Deceptive Business Practices

 

The Federal Trade Commission Act (FTCA) was passed by Congress to protect

businesses and consumers from unfair competition and unfair or deceptive

acts in the conduct of business. According to the FTCA, an unfair or

deceptive act doesn’t actually have to occur; rather the intent to deceive

is enough to be in violation of the law. Furthermore, a business can be held

liable for the unfair and deceptive acts of its agents, representatives

and/or employees. FTCA violations are usually determined by proving bad

faith, fraud, oppression, or a violation of public policy.

 

The Federal Trade Commission Act addresses unfair and deceptive acts in many

areas of business. Given the important role that advertising plays in

competition, much attention is paid it. According to FTCA:

Advertising must be truthful and non-deceptive;

Advertisers must have evidence to back up their claims; and

Advertisements cannot be unfair.

 

Additional laws govern advertising for such specialized products like

credit, consumer leases, credit, 900 telephone numbers, and product sold via

mail-order and telephone solicitation. All states also have consumer

protection laws that govern ads running in that state.

 

If a business engages in deceptive practices aimed at the average consumer,

it may be in violation of FTCA regulations. Examples of deceptive acts

include the misrepresentation of product ingredients or origins, the use of

misleading labels or tags, engaging in “come-on” advertising, and the

implementation of packaging designs and advertising similar to a known

consumer brand or trade name. There are, of course, exceptions to the

regulations. More often then not, it has been determined that the use of

trademarks, copyrights and patents promote fair business practices by

actually promoting fair competition.

 

Only the Federal Trade Commission can enforce the FTCA. As a result, many

States have enacted laws to provide consumers with even greater protection.

Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) was passed in

1973. Known as Florida’s “little FTC act,” the FDUTPA supports the

provisions of the FTCA, while also enabling consumers to receive

compensation for damages, attorney’s fees and costs. It also allows for

injunctive relief and declaratory judgments, as well as many remedies to

sate authorities that may bring forth class actions. Federal laws apply to

interstate and foreign commerce while the state laws apply to activities

taking place within the state borders.