Details on State Deceptive Trade Practices
What Makes a Trade Practice Deceptive?
Manufacturers and retailers put enormous effort into marketing and advertising, often making grandiose claims about their product or service. But as long as these claims aren't overtly deceptive (or flat-out false) they're typically legal. A deceptive trade practice is activity by an individual or business that is meant to mislead or lure the public into purchasing a product or service. False advertising and odometer tampering are two of the most blatant examples of commercial fraud.
State Deceptive Trade Practice Laws: Overview
Virtually every state has a law prohibiting various deceptive trade practices. Typically, the state attorney general has the authority to take action against alleged offenders. Some states also allow private and class action suits to be filed by aggrieved parties. Ohio law, for instance, enforces a $25,000 civil penalty and injunctions (if necessary) for violations. Ohio residents who have been harmed by a deceptive trade practice may sue for three times the amount of actual damages or $1,500 (whichever is greater), plus court costs and attorney fees. Arkansas law, meanwhile, does not permit private legal action.
Because a deceptive trade practice may affect individuals or businesses from more than one state, several states have adopted the Uniform Deceptive Trade Practices Act (UDTPA). The model legislation does not add or detract from the law of any one state. Rather, it is intended to enable class action lawsuits and other remedies for those "likely to be damaged" by a deceptive trade practice. For example, a car dealer advertising used cars with low mileage is discovered to have been tampering with the cars' odometers. If this advertisement was broadcast on local television, then everyone in the viewing area is "likely to be damaged" by the fraudulent claim.
Deceptive Trade Practices: Examples
State laws define certain acts as deceptive trade practices. Most states have very similar lists of offenses, but typically vary in how they are handled. Trade practices commonly defined as "deceptive" include (but are not limited to):
- False representation of the source, sponsorship, approval, certification, accessories, characteristics, benefits, or quantities of a good or service
- Representing goods as original or new when, in fact, they are deteriorated, altered, reconditioned, reclaimed, or used
- Falsely stating that certain services, replