18 false advertising scandals that cost some brands millions

Uber was forced to pay $20 million to settle claims brought to the FTC alleging the ride hailing service had inflated the hourly earnings for drivers in its online advertisements.

The FTC started investigating Uber in 2015 and finished its investigation at the beginning of 2017.

In a statement Uber said: "We’ve made many improvements to the driver experience over the last year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule."

Ads for Dannon's popular Activia brand yogurt landed the company with a class action settlement of $45 million in 2010, according to ABC News. The yogurts were marketed as being "clinically" and "scientifically" proven to boost your immune system and able to help to regulate digestion.

The Activia ad campaign, fronted by actress Jamie Lee Curtis, claimed that the yogurt had special bacterial ingredients. As a result, the yogurt was sold at 30% higher prices than other similar products. However, the Cleveland judge overseeing the case said that these claims were unproven.

The lawsuit against Dannon began in 2008, when consumer Trish Wiener lodged a complaint. On top of the fine of $45 million, Dannon was ordered to remove "clinically" and "scientifically proven" from its labels, according to ABC.

Phrases similar to "clinical studies show" were deemed permissible. Dannon denied any wrongdoing and claimed it settled the lawsuit to "avoid the cost and distraction of litigation."

The two biggest fantasy sports companies were ordered to pay $6 million each in 2016 to settle multiple false advertising lawsuits, Fortune reported.

At the heart of the complaints was that both companies misrepresented the chances casual and novice players had of winning cash prizes and the chance to earn positive returns on their entry fees. It resulted out of an investigation that showed professional and high-volume players used automated computer scripts and sophisticated statistical game theory to achieve huge payoffs.

According to a statement from the New York AttorneyGeneral the "settlement agreements impose the highest New York penalty awards for deceptive advertising in recent memory."

According to Bloomberg, the merger discussions between both companies is progressing.

In 2016, the Federal Trade Commission (FTC) filed a lawsuit against Volkswagen, which claimed the car company had deceived customers with the advertising campaign it used to promote its supposedly "Clean Diesel" vehicles, according to a press release.

The year prior, it was exposed that VW had been cheating emissions tests on its diesel cars in the US for the past seven years.

The FTC alleged that "Volkswagen deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly."

On top of potential fines for false advertising, the company could have to pay out up to $61 billion for violating the Clean Air Act, according to Wired.

The total settlement for Dieselgate was estimated to have reached $15 billion.

In 2013, UK supermarket chain Tesco was criticized after it ran a "misleading" ad campaign in the wake of its horse meat scandal, according to The Telegraph.

The supermarket had been caught selling beef contaminated with horse meat in some of its burgers and ready meals.

In an attempt to recover from the PR disaster, Tesco ran a two-page spread in national newspapers with the headline "What burgers have taught us."

In the ad, Tesco was criticized for implying that the whole meat industry was implicated in the horse meat fiasco, which was untrue. The UK advertising regulator ASA banned the campaign.

Nearly £300 million ($432 million) was wiped off the value of Tesco following the horse meat scandal, according to The Guardian.

Energy drinks company Red Bull was sued in 2014 for its slogan "Red Bull gives you wings." The company settled the class action case by agreeing to pay out a maximum of $13 million — including $10 to every US consumer who had bough the drink since 2002.

The tagline, which the company has used for nearly two decades, went alongside marketing claims that the caffeinated drink could improve a person's concentration and reaction speed.

Beganin Caraethers was one of several consumers who brought the case against the Austrian drinks company. He said he was a regular consumer of Red Bull for 10 years, but that he had not developed "wings," or shown any signs of improved intellectual or physical abilities.

Red Bull released this statement following the settlement: "Red Bull settled the lawsuit to avoid the cost and distraction of litigation. However, Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability."

New Balance was accused of false advertising in 2011 over a sneaker range that it claimed could help wearers burn calories, according to Reuters. Studies found that there were no health benefits from wearing the shoe.

The toning sneakers claimed to use hidden board technology and were advertised as calorie burners that activated the glutes, quads, hamstrings, and calves. Plaintiffs in the lawsuit claimed to have been harmed and misled by the sneaker company.

On August 20, 2012, New Balance agreed to pay a settlement of $2.3 million, according to The Huffington Post.

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. 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."

Kellogg's popular Rice Krispies cereal had a crisis in 2010 when the brand was accused of misleading consumers about the product's immunity-boosting properties, according to CNN.

The Federal Trade Commission ordered Kellogg to halt all advertising that claimed that the cereal improved a child's immunity with "25 percent Daily Value of Antioxidants and Nutrients — Vitamins A, B, C and E," stating the the claims were "dubious."

