Unfair Trade Practices Under Consumer Law: What Counts as Misleading Advertising
A celebrity fronting a misleading advertisement can no longer plausibly claim they were "just doing their job" — CCPA's framework specifically extends liability to endorsers who fail to exercise reasonable diligence before putting their name behind a product's claims.
What counts as an unfair trade practice
The Act defines unfair trade practices broadly, covering conduct such as making false representations about the quality, standard, or grade of goods/services, false claims of sponsorship or approval, misleading pricing representations, and other practices that deceive or mislead consumers about material aspects of a transaction. This is a broad umbrella concept that has been progressively expanded to address newer commercial practices, including specific e-commerce-related conduct.
What makes an advertisement "misleading"
Under CCPA's guidelines, a misleading advertisement is one that:
- Falsely describes a product or service.
- Gives a false guarantee that is likely to mislead consumers about the true nature, substance, quality, or quantity of the goods/services.
- Conveys an express or implied representation that would constitute an unfair trade practice, or deliberately conceals important information.
Penalties for misleading advertisements — and who can be penalised
What "due diligence" means for an endorser
CCPA's guidelines expect an endorser to make reasonable efforts to verify the claims being made in an advertisement before lending their name/image to it — this doesn't require the endorser to conduct independent scientific testing, but does expect more than simply accepting a brand's claims uncritically, particularly for claims that would reasonably prompt a diligent person to seek further verification (specific health or efficacy claims, for example).
How this connects to influencer marketing specifically
As influencer marketing has grown, CCPA's endorsement guidelines have taken on particular relevance for social media influencers, not just traditional celebrity endorsers — including specific requirements around disclosure of material connections (paid partnerships, free products received, or other commercial relationships) so that audiences can properly assess whether a recommendation is a genuine, independent opinion or a paid promotional arrangement.
Practical implications for brands and endorsers
Brands engaging endorsers should build claim-substantiation documentation into their advertising process, ideally sharing supporting evidence with the endorser rather than simply providing a script to read — and endorsers, particularly those doing significant volume of paid endorsement work, should establish their own basic verification practice for claims they're being asked to make, given their own direct, personal regulatory exposure under this framework.