Although it denies any wrong-doing, Red Bull has agreed to pay $13 million to settle a class action lawsuit alleging the company falsely promoted its line of products. If the Court approves the settlement, it will mark the largest food industry settlement since Dannon paid $35 million in 2010 to settle claims against its Activia yogurt products. Red Bull is expected to pay an additional $5 million in plaintiff attorney fees.
The terms of the settlement dictate that anyone who purchased a Red Bull product since January 1, 2002, and fills out the required claim form, will qualify for a $10 cash payment or a voucher redeemable for $15 of Red Bull products.
The suit alleges that the company mislead consumers by indicating their product provided specific advantages over more traditional sources of caffeine, thereby persuading consumers to purchase their product for a premium cost. The company denies the charges and is prepared to vehemently defend its product and marketing claims.
False and Misleading Advertising
The term false advertising refers to an omission of facts, or a misrepresentation of facts that is likely to cause a reasonable consumer to make a choice they probably would have not made under similar circumstances. The Federal Trade commission and other laws mandate that companies and businesses advertise their products and services in a clear, truthful, and unambiguous fashion, allowing consumers to make objective and well-informed choices.
In addition to facing legal and financial repercussions from the Federal Trade Commission, a company that participates in false advertising could lose substantial amounts of money in legal fees, money paid to consumers if they are sued, and ads that must be pulled.
Allegations of false advertising also destroy trust consumers have placed in their favorite brands and companies. Feeling betrayed, customers will turn to other companies for equitable products or services. This translates into lost revenue and a potentially bad reputation which will hurt business in the future.
Additionally, false advertising claims can cause physical, emotional, and/or financial harm to consumers. Consumers with special dietary restrictions can be injured by omitting product ingredients, and consumers in general, can waste money paying premium prices for products and services that don't deliver as promised.
Call Our National Consumer Class Action Lawyers at (215) 278-4449
If you have experienced injuries or financial losses caused by false or misleading advertising, you may be able to participate in a class action lawsuit to recover those damages. Regardless of the amount, no consumer should have to bear these losses. We at Golomb Legalcan help!