California False Advertising Law (FAL) Explained

By Steve Levine · Updated July 2, 2026 · 8 min read

Quick Answer

California's False Advertising Law (FAL), Business and Professions Code § 17500 et seq., makes it unlawful for a business to make an advertising statement that is untrue or misleading — and that the business knew, or should have known with reasonable care, was untrue or misleading. Courts ask whether a reasonable consumer is likely to be deceived, and a companion section (§ 17501) restricts "was $X, now $Y" former-price claims to prices actually charged in the prior three months. Consumers suing under the FAL can win restitution (their money back) and an injunction stopping the practice, and FAL claims are almost always filed together with UCL and CLRA claims in consumer class actions.

On this page

What Is the False Advertising Law?
The "Reasonable Consumer" Standard
Fake Discounts and Former-Price Rules (§ 17501)
Remedies: Restitution and Injunctive Relief
How the FAL Fits With the UCL and CLRA
Frequently Asked Questions

What Is the False Advertising Law?

The False Advertising Law is California's core statute against deceptive advertising. Codified at Business and Professions Code § 17500 et seq., it makes it unlawful for any person or business, in connection with selling goods or services, to make or distribute an advertising statement "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."

Two features make the FAL broader than many people expect. First, it is not limited to lies: a statement can be literally true and still violate the FAL if it creates a misleading overall impression. Second, the "should have known" language means a business cannot escape liability by claiming it never checked whether its ad claims were accurate — reasonable care is part of the standard. The statute reaches essentially every advertising medium: product labels and packaging, websites and apps, price tags and shelf signs, email promotions, television, and social media. Willful violations are also a misdemeanor that public prosecutors (the Attorney General and district attorneys) can pursue with civil penalties, though the class actions OCA covers are almost always private civil cases.

Typical FAL fact patterns include product-quality and ingredient claims, "Made in USA" labeling — like the Olaplex Made in USA settlement — environmental and recyclability claims like the Hefty "recycling" bags settlement, and the fake-discount pricing cases covered in the next section.

The "Reasonable Consumer" Standard

Courts judge FAL claims by the "reasonable consumer" standard: the plaintiff must show that members of the public are likely to be deceived — measured against an ordinary consumer acting reasonably in the circumstances, not the most gullible or the most skeptical shopper. "Likely to deceive" means more than a bare possibility that some stray shopper might misread the ad; it asks whether a significant portion of reasonable consumers could be misled.

This standard cuts both ways. It dooms claims built on unreasonable readings of an ad, and it filters out "puffery" — vague, subjective boasts like "the best coffee in town" that no reasonable shopper treats as a factual promise. But it also means a defendant cannot hide behind fine print: if the headline claim, the packaging, or the displayed price creates a misleading net impression, a disclaimer buried elsewhere may not cure it. The same reasonable-consumer test governs claims under the companion Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA), which is one reason the three statutes travel together.

Fake Discounts and Former-Price Rules (§ 17501)

The FAL has a dedicated rule for "was/now" pricing. Under § 17501, a business generally may not advertise a former price for an item unless that price was the prevailing market price within the three months immediately before the advertisement — or the ad clearly, exactly, and conspicuously states the date when the former price actually prevailed.

This is the statute behind "fake discount" or "reference pricing" class actions. The alleged pattern is familiar: a retailer displays an inflated "original," "regular," or "compare at" price next to a marked-down "sale" price, but the item allegedly never sold — or rarely sold — at the higher price, so the advertised discount is illusory. Plaintiffs allege the phantom bargain induces purchases and inflates what shoppers are willing to pay. Outlet and factory stores draw many of these suits, because outlet merchandise is often made for the outlet and carries a "compare at" price the item allegedly never had; the Kipling outlet discount settlement resolved claims of exactly this kind. Online fast-fashion pricing has drawn similar claims — see the Shein false advertising class action — and strikethrough reference prices on tech and electronics sites were at issue in the HP pricing settlement. Other states police the same conduct under their own statutes, such as the Missouri Merchandising Practices Act (MMPA).

