Whenever a business or an individual engages in activity that is likely to mislead the public may be considered a “deceptive trade practice”. Deceptive trade practices are prohibited due to the negative effects they have on consumers and the general public.
Federal and state laws prohibit the use of deceptive trade practices. The Uniform Deceptive Trade Practices Act (UDTPA) is an example of federal legislation that regulates deceptive trade practices. All states have adopted some form of the Act in their own statutes. The Federal Trade Commission Act also governs deceptive trade practices.
Deceptive trade practice laws cover a very wide range of business aspects, including trade & commerce, consumer transactions, and goods & services.
Deceptive trade practices can take a variety of forms. The basic idea behind deceptive trade practice is that the activity results in misleading or misinforming the recipient of goods or services. The most common examples of deceptive trade practices are false advertising, and tampering with odometers or other measuring devices.
Some other examples of activities that would be considered deceptive trade practices may include:
- Passing off goods or services as those of another
- Causing a likelihood of misunderstanding or confusion regarding the source, certification, or approval of goods or services.
- Using deceptive designations or representations of the geographic origin of goods/services
- Representing that the goods or services have ingredients, characteristics, uses, qualities, or benefits that they do not actually have
- Claiming that goods are new or original if they are used, second-hand, altered, or deteriorated
- Representing that certain goods or services are of a certain quality, grade, standard, model, or style, when they are of another
- Misrepresenting the goods, services, or business of another entity through the use of misleading facts
- Advertising products with the intent to sell them at a different price or quantity than advertised (for example, price reductions)
Thus, the majority of deceptive trade practices are connected with the provision of goods and services.
Yes- in addition to the provisions contained in federal and state laws, deceptive trade practices are also monitored and regulated by the Federal Trade Commission (FTC)
These focus more on the activities of business rather than the goods and services, including:
- Using unfair or unconscionable (one-sided) provisions in contracts
- Using coercive or high pressure sales and collections tactics
- Engaging in illegal conduct
- Taking advantage of factual circumstances, such as emergency situations or the vulnerability of a particular marketing demographic
Consumers and individuals who have been victimized through deceptive trade practices may have a variety remedies available for them in court. Some of these remedies include:
- Monetary Compensation: A plaintiff who has proven actual damages may be entitled to statutory damages to reimburse them for losses. Some states enforce treble damages in severe cases, which require the offender to pay triple the amount of the losses. Punitive damages and criminal prosecution may be available in some jurisdictions
- Equitable Relief: A court may also order an injunction which requires the offender to follow certain measures or abstain from specified activities. Cease and desist orders are also commonly issued for deceptive trade practices.
Some state statutes allow for “private enforcement”, which means that individual citizens may directly sue the business for deceptive trade practice violations. However, some states do not allow private enforcement or individual lawsuits. Instead, the state or the federal government itself will bring suit against the business organization.
If you have been the victim of deceptive trade practices, you may have a variety of remedies available to you. You may wish to contact a business lawyer for advice on how to file a claim for damages. Experienced attorneys can also help defend businesses that are being accused of committing deceptive trade practices.