Misleading advertising: what the law says

Service page: Class actions and consumer claims lawyer.

What exactly counts as misleading advertising under the law?

You saw a product advertised as “Original price NIS 500, now only NIS 200”? If NIS 500 was not the real price, this is an offense. The Consumer Protection Law, 5741-1981, prohibits in section 2 misleading a consumer (by act or omission, in writing, orally or in any other way) in any material matter in the transaction, including the quality, nature and price of the product; section 7 of the Law sets the liability for misleading in advertising. In practice, there are three common types of misleading: a false claim about facts, leaving out information the consumer is entitled to know, and creating a wrong impression about the price or quality of the product. The Law applies to every advertisement: a newspaper ad, a digital campaign, an influencer’s post, or a billboard.

Apart from the Consumer Protection Law, several authorities supervise advertising in their own fields: the Ministry of Health (medicines and nutrition), the Capital Market, Insurance and Savings Authority (investment and insurance advertising), and the Bank of Israel (credit and banking advertising). Each of them has powers under the law it is in charge of, sometimes alongside enforcement by the Consumer Protection and Fair Trade Authority.

Which ads are misleading? Examples from real life

An advertisement is considered misleading in several situations:

• (a) “A false claim about product features”: for example, advertising milk with the claim that it is “100% natural” when it contains added sugar or synthetic substances; advertising a medicine with the claim that it is “not addictive” when studies prove that it is
• (b) “Advertising about a price or a discount”: for example, “Original price NIS 400” when the price was never NIS 400, or “50% discount” when the discount applies only to certain products
• (c) “Misleading signs or symbols”: for example, using a photo of a higher-quality product than the one actually sold
• (d) “Leaving out significant information”: for example, advertising a medical treatment without stating its serious side effects.

Section 2(a) prohibits anything “likely to mislead” a consumer (by act or omission, in writing, orally or in any other way), so an “implied claim” may also be misleading, not only an outright lie. For example: an advertisement that says “helps treat the disease” without explaining what exactly it does, or a claim such as “safe to use” without supporting scientific data. An advertisement can be misleading even if every word in it is true, when the overall impression it creates may mislead.

What must a notice of a “sale” include?

A dealer (a business) that announces to the public or at the place of business a “special sale” must make clear which goods or services are included in it and which are not, what their price was at that dealer before the sale, the discount rate or the price after it, and the terms of the sale (section 15(a) of the Consumer Protection Law). In advertising outside the business, it must also state the minimum number of items offered in the sale and of the items offered at the maximum discount, except items whose sale price does not exceed NIS 50 (section 15(b1)). The dealer must hold reasonable stock, unless it stated otherwise in the notice, and once the stock runs out, it must as a rule stop advertising the sale (section 15(b2)–(b3)). A breach of these duties is grounds for a monetary sanction (section 22C(a)(32)–(34)).

Who is responsible for an ad, even if the advertiser did not know?

Under section 7(a) of the Consumer Protection Law, 5741-1981, in misleading advertising both the person on whose behalf the advertisement was made (usually the manufacturer, the importer or the business that sells the product) and the person who brought the matter for publication are treated as having breached the prohibition on misleading (section 2). This is true even if they hired an advertising agency that created the ad. The defense “I did not know and should not have known that the advertisement was misleading” is mentioned in the Law only when the Commissioner demanded evidence for the facts in the advertisement and it was not presented (section 7(b)), and the distributor or the person who actually decided on the publication is liable when the advertisement is misleading on its face or when they knew it was misleading (section 7(a)(2)).

Public figures who appear in an advertisement (actors, athletes, professionals) are not immune either: a person “who brought the matter for publication and thereby caused it to be published” is considered to have breached the Law alongside the advertiser (section 7(a)(1)), and whether a celebrity falls within this definition is decided by the circumstances of the case.

What can the Authority do? Orders, fines and consequences

When the Consumer Protection Authority, the Ministry of Health, the Capital Market Authority or another body discovers misleading advertising, it has several powers:

• (a) An order to stop the advertising: immediate stopping of the publication
• (b) A correction order: a duty to publish a correcting notice on a scale similar to the misleading publication, in order to correct the wrong impression
• (c) A monetary sanction: for misleading under section 2(a) or misleading advertising under section 7(c): NIS 45,000 for a corporation (adjusted: NIS 53,070 in 2026) and NIS 25,000 (NIS 29,490) for someone who is not a corporation, under section 22C(b) of the Law; 1.5 times in aggravating circumstances (section 22D) and an addition of 50% for a repeated breach (section 22J). In a criminal proceeding, a fine of up to NIS 204,400 or one year’s imprisonment (section 23(a))
• (d) Removing products from the shelves: mainly in the field of food and medicines when there is a concern of harm to health.

