What happens when you cross the advertising “puffery” line? Skechers shoe company recently found out. They had to fork over a cool $40 million thanks to a class-action lawsuit over some claims made in their ads.
A $40 million class-action settlement against Skechers shoes should serve as a cautionary tale to all online marketers. The warning: Don’t Make Incredible Claims if You Don’t Have the Proof! Not only could ignoring this warning result in a scuffle with the FTC, but customers – with visions of greenbacks dancing in their heads — could entangle you in a costly false advertising lawsuit.
Judge Thomas B. Russell, of the Kentucky Federal Court, affirmed a false advertising class-action against Skechers. A passel of lawyers, two primary plaintiffs and about 520,000 claimants cumulatively earned $40M – all because Skechers’ ads arguably crossed the truthiness line. In an effort to get people to plunk down cash for their sneakers, Skechers promised consumers their shoes would boost weight loss and sculpt stronger muscles. After some back and forth, Skechers denied allegations but settled to avoid costly, protracted litigation.
Be sure not to cross the Puffery line
We live in an advertising panopticon. At every turn, we’re bombarded with pleas to try this, buy that, and visit there. So, in order to stick out, advertisers strive to speak to our vulnerabilities and joys, in the hopes an emotional connection with a products’ promise will compel spending.
But you can’t say anything you want in advertisements. You can’t lie about your product or your competitors’ products, and you can’t use language that blatantly misleads the public. But you can exaggerate a bit, and, say, call the pizza made at your pizzeria, “The World’s Greatest Pizza!” This is called puffery.
To put it simply, puffery is effusive, unquantifiable, self-serving flattery. The jerk in the office who always brags about his latest gadget or girlfriend? He uses puffery. Legally speaking, the line between puffery and false advertising is thin, It’s also dependent on what type of product you marketing. For example, DSHEA rules govern dietary supplements, whereas people in the data broker business should make sure they’re familiar with the Fair Credit Reporting Act and its effect on allowable assertions in marketing material.
Where The Skechers Class-Action Lawsuit Money Goes
How did the $40 million award get divided? The lawyers who brought the case split $5 million; the two lead plaintiffs walked away with $2,500 and the approximately 520,000 eligible claimants are entitled to refunds for the following products:
- Shape-ups – $80
- Resistance Runners – $84
- Podded sole shoes – $54
- Tone Ups – $40
If any of the claimant money is left over, the FTC gets the remaining funds.
Laws Online Marketers Should Review To Ensure Compliance
If you want to make sure your online advertising efforts are compliant, review the Dot Com Disclosures. It’s the Federal Trade Commission’s Internet advertising bible. The document explains in detail what you can and cannot do when advertising online or via mobile devices and social media. Reading the Dot Com Disclosures – cover to cover – is essential for all online marketers. It covers questions like:
- How do advertisements need to be labeled?
- What types of ads need disclosures and what do those disclosures have to say?
- How must advertisements on social media sites, like Twitter and Facebook, be marked?
- Is it possible to hide disclosures?
- Will using lots of legalese in my advertising disclosures help me or hurt me?
If you advertise online and need a marketing compliance lawyer, get in touch. Kelly Warner is a full-service law firm with a dedicated digital advertising legal team. If you are ready to talk, you can either give us a ring at 1-866-570-8585 or find us on skype at aaronklaw. If email is your thing, shoot us a message at firstname.lastname@example.org or use this form. Talk to you soon.