Remedies: Restitution and Injunctive Relief

Private plaintiffs suing under the FAL can obtain two things: restitution and an injunction. Restitution means returning money the defendant took from consumers through the misleading advertising — commonly measured as a "price premium" (the difference between what shoppers paid and what the product was actually worth without the misrepresentation) or, in fake-discount cases, the value of the discount shoppers were promised but allegedly never received. An injunction is a court order requiring the business to stop the challenged advertising or change its pricing practices going forward. The related equitable theory of unjust enrichment often appears alongside these claims.

What the FAL does not provide on its own: compensatory or punitive damages, or a statutory attorney-fee award. Standing also matters — since Proposition 64 (2004), a private FAL plaintiff must have actually lost money or property and relied on the challenged advertising; suing over an ad you never saw is not enough. These limits are a major reason FAL claims rarely stand alone: pairing them with a CLRA claim adds damages and fees, and pairing them with the UCL adds the broad "unlawful/unfair/fraudulent" hooks. Product-representation cases may also add breach-of-warranty theories — see express vs. implied warranty.

How the FAL Fits With the UCL and CLRA

California consumer class actions typically plead a three-statute stack, and each layer does distinct work:

· FAL (§ 17500): targets untrue or misleading advertising statements specifically. Remedies: restitution and injunctive relief.
· UCL (§ 17200): the Unfair Competition Law bans any "unlawful, unfair, or fraudulent" business practice — and because a violation of any other law counts as "unlawful," every FAL violation is automatically a UCL violation too. Remedies mirror the FAL: restitution and injunctions.
· CLRA (Civil Code § 1750): the Consumers Legal Remedies Act lists specific prohibited practices in consumer transactions — including misrepresenting a product's characteristics and making false price-reduction claims — and, unlike the FAL and UCL, authorizes actual damages, punitive damages in some cases, and attorney's fees, after a pre-suit demand letter.

In practice, the FAL supplies the advertising-specific theory (especially in pricing cases via § 17501), the UCL sweeps in everything else, and the CLRA carries the damages and fee-shifting that make class-wide relief economically viable. When these stacked claims settle, the result is usually a settlement fund paying class members cash refunds or vouchers plus an agreement to change the advertising or pricing practice — the kind of settlements listed on OCA's open settlements page.

Frequently Asked Questions

What is California's False Advertising Law (FAL)?

The FAL, California Business and Professions Code section 17500 et seq., makes it unlawful for a business to make an advertising statement about a product or service that is untrue or misleading, and that the business knew — or by exercising reasonable care should have known — was untrue or misleading. It covers essentially any medium: packaging, labels, websites, price tags, emails, TV, and social media.

What is the reasonable consumer standard?

Courts judge an ad by whether members of the public are likely to be deceived — measured against a reasonable consumer, an ordinary shopper acting reasonably under the circumstances. The ad does not have to be literally false: a technically true statement can still violate the FAL if its overall impression misleads, while obvious exaggeration or puffery that no reasonable shopper would rely on does not.

Are fake discounts and inflated original prices illegal in California?

They can be. Section 17501 restricts advertising a former price: a business generally may not advertise a former price unless it was the prevailing market price within the three months immediately before the ad, or the ad clearly states when the former price was actually in effect. Perpetual sales, inflated compare-at prices, and outlet-style reference prices for items never sold at that price are the basis of many fake-discount class actions.

What can I recover in an FAL class action?

Private plaintiffs under the FAL are limited to restitution (getting back money the business took through the misleading ad, such as a price premium or the value of a phantom discount) and injunctive relief (a court order stopping the practice). The FAL does not provide damages or attorney-fee awards on its own, which is why FAL claims are almost always paired with CLRA claims, which do allow damages.

How does the FAL relate to the UCL and CLRA?

The three statutes overlap and are usually pleaded together. The UCL (section 17200) bans unlawful, unfair, or fraudulent business practices, and any FAL violation automatically counts as an unlawful practice under the UCL. The CLRA (Civil Code section 1750) lists specific prohibited practices in consumer sales and, unlike the FAL and UCL, allows damages and attorney's fees. Together they are the standard trio in California consumer class actions.