While companies attempt to put on a friendly face to entice customers, things are often different behind the scenes as evidenced by 11 companies that caught lying to the public or deceived customers. The world has probably never been as competitive as it is right now. Every day, businesses start up and every day, businesses fold over. It’s a dog eat dog world, and only the most ruthless companies make it to the top. If you want to learn more about these ruthless companies, head on over to the 10 most ruthless companies in business today. One way companies gain an advantage over their competitors, and also their consumers, is by lying, which is why you’ll often see companies lying to public, often by employing misleading advertisements 2019. If you want to learn about false advertising examples 2019 and false advertising examples 2018, feel free to check out some of the crushing examples we presented in this article.
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There is often a thin line between doing something unethical and illegal. Often, companies aim for the former, while engaging in the latter. If caught, they can face huge fines which could end up costing them billions of dollars in fines, and the lost trust of their customers. Some companies are able to navigate through this period, while others just fail and crumble. Of the companies caught lying to the public, many are now giants in their field and well-known companies in their own right.
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Did The Boeing Company (NYSE:BA) lie about 737 Max? What kind of legal and punitive penalties should we expect? Will this have any material effect on The Boeing Company’s long term stock price? You probably remember BP p.l.c. (NYSE:BP)’s Gulf of Mexico oil spill scandal from 2010. A BP executive told the public that only 5000 barrels of oil per day is leaking into the Gulf whereas independent scientists later on concluded that the actual figure was more than 60,000 barrels of oil per day. The public was so outraged about the oil spill and BP’s misrepresentation of the facts that Justice Department brought charges. Had the BP executive been found guilty, he could have faced a maximum prison time of 5 years. It’s been more than 9 years and BP’s stock’s performance has been similar to Exxon Mobil’s performance since then.
Corporations and their executives are rarely charged with criminal deception and lying. Most of the time these cases are settled out of court for a manageable financial penalty that’s paid by the stockholders (not the executives themselves) and the companies’ stocks usually resume their rise after a period of underperformance during the scandal.
It is common to see major companies fighting several lawsuits at the same time, with legal expenses making up a significant portion of their total expenses. Of course, many of them are quite frivolous, as people try to exploit the company in order to receive easy money, as companies try to avoid lawsuits which could damage their name or their brand. On the other hand, others are of a more serious natures, of which we’ll discuss more below. Out list of companies that caught lying to the public, deceived customers doesn’t include all the companies which have engaged in such activities, as that list would be never ending. Instead, we are going to mention some of the more interesting cases where companies engaged in questionable practices. So let’s start our list with number 11:
11. Facebook Inc. (FB)
Facebook is the biggest media company ever with around 2.5 billion unpaid part-employees who not only produce content for Facebook Inc. but also consume that content, view ads, and provide their private data for Facebook to exploit in countless ways. Facebook potentially lied to the public in 2018 during the Cambridge Analytica scandal. Nothing was proven in courts because Facebook settled and agreed to pay $5 billion but didn’t admit any wrongdoing.
10. Listerine
Listerine promoted their mouthwash as being a replacement for floss, a tall claim which was doubted by many initially, and then debunked, which resulted in them having to pull their ads which advertised their mouthwash being as effective as flossing.
9. Naked Juice
A company owned by Pepsi Co, Naked Juice claimed their juiced were ‘All Natural’, which was challenged in court and found to be untrue. Even though Pepsi Co. defended the claims, they ended up settling for $9 million and removing the ‘All Natural’ tag from their juices.
Pixabay/Public Domain
8. Olay
Olay indulged in misrepresenting their product, when they retouched a model’s photo for their eye cream, misleading customers to believe that the cream was responsible for the impossibly smooth skin. When found out, they changed the photo to an untouched one and apologized for the misrepresentation.
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7. salesforce.com, inc. (NASDAQ:CRM)
Saleforces has often engaged in unconventional ways to one up their competition, including going out of their way to sabotage them, which is what happened when Salesforce actually hired fake protesters to protest a conference held by their biggest rivals at the time, Siebel Systems.
6. Bing
While Microsoft Corporation (NASDAQ:MSFT)’s Bing has tried to stay relevant for years, it has ultimately failed to remove Google from its throne, which is perhaps why it had to resort to stealing Google search results and presenting them as its own.
Pixabay/Public Domain
5. Skechers
Taking deception to a whole new level, Skechers tried to be innovative in a way that wasn’t scientifically possible, claiming that their shoes helped burn calories which each step, which is technically true, but would hold true for every other shoe in the world as well. They ended up settling for $40 million.
Pixabay/Public Domain
4. News of the World
The downfall of News of the World made global headlines, headlines which it would have loved to report on. Initially considered a somewhat respectable news organization with a shady owner in Rupert Murdoch, investigators found out that News of the World was actually hacking phones of celebrities and politicians to get the latest dirt, which eventually led to their closure.
3. ABC Food Group
Involved in one of the biggest scandals to hit Europe and the UK in particular, investigators found out that horse meat was being sold as beef, with around 75% of samples containing horse meat. Some even had pig meat but was advertised as beef!
Valentyn Volkov/Shutterstock.com
2. Airbnb
Air bnb has made our collective lives easier, offering cheap and comfortable accommodations in locations around the world, allowing the company to grow exponentially especially in its formative years. However, the practices the company undertook to allow for such growth were not as savory as you might think. Case in point, Airbnb’s target audience was Craiglist’s userbase, and they couldn’t find conventional methods to lure the base away to their website. So they created a bot which automatically responded to Craigslist postings by telling the user to check out Airbnb as well, which helped them poach Craigslist customers.
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1. Volkswagen
Volkswagen tops the list of 10 companies that caught lying to the public, deceived customers, with a scandal that led to paying out over $25 billion in penalties, restitution and fines. So what exactly did Volkswagen do? They put in software in their cars which were designed to beat diesel tests, changing the results to ensure they did not cross the emissions threshold. They sold over 580,000 vehicles on their clean diesel initiative, and has become one of the biggest scandals globally to have ever occurred.
Pixabay/Public Domain
Disclosure: None. 11 Companies That Caught Lying To The Public, Deceived Customers is originally published at Insider Monkey.