The case was settled in 2011. Kellogg agreed to pay $2.5 million to affected consumers, as well as donating $2.5 million worth of Kellogg products to charity, according to Law360.

Herbal supplement Airborne was a national hit throughout the 1990s. Marketing of the product claimed that it helped ward off harmful bacteria and germs, preventing everyday ailments like the flu and common cold.

There were no studies to support Airborne's effectiveness claims that met scientific standards — so the Center for Science in the Public Interest (CSPI) got involved.

The high-profile scandal ended with a huge settlement, with Airborne having to pay $23.3 million in the class-action lawsuit, and an additional $7 million settlement later, according to NPR.

Wal-Mart agreed to pay more than $66,000 in fines, after over-charging customers from 117 stores in New York for Coca-Cola. The supermarket chain had advertised a nationwide sale on the soft drink in 2014, where 12-packs would cost just $3.oo.

However, customers in New York State were charged $3.50. Wal-Mart staff allegedly lied about the reasons for the price-hike, telling customers that New York has a "sugar tax," according to Corporate Crime Reporter.

New York Attorney General Eric Schneiderman, who conducted the investigation, concluded the price violated New York State’s General Business Law 349 and 350.

Hyundai agreed to pay more than $85 million in a settlement in 2004, after it overstated the horsepower of cars imported to the US, according to Consumer Affairs. The class action lawsuit was on behalf of around 840,000 people who bought the 1996 to 2002 models of the Hyundai Elentra sedans and the Tiburon sport coupes.

In 2001, the Korean Ministry of Construction and Transportation had uncovered the misrepresentation, which, for some models, overstated horsepower by 10%.

The class action lawsuit was brought in southern California in September 2002. After it was settled in 2004, Hyundai sent letters offering prepaid debit cards to affected owners. They were worth up to $225.

In 2013, Kellogg was in even more trouble. The company agreed to pay $4 million for false advertising claims it made about Frosted Mini-Wheats. The cereal company had falsely claimed that the Mini-Wheats improved "children's attentiveness, memory and other cognitive functions," according to Associated Press. The ad campaign claimed that the breakfast cereal could improve a child's focus by nearly 20%.

In its defense, Kellogg said that the ad campaign ran four years previously and that it had since adjusted its claims about the cereal. Kellogg also noted that it "has a long history of responsible advertising."

People who consumed the cereal during the time the ad ran (January 28, 2009 to October 1, 2009) were allowed to claim back $5 per box, with a maximum of $15 per customer, according to Associated Press.

The maker of penis enlargement pill Extenze agreed to pay $6 million to settle a class action lawsuit in 2010, according to CBS. Extenze had claimed its pills were "scientifically proven to increase the size of a certain part of the male body" in notorious late night TV commercials.

Extenze agreed to pay $6 million to settle a false advertising class action lawsuit. CBS noted that its website was also updated to say: "These statements have not been evaluated by the Food and Drug Administration. Extenze is not intended to diagnose, treat, cure, or prevent any disease."

The Sugar Association asked for an investigation into alternative sweetener Splenda's "Made from Sugar" slogan. It complained that the tagline was misleading, and that the sweetener is nothing more than "highly processed chemical compound made in a factory," CBS reported.

In 2007, a resulting lawsuit led by the makers of rival sweetener Equal, settled against Splenda. Equal was looking for $200 million from Splenda in the settlement for unfair profits. However, the exact amount of the settlement remains confidential, according to NBC.

In 2014, cosmetics company L'Oréal was forced to admit that its Lancôme Génifique and L’Oréal Paris Youth Code skincare products were not "clinically proven" to "boost genes" and give "visibly younger skin in just seven days," as stated in its advertising.

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.

Eclipse gum claimed in its ads that its new ingredient, magnolia bark extract, had germ-killing properties.

A lawsuit brought by consumers alleged that the ads were misleading, according to Businessweek. Wrigley denied wrongdoing, but was ordered to pay more than $6 million to a fund that would reimburse consumers up to $10 each for the misleading product, in 2010.

Millions of people lit up when Classmates.com sent them an email saying old friends were trying to contact them, promising to rekindle old friendships and flames if subscribers upgraded to a "Gold" membership.

But with the upgrade, the expected reunions never came. It turns out the social networking site used the ploy to get users to give up extra dollars. In 2008, one miffed user filed a suit alleging the "deceptive" emails were false advertising. Classmates.com eventually agreed to pay out a $9.5 million settlement —$3 for every subscriber who fell for the dirty trick — to resolve the case, according to the Business Journal.

However, the website did not learn from its mistakes and in 2015 it was slapped with another $11 million in fines, according to Consumer Affairs.