Unlawful business practices differ from unfair business practices. Unfair business practices involve business behavior by an owner or corporation which is unethical, oppressive, or immoral, such as interfering with a competitor's contracts with a client or industrial espionage. However, the deceptive practices are not against the law.
What Are Unlawful Business Practices?
Laws concerning unlawful business practices can vary depending on whether state or federal laws apply. In general, unlawful practices occur when a person or business:
- Employs an unconscionable tactic while selling, disposing, or renting goods, services, or real estate
- Uses an unconscionable tactic in collecting or enforcing an obligation is also illegal
- Fails to deliver on any promised goods or services, including failing to refund money
Unfair business tactics can be used to unlawfully lure consumers into buying a product or service. This is referred to as consumer fraud. Consumer fraud includes:
- False advertising
- Pyramid scheme
- Bait and switch
Is an Unlawful Business Practice the Same as Puffery?
No. Puffery occurs when an exaggerated statement is made strictly for the purpose of attracting customers. The statements are used to “puff up” or promote the quality of the product or service. It’s commonly associated with promotional sales and advertising. Puffery is not unlawful. For example, if a person advertises their timeshare as space that is “heaven on Earth” is not engaging in any illegal business practice. Rather, the person is merely advertising their property.
Should I Consult an Attorney about Unlawful Business Practices?
Illegal business practices have tough penalties. You want to speak with a business attorney about any illegal business practices. An attorney will explain the type of practices that are unlawful and what can be done about it.