For this list, we’ll be looking at companies that misled the public about their products or practices and faced several legal and financial consequences as a result. Were you personally affected by any of these stories?
Number 10. Visa and Mastercard
2018 was a bad year for credit card giants Visa and Mastercard. For many years, the companies had allegedly fixed the swipe fees that merchants must pay whenever customers use a credit card. Even worse, they dissuaded these retailers from accepting other forms of payment, meaning they were trapped and unable to avoid the fixed fees.
Millions of retailers launched a lawsuit against the credit behemoths, arguing that this violated trade laws. Turns out they were correct. In September of 2018, Visa, Mastercard and several banks were ordered to pay over $6 billion in restitution.
Number 9. Danone Yogurt
As Dan learned in 2010, you can’t just say whatever you want in regard to food products and expect the public to eat it up. No Fun intended. This French company released two yogurts in the mid 2000s called Dan Active and Activia. These were sold at a premium, as they allegedly contained ingredients that helped boost the immune system and aid in digestion.
Well, this was a load of nonsense, as these ingredients never passed clinical tests. So not only did the yogurt not do anything, but this regular, everyday product was falsely sold at a 30% markup. Danone was hit with deceptive advertising charges in order to pay $45 million in damages.
Number 8. Airborne
Dietary supplements and grifters often go hand in hand. Created in the early 90s, Airborne is a company that produces both dietary and vitamin supplements. The only problem is that none of these supplements have ever been proven to cure anything.
The supposed benefits of the products are not backed by sound scientific research, and as a result, the company was hit with a major class action lawsuit. The Federal Trade Commission argued that Airborne was knowingly deceiving the public with false and unproven claims. One of the most egregious was that Airborne products could cure the common cold.The company faced serious charges by the FTC and agreed to pay $30 million to settle the lawsuit.
Number 7. Loblaws
You know the system is rigged when bread becomes the subject of a lawsuit. In the late two thousand and ten s, it was discovered that numerous retailers were grossly inflating the price of bread in Canada.
Consumers were paying 10% more than they should have been, resulting in false profits of up to $5 billion. The situation was brought to the Competition Bureau of Canada by informants working at Loblaw Companies, a retailer that owns various supermarkets.
Their reputation was destroyed, so they offered Canadians a $25 gift card that could be used inside their stores, a PR move that would cost about $150,000,000. In January of 2022, a Canadian judge gave the go ahead for a massive class action lawsuit that is seeking billions in damages.
Number 6. Takeda Pharmaceutical
Once again, we turn to companies taking advantage of health issues and our desperate need to be rid of them. Takeda is the biggest pharmaceutical company in Asia, and they produce the Drug Actose, which is meant to treat type two diabetes.
The medication itself is called Pyoglytosone, and it is known to cause bladder cancer in those who ingest it. However, Takeda knowingly withheld this information from its clients, resulting in a class action lawsuit involving thousands of people, Takeda was found responsible for the dangerous deception and ordered to pay nearly $2.4 billion in restitution.
Number 5. Facebook
We could write a book, a Facebook, if you will, about this company and its many controversies. The privacy of its users has long been a contentious subject, and it got the company in a lot of trouble.
In the late two thousand and ten s, a British consulting firm called Cambridge Analytica was conspiring with Facebook to collect the personal data of millions of its users without their knowledge or consent.
This data was then used in the 2016 presidential election. As a result of the massive privacy violation, facebook was fined $5 billion, and Mark Zuckerberg was forced to testify in front of Congress. The fallout also affected Cambridge Analytica as they soon filed for bankruptcy.
Number 4 Enron
Few companies define the late nineties and early 2000s quite like Enron. Repeatedly named America’s most innovative company. By fortune, it was generating billions of dollars through commodities like electricity and gas. Where were they?
Shareholders were duped by the company’s supposed worth, as they were hiding billions of dollars in debt and ordering that their accounting firm, Arthur Anderson, look the other way. Enron’s stock price was at $90 in mid 2000, but once the deception was leaked, it plummeted to less than $1. Enron was slammed with a $40 billion lawsuit and filed for bankruptcy.
Executives were also sent to prison, and Arthur Anderson was dissolved owing to their complicity in the scandal.
Number 3. Purdue Pharma
There few names as controversial as Purdue Pharma. Founded back in 1892 by John Purdue Gray and George Frederick Bingham, Purdue has long been accused of fostering the American opioid epidemic and manipulating it for profit.
Their biggest controversy revolves around the drug OxyContin, which is the brand name for the highly addictive oxycodone. Purdue knowingly misled the public about the addictive nature of OxyContin and falsely claimed that it was safer than it is. In 2007, the company paid a historic $600 million in damages. Owing to the intentional manipulation, Purdue has since filed for bankruptcy protection and paid a further $8 billion in settlements.
Number 2. Theranos
You know the golden rule if something sounds too good to be true, it probably is. Founded in 2003 by Elizabeth Holmes, Theranos was a health tech company that claimed to revolutionize the science of blood testing.
Investors pump millions of dollars into this technology, resulting in an astounding company valuation of $10 billion in 2014. But just the very next year, Theranos was officially investigated and found to be duping its investors.
The company’s tech did not do what it claimed to do, and it was challenged by the US securities and Exchange commissions. Theranos was dissolved and Elizabeth Holmes was convicted of fraud, resulting in a prison sentence of eleven years.
Number 1. Bernard L. Madoff Investment Securities
There’s one big name in Wall Street deception, and that’s Bernie Madoff. Madoff was well respected in the financial industry and even served as chairman of the Nasdaq Exchange. But he was also a criminal, running the biggest Ponzi scheme in history.
Through his investment securities firm, Madoff stole over $60 billion from investors and directly implicated various family members. Madoff was undone by his own sons, Mark Andrew, who betrayed their father and served as whistleblowers against this company.
Madoff was sentenced to 150 years in prison, and his brother Peter received ten years. Exactly two years after Madoff’s arrest, his son Mark took his own life.
Source: Watch Mojo