Beyond administrative enforcement, consumers who were harmed can file civil claims for monetary compensation. If the harm affects a wide group (for example, tens of thousands of customers who bought a product on the basis of a false price), this can be conducted as a class action.

When can a company defend itself against a claim over misleading advertising?

In some cases a company can defend itself against a claim of misleading advertising, with arguments such as: (a) when the Commissioner demanded evidence for the facts in the advertisement, proof that the advertiser did not know and should not have known that the advertisement was misleading (section 7(b)); a lack of intent to mislead does not in itself exempt from civil liability, because the prohibition on misleading applies to anything “likely to mislead” (section 2(a)); (b) the claim in the advertisement is true in the context in which it was made: for example, an advertisement that says “no artificial added sugar” is true if the product indeed contains no artificial sugar, even if it contains other sugar; (c) a general marketing statement (puffery): an advertisement that includes general statements or subjective assessments (such as “the best product in the world”) is usually not considered misleading, because consumers understand that it is an opinion and not a fact.

The courts in Israel recognize the distinction between marketing exaggeration (puffery), meaning marketing claims that nobody expects to be accurate, such as “the best product in the world”, and factual claims. “The best taste” is an opinion. “50% less sugar than the competitors” is a fact that must be supported by data.

How much can you claim? Compensation for a consumer harmed by misleading advertising

Under section 31(a) of the Consumer Protection Law, 5741-1981, a breach of the Law, including misleading advertising, is treated as a civil wrong under the Torts Ordinance [New Version], so a consumer who bought a product because of misleading advertising may sue for compensation. This may include:

• (a) A full refund of the purchase price
• (b) Compensation for actual damage: for example, expenses caused by using a product that did not work as advertised
• (c) Exemplary damages without proof of damage under section 31A of the Law, up to NIS 10,000, and up to NIS 50,000 for a repeated or continuing breach or in aggravating circumstances, but only for the causes of action listed in that section (for example failure to return money after cancellation of a transaction), and not for every case of misleading advertising.

When the misleading affects a wide group (for example, tens of thousands of consumers who bought a product on the basis of a “100% safe” claim that was not supported), a class action can be filed. A claim against a dealer in a matter between it and a customer is a recognized cause of action for a class action (item 1 of the Second Schedule to the Class Actions Law, 5766-2006).

Medicines, investments and children’s products: fields with especially strict rules

In certain fields, the requirements for advertising are even stricter:

• (a) Medicines and food supplements: advertising preparations and food is also subject to health laws and to the supervision of the Ministry of Health, and a claim of “effectiveness” or “safety” without support may be misleading
• (b) Advertising aimed at minors: it is prohibited to publish an advertisement that may mislead a minor, exploit their age, naivety or lack of experience, or encourage an activity that may harm their body or health (section 7A)
• (c) Financial services (insurance, investments, credit): also subject to the directives of the relevant financial regulator, alongside the prohibition on misleading in the Consumer Protection Law.

Influencers, Instagram and TikTok: what does the law say about hidden advertising?

An influencer’s post on Instagram, a reel on TikTok, or a YouTube video in which a product is shown in return for payment is advertising in every sense. The Consumer Protection Law applies to them exactly as it applies to a newspaper ad. Section 7(c)(1) of the Law provides that an advertisement that may lead a reasonable person to assume that what it says is not an advertisement is misleading advertising, even if its content is true, so an influencer must disclose clearly that the content is sponsored: “#פרסום” (#ad) or a clear statement of a commercial collaboration. Such a publication without marking may be an offense (section 23(a)(3)), even in a 15-second story.

Did an advertisement mislead you? The next steps

When a consumer or an authority discovers misleading advertising, there are several possible routes:

• (a) A complaint by a consumer or a consumer organization: the Consumer Protection and Fair Trade Authority will examine the complaint and decide whether to take action
• (b) An application for an injunction: a consumer who was harmed, and also a dealer harmed by the misleading in the course of its business, may also ask in their claim for an order to stop the advertising, because a breach of the Law is a civil wrong under the Torts Ordinance (section 31(a)–(a1) of the Law and section 71 of the Ordinance); a temporary order requires, among other things, showing that it will be difficult or impossible to do full justice at a later stage (section 73 of the Ordinance). The Attorney General or the Commissioner for Consumer Protection may ask the court for an order to prevent an offense under section 30 of the Law
• (c) A consumer claim: one consumer or a group can file a claim for compensation for the damage caused by buying the misleadingly advertised product
• (d) A criminal proceeding: in serious cases the advertising body can be prosecuted for the offense of misleading a consumer under section 23(a)(1) of the Consumer Protection Law (one year’s imprisonment or a fine), and in suitable cases also for obtaining something by fraud under section 415 of the Penal Law, 5737-1977.