Bait and Switch Laws

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 What Is Bait and Switch?

Bait and switch advertising refers to when a seller creates an attractive, but disingenuous offer to sell a particular service or product that they do not actually intend to ever sell. This initial step (i.e., the advertisement) satisfies the “bait” portion of this tactic. The customer is deemed to have “taken the bait” if the advertisement successfully persuades them to enter the store.

Once inside the store, the seller will then pressure the customer into purchasing a more expensive service or product. This step satisfies the “switch.” In most instances, the “switched” service or product is typically not the same as the one being advertised and usually results in some sort of benefit for the seller (e.g., increased profits).

As an example, suppose a retailer advertises a winter coat that is made from high-quality materials, but is being sold at a low price. A customer who sees the advertisement becomes curious and gets lured into the retailer’s store to inquire about this teaser rate. Upon entering the store, they ask the retailer for more information about the offer. The retailer responds that the winter coat is no longer available and then attempts to sell them a more expensive item.

Thus, if you believe you have experienced a similar scenario, you may want to contact a local business lawyer to obtain further legal advice. Your lawyer can determine whether you were a victim of bait and switch advertising, and can discuss your potential options for legal recourse.

Is Bait and Switch Legal?

In general, employing bait and switch advertising tactics to lure customers into buying more expensive products is considered a form of fraud. Specifically, such acts are a violation of the Consumer Fraud and Deceptive Business Practices Act. 

A customer who was duped may also have grounds to sue based on a number of different bait and switch laws, such as a claim for unjust enrichment, an act of common law fraud, and/or in some cases, a claim for breach of contract. 

In addition, a customer may also be able to sue an advertiser or retailer for false advertising under Section 43 of the Lanham Act. 

Lastly, although an advertiser and/or retailer may face both civil and criminal actions for bait and switch business practices, they may be able to avoid prosecution by placing a small disclaimer on their ads that state that a particular store does not provide assurances. They might also include a disclaimer that a discount is limited to the quantity of items that are currently available in the store.

What Are Some Examples of Bait and Switch?

The U.S. Federal Trade Commission (“FTC”) is responsible for monitoring and enforcing laws that protect consumers from false advertising and fraudulent acts like bait and switch tactics. However, the sheer volume of advertising makes it virtually impossible for the FTC to perfectly execute this task. Thus, consumers must remain vigilant when viewing “too good to be true” types of advertisements. 

One of the most common examples of bait and switch advertising appears in offers from car dealerships. For instance, the car dealership will typically run an ad that says they have a limited supply of a specific model of motor vehicle that they will sell at an unusually rare and low price. 

After a customer enters the dealership to ask about their offer, the dealership will claim something like, “all motor vehicles at that price point have been sold, but there are similar cars on the lot.” Depending on the facts of a case, a court may find that their actions are in fact legal since the dealership could simply claim they had a certain amount of motor vehicles that were sold earlier to other customers. The customer suing will have to prove otherwise.

Another common bait and switch practice involves advertisements for rental or for-sale properties. For example, an advertiser may post pictures of a beautiful apartment that is located in a trendy neighborhood at a very low price. Sometimes, the pictures may list the wrong address, appear to be fake, or will be blurry enough that a consumer will not be able to tell whether the photos are real or not. 

The consumer will then contact the listing to find out when they can view the property. Upon calling, the broker may inform that the listing has already been sold, that it was an older listing, or that the photos are similar to other properties on the market that they can show them instead.

One final way that retailers use illegal bait and switch tactics is by offering low financing rates to purchase an appliance or car. In the offer, the business will also make a claim asserting that almost anyone is eligible to apply for the low financing rates to entice customers to visit the store. 

The bait and switch in the above scenario is the fact that usually only individuals with very good or excellent credit scores will be eligible to apply for such low rates. However, the majority of customers that will be lured in by such ads are typically ones who do not qualify for the advertised rates and thus may be persuaded to purchase a much more expensive item that they cannot actually afford. 

How Can I Prove a Bait and Switch?

Elements of proof for bait and switch claims will depend on the basis of the legal action being brought. For example, a person who sues a retailer for false or misleading advertising will need to prove five elements under Section 43 of the Lanham Act. These elements include:

  • The plaintiff must show that the defendant made false or misleading statements about a service or product;
  • That the defendant engaged in actual deception or at least intended to deceive the majority of targeted consumers;
  • The deception itself is substantial enough that it is more than likely that it will influence a consumer to purchase the service or product;
  • The advertised service or product being offered are items that are sold in interstate commerce; and
  • A probability that the defendant’s conduct will likely result in harm to the plaintiff.
  • On the other hand, if a customer files an action in federal claims court based on contract law, then they will have to demonstrate that:

  • The seller’s initially proposal specified that they would rely on certain employees to perform the services in question;
  • The customer relied on this specification when reviewing the seller’s proposal;
  • It was both foreseeable and probable to the seller that the employees named in the original proposal would not be available to execute the contract; and 
  • Employees that differed from those listed in the proposal would be the ones performing the services under the contract.
  • Some types of evidence that could support a customer’s claims include the ad itself, offers that are made in writing or written service contracts, and witnesses or other customers who have fallen victim to the retailer’s tactics. 

    What Are Some Remedies For Bait and Switch Victims?

    The majority of bait and switch cases are brought by prosecutors. Thus, defendants to these cases may need to pay some amount of criminal fines and/or may be enjoined from employing bait and switch business practices. 

    On the other hand, bait and switch civil lawsuits involve claims that are filed by a private party (e.g., the victim). A plaintiff or victim who prevails on their claim may receive a monetary damages award. In rare cases, a victim may also be awarded some amount of punitive damages as well. 

    In addition, some advertisers have been ordered to grant full or partial refunds to consumers who purchased a service or product featured in a bait and switch advertisement. 

    Finally, bait and switch claims that are handled by the FTC may result in a cease and desist order to prohibit the use of these tactics in a company’s future ads.

    How Can an Attorney Help?

    Although the majority of bait and switch cases are brought by the FTC or filed by prosecutors, a private party may also have grounds to file a lawsuit. It should be noted, however, that civil bait and switch claims are much harder to prove than its criminal counterpart of fraud. Thus, a person may want to contact a local business lawyer for further guidance.

    An experienced business lawyer will already be familiar with the laws of your jurisdiction as well as any applicable federal laws. Your lawyer can also assess whether you have a viable claim, and if so, can help you file the necessary legal documents with the appropriate court. Additionally, your lawyer can predict and discuss the potential outcomes of your case, and can provide representation in court on the matter.

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