both ethically and legally important to remain truthful in advertising. Companies are not permitted to attract customers through false advertisements. Legally speaking, a company can face legal action for promising something it does not intend to deliver, or for changing the terms of delivery once a customer makes a demand. Several times, businesses — especially small business owners — may use bait-and-switch advertising tactics to attract customers, and this can give rise to serious legal issues.
Bait-and-switch advertising is strictly forbidden by law, and consumers are protected against such practices through various Federal Trade Commission (FTC) guidelines. The terms of an advertisement are binding according to FTC rules. The FTC clearly states that when a product is advertised, it must be available at all mentioned outlets at the price stated in the advertisement. A person may be accused of false advertising if the product is no longer available when a customer arrives to purchase it, if the seller attempts to sell it at a higher price, or if another product is offered in its place. All of these actions are considered bait and switch.
The FTC clearly defines bait-and-switch advertising as: "…an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised." [Section 238.0]
Since the offer made in an advertisement must be bona fide in nature, any breach of advertisement terms can be viewed as a violation of consumer laws, and a person can be accused of false, fraudulent, or bait-and-switch advertising. The terms of an advertisement are binding because the law clearly states that: "No statement or illustration should be used in any advertisement which creates a false impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another." [Sec. 238.2]
It is also established that if the initial contact between seller and consumer was secured through deceptive advertising, such conduct constitutes a violation of the law. For this reason, advertising terms are binding and must be treated as such. If a seller refuses to sell the advertised product after securing that first contact, there is a strong likelihood that the consumer will be harmed. This behavior demonstrates that the seller was not making a bona fide offer, which is again contrary to advertising law.
"FTC truth, fairness, and evidence requirements for ads"
"Ethical failures underlying false advertising practices"
"FDA-ordered corrective campaign against Bayer's YAZ ads"
Always verify citation format against your institution’s current style guide requirements.