False advertising is any type of advertising that deceives consumers. Even advertising that only has the potential to be misunderstood by consumers may be construed as false advertising. In most cases, false advertising leads the consumer to believe that he is somehow profiting from a purchase. He may think he is getting a good deal, saving money, or buying something that will perform in a specific manner. Actually, the advantage is all on the side of the advertiser and companies who practice false advertising. Any potential benefit to the consumer is usually non-existant.

Due to many instances of false advertising, the US Federal Trade Commission (FTC) has regulatory power to step in and end any potentially misleading or deceptive claims. False advertising does not apply to claims made by politicians, though many argue it should. Instead the FTC determines incidences were the potential to deceive exists in any type of advertising. If claims made in advertising could lead to a purchase because of misunderstanding of the product or service, it essentially has the potential to deceive.

In order to report false advertising, people must have a copy of the original ad to send to the FTC, or to state bureaus. The ad must prove a potential to deceive. This usually doesn’t mean that a person will be able to sue for false advertising, though they may be able to stop certain types of claims being made, or get their money back for a product or service they purchased. Usually the FTC steps in to require the advertiser to add more information to any ads or on product labels, or asks the advertiser to stop an ad campaign. The FTC cannot issue warrants for arrest or impose fines unless the advertiser does not stop incidences comply with its requests.

There are many types of false advertising that consumers see on a regular basis. A common form is called inflated price comparison. In this form, retailers raise the price of items, and then offer them for a lower “sale” price, which indicates to most consumers that they are getting a “deal” on merchandise since it is supposedly on sale. Inflated price comparison might be used when customers have “loyalty cards,” to grocery stores or retail stores of a certain size. Cardholders are able to purchase products at presumed discounted prices. While sometimes loyalty cards can save a little money, they don’t when other product prices are inflated.

Another common type of false advertising is a product sold with a rebate. The rebate is not given at point of purchase, but instead must be claimed by the purchaser, and unfortunately some companies are notorious for not giving rebates back in a timely manner. When the advertisement doesn’t claim that the price is “after rebate,” you can expect to pay the full price.

Services that offer introductory prices may be potentially deceptive when ads don’t explicitly state that the price will increase after the introductory period has expired. Other forms of false advertising include making false claims about products, e.g., "Georgia" peaches grown in California. Using fillers in packaging is also false advertising because it can increase weight, making the consumer feel he is getting more of the actual product than is really in a package. Many companies now attempt to avoid false advertising by stating conditions of offers. Unfortunately these may be printed in small print, far from the advertised price. As a wary consumer, it makes good sense to always look at conditions and exclusions prior to making a purchase.