False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. Truth in labeling refers to essentially the same concept, that customers have the right to know what they are buying, and that all necessary information should be on the label.

Hidden fees and surcharges

Service providers often tack-on fees and surcharges that are not disclosed to the customer in the advertised price. One of the most common is for activation of services such as mobile phones, but is also common in broadband and telephony. Other fees are taken from gift cards and bank accounts. In most cases, the fees are hidden in fine print, though in a few cases they are so confused and obfuscated by ambiguous terminology that they are essentially undisclosed.

This may also occur with the bait-and-switch tactic. BellSouth, for example, often advertised DSL service at low prices and with no installation charges, but in many of the same areas offered only FITL/FTTC service, which requires installation of separate Ethernet wiring into the home at significant cost.

Cable and telephone customers in the U.S. are often hit with a "regulatory cost recovery fee" (among other names), which sounds like it is mandated by the government, but which is actually the provider charging the customer for having to abide by the law. These are allegedly for local number portability and the Universal Service Fund, however consumer advocates allege that, because these fees are totally unregulated and are often well above what the companies are required to contribute, these fees are simply being used to skim extra profit from subscribers.

Mail-order companies often hit customers with "shipping and handling" charges not included in the stated price, and only show at the very end of a TV commercial.

Rebates

main: rebate (marketing) Rebates were originally intended to pass savings directly from the manufacturer to the consumer. However in the U.S. they have become probably the biggest way to trick shoppers into paying more than the advertised price. Stores advertise a "sale" price and note only in the fine print that it is not the price at which it is actually sold for, but instead an "after rebate" price, which also fails to include sales tax. Many rebate fulfillment companies have been accused of intentionally reneging on obligations to return money to the customers.

Inflated price comparison

In comparing a sale price to a "regular" price for the same product, advertisers can inflate the "regular" price in order to create the impression that the sale price is very low. The intent is obviously to mislead consumers into thinking that they are saving money by purchasing the "on-sale" item or service by advertising a large-percentage "discount". Some clothing stores in particular have essentially every item on "sale", and some grocery stores advertise "savings" over their "regular" prices for those using loyalty cards (which allow the stores to track their purchases).