Download - 4.1 Deceptive advertising techniques
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Personal Finance
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• After today, you will be able to:– Identify some types of deceptive
advertising techniques that are used on consumers,
– List the signs of fraud– Take the proper steps to report instances of
fraud to the authorities.
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• Advertising that is likely to mislead consumers through false statements, omitted information, or other unfair means.
• It is ILLEGAL!• It can be stopped by the Federal Trade
Commission (FTC).• What are some examples that you
can think of right off hand?
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• Bait & Switch:– A sales tactic in which a bargain-priced item
is used to attract (bait) customers who are then encouraged to purchase a more expensive similar item.
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• Bait & Switch – Example – “Come in today and get a 2010 Chevrolet
Corvette for the low monthly payment of $250.”
– When you arrive to buy, they “can’t find” the car in the advertisement, and steer you to a higher priced alternative.
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• False Promise of a Free Gift– If a store promises a “free gift,” it must
actually be free, with no strings attached.– If you must purchase something to receive
the gift, they must use phrasing like “Free gift with purchase.”
– Example:•“If you attend our sales demonstration,
you will receive a free vacation.”
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• Deceptive Pricing– Advertising a “sale” price that is actually no
better than the product’s normal price– If a business claims that it has lower prices
than it’s competitor, it must show proof.– Example: A store advertises a sale on
toothpaste, when in reality, it is the normal price.
– Why would they do this?
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• Hidden Catches– Extra fees– Hidden restrictions– Surcharges– If there are any requirements to get a
certain price, then that must be clearly disclosed.• Example: An airline offers a “Bargain Spring
Break Airfare” package. After booking your tickets, you find out that you must pay a fee for seat selection, baggage, etc.
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• The deceitful conduct designed to manipulate another person for some gain.– Lying– Repeating something that you know is false– Concealing a fact that might save the other
party from being cheated
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• Pyramid Schemes– A person is asked to pay for the ability to
sell a particular item.– Mass-Marketing is legal, but must have a
valid product to sell.– The difference is that in a Pyramid Scheme,
you focus more on recruiting than selling.
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Chain Letters “Send $5 to the person who sent this letter
to you and send the letter to 5 other people or something bad will happen.”
Sweepstakes Earn Money at Home Online Auctions Someone asking for personal info
through email or text.
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• No address, or a temporary address• High Pressure Sales Tactics• Asking you to pay up front• If it sounds too good to be true, it
probably is…– There is no such thing as a free lunch!
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• If you suspect fraudulent behavior:– Report to the Federal Trade Commission– Contact the Better Business Bureau
•www.bbb.com
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• After today, you will be able to:– Identify some types of deceptive
advertising techniques that are used on consumers,
– List the signs of fraud– Take the proper steps to report instances of
fraud to the authorities.
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• Visit http://tinyurl.com/fraudresearch • Research one of the types of fraud• Complete 4.1 Fraud Project