Deceptive Trade Practices – An Overview

In the conduct of business, we want to give ourselves a competitive advantage in order to attract the attention of potential customers. This is where marketing and promotional efforts come in. Unfortunately, some businesses go over board to the point of resorting to illegal practices in order to get the advantage that they want. According to the website of Slater Pugh, Ltd. LLP, engaging in such unlawful practices may subject businesses to lawsuits.

A deceptive trade practice is defined as an activity that is likely to mislead the public especially the consumers. It is illegal due to the negative effects it can have on consumers and general public. Federal and state laws prohibit the use of such practices. There are different types of deceptive practices that businesses should avoid and here are some of them:

Price Deception

This is an example of an advertisement that provides customers with incorrect or misleading information about the price of a certain product. According to the Federal Trade Commission, advertisements must fully disclose the price that a consumer will pay for a product. It should also be transparent with any discounts, sales, or markdowns.

Bait and Switch

In bait and switch, the advertiser makes a certain claim about the price or availability of a product but with no intention to really sell the product or sell it for a higher price. When the customer responds to the advertisement, the advertiser will take advantage and sell a more expensive product or a different price that was advertised.

Quality or Origin Deception

Deceiving consumers about quality or origin without substantiating it is another illegal practice. Thus, you cannot claim that a product was “Made in the USA” if it was manufactured in another country. Likewise, you need to fully disclose any defects in quality or if the product is useful for other purposes it was not adequately designed for.

False Environmental Claims

The Federal Trade Commission also warns businesses on using misleading environmental claims such as “recycled,” “biodegradable,” “compostable,” or environmental-friendly.” Such claims should be supported by “competent and reliable scientific evidence.” They can mislead customers even if some part has environmental attributes but major components do not.