DEFINITION of 'Marketing Fraud'

Illegal practices perpetrated by a company in the promotion of a product or service. Marketing fraud often centers around making false claims. This includes exaggerating the qualities of a product or service, selling imitations as the genuine article, or hiding negative aspects or side effects.

BREAKING DOWN 'Marketing Fraud'

The internet is fertile ground for marketing fraud because of the anonymity and the ability to spam messages into inboxes and across message boards and blogs. That said, marketing fraud is one of the oldest types of fraud, going much further back than the snake oil salesmen who sold tonics that were "absolutely, 100% guaranteed to cure whatever ails you."

Consumers can usually protect themselves by adhering to the old adage, "if it sounds too good to be true, it probably is."

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