The Advertising Standards Authority has banned what it calls a "misleading" advert from the Universal Church of the Kingdom of God after ruling it could discourage people from seeking medical treatment as well as spiritual support.
A poster drawn up by the church included testimony from a woman whose son had a heart condition that caused both his lungs to collapse and left doctors expecting him to die.
In the advert, the woman said she anointed her son with "blessed oil" given to her by the UCKG and he eventually recovered while in hospital.
Two members of the public and the British Humanist Association challenged the advert, claiming the text implied the oil had medicinal benefit.
Although the ASA said the woman's testimony thanked the UCKG only for its "spiritual support", the regulator upheld the complaint because some readers were likely to infer that the oil had "played some role" in the recovery.
"Because UCKG had sent no evidence to support such an implication, we concluded that the ad was likely to mislead," the ASA said.
It also said the advert could discourage people from seeking essential treatment because, even though the woman said her son had received medical attention, some readers might infer that the oil had "a curative effect".
A spokeswoman for the UCKG said it deeply regretted a failure in its copy approval processes, explaining that the text had been revised and abbreviated from copy that had already been approved by the ASA for use in a four-page A5 promotional leaflet.
"While we believe that prayer sometimes helps a person to recover from illness, we believe that it should be used alongside normal medical treatment and advice, not to replace it," she said.
The ASA has ruled the advert must not appear again in its current form.