“False Advertising” Laws in California (Business & Professions Code § 17500 BPC)

California has enacted some of the strongest consumer protection laws in the nation. One of them is Business and Professions Code § 17500. This section makes it a crime to engage in false or deceptive advertising to consumers about the nature of a product or service.

This covers false or misleading statements in

• print,
• digital, or
• any other advertising media.

A conviction is a misdemeanor that carries a maximum sentence of up to

• 6 months in jail and
• a fine of up to $2500.00.

The full text of the statute reads as follows:

17500. It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.

Examples of false advertising are when:

• A t-shirt company advertises that all of its t-shirts are “Made in the U.S.A.” when they actually come from another country.
• A pharmaceutical company advertises that a product is “clinically proven” to have certain benefits when no such proof exists; and,
• A beverage company advertises that its new flavored water is “calorie-free” when it actually has 100 calories per bottle.

Penalties

A person or company that violates this section is guilty of a misdemeanor. The offense is punishable by:

• Imprisonment in the county jail for up to six months; and/or,
• A fine not to exceed $2,500.

A person or company guilty of false advertisement may also face a civil lawsuit and/or an injunction.

Defenses

Luckily, there are several legal defenses available if a person commits a crime under this section. These include showing that an accused party:

• was truthful in its advertising,
• did not deceive, and/or
• acted without knowledge.

Our California criminal defense attorneys will answer the following key questions in this article:

• 1. When does “false advertising” become a crime in California?
• 2. What are common defenses to the charge?
  • 2.1 Truthful Advertising
  • 2.2 No Deception
  • 2.3 No Knowledge
• 3. What happens if a person is convicted of 17500 BPC?
• 4. Can you sue for false advertising in California?
• 5. Are there crimes related to Business & Professions Code 17500?
  • 5.1 Internet Fraud
  • 5.2 Mail Fraud
  • 5.3 Mislabeling of Food

1. When does “false advertising” become a crime in California?

California Business and Professions Code 17500 prohibits false advertising.

A prosecutor must prove two things to show that a person or company is guilty of this crime.

These are:

1. The person or company made a false or misleading statement in connection with a service, product or the sale of a service/product/property; and,
2. The person or company knew, or should have known, that the statement was false or misleading.¹

A statement is considered false or misleading if members of the public are likely to be deceived.² The determination of whether or not a public member is deceived is based upon the facts of a given case.³

The second element above is referred to as knowledge. The falsity of an advertisement has to be known, or should have been known, by the defendant for a BPC 17500 conviction. If an ad simply contains a mistake, that error would not likely be considered a violation of the law.

This section applies to advertisements that are run across a wide range of communication channels. These include:

• Television;
• Radio;
• Print publications – like newspapers and magazines;
• Websites, blogs, and the internet; and,
• In-person solicitations.

2. What are common defenses to the charge?

A person accused of false advertising under BPC 17500 may challenge the accusation by raising a legal defense. A good defense can often get a California false advertising charge reduced or even dismissed. Please note, though, that is critical for an accused to hire an attorney to raise a defense on his behalf.

Three common defenses are:

1. Truthful advertising,
2. No deception, and/or
3. No knowledge.

2.1. Truthful Advertising

A false or misleading advertisement has to be just that – false or misleading. Thus, the truth is a solid defense to this crime. As stated above, if an ad simply contains a truthful mistake, that error would not likely be considered a violation of the law. Further, some advertisements contain negative messages.

However, if the messages convey the truth, the ad is not considered criminal.

2.2. No Deception

Please recall that California law says a member of the public must be deceived by an ad for that ad to be considered false or misleading. This is a very broad and subjective standard. Typically, therefore, a defendant can use the facts of a case to show that the advertisement did not deceive the public.

2.3. No Knowledge

Please recall that there can be no conviction for false advertising unless the accused knew, or should have known, that an ad was false or misleading. Thus, it is an acceptable defense for an accused to prove that he did not have this requisite knowledge.

3. What happens if a person is convicted of 17500 BPC?

A person or company that violates California Business and Professions Code 17500 is guilty of a misdemeanor.⁴ The offense is punishable by:

• Imprisonment in the county jail for up to six months; and/or,
• A fine not to exceed $2,500.⁵

A person or company guilty of false advertisement may also face a civil lawsuit and/or an injunction.

An injunction is a court order that requires a person or company to either:

1. Do a particular act, or
2. Refrain from doing a particular act.

In the context of a false advertisement, an injunction is typically an order that prohibits a company from running a deceptive ad.

4. Can you sue for false advertising in California?

Yes. Victims of false advertising may sue the business for financial damages. In order to prevail in a false advertising lawsuit in California, the plaintiff would need to prove:

1. The defendant lied about a material fact;
2. The plaintiff purchased the product or services based on this lie; and
3. The plaintiff suffered financial harm as a result.⁶

5. Are there crimes related to Business & Professions Code 17500?

There are three crimes related to false advertising. These are:

1. Internet Fraud,
2. Mail Fraud, and
3. Mislabeling of Food.

5.1. Internet Fraud

Internet fraud is a blanket term that describes several different fraud crimes that all involve the use of the internet or computers. Some of these can be prosecuted under California law in California state courts. Others are federal crimes. Some are both California and federal crimes and may be prosecuted in either California or federal court.

The most common types of internet fraud categories include:

1. Fraudulent schemes (carried out through email or the internet);
2. “Phishing” (using email or the internet to obtain sensitive information like social security numbers or credit card information); and,
3. Accessing a computer or computer data without permission.

Penalties for these frauds will vary depending on the type of crime, or fraud, committed. They can be charged as either a

1. misdemeanor,
2. a felony, or
3. a wobbler offense.

A wobbler is an offense that can be charged as either a misdemeanor or a felony.

Further, the penalties for an offense will vary depending on the specific fraud committed. Possible penalties include:

• Imprisonment for months, years, or even decades; and/or,
• Fines up to several thousands of dollars.

5.2. Mail Fraud

Mail fraud, also known as postal fraud, is a serious federal crime. A person can be charged with mail fraud if the authorities believe that he used a United States post office or even a private mail carrier to send or receive any materials related to a scheme to commit fraud.

A prosecutor has to prove three elements to show that an accused is guilty of mail fraud. These are:

1. There was some scheme to commit fraud;
2. The defendant used the mail to further the scheme; and,
3. The defendant had the specific intent to commit fraud.⁷

The penalties for mail fraud can grow quite severe. They can include:

• Up to twenty years in jail; and/or,
• Fines up to thousands of dollars.⁸

5.3. Mislabeling of Food

Mislabeling of food is a crime in California under Health & Safety Code 114087 HS.

A prosecutor must prove three elements to convict a party of this crime. These are:

1. A retail establishment presented food for human consumption;
2. The establishment presented it in a way that misled or misinformed a consumer;⁹ and,
3. The establishment acted either intentionally or with criminal negligence.¹⁰

Please note each of these elements involves some technical legal definitions and/or showings. This means defenses to this crime do exist.

Mislabeling of food is a misdemeanor in California. The penalties could include:

• Misdemeanor (summary) probation;
• Up to six (6) months in county jail; and/or
• A fine between $25 and $1,000.¹¹

Legal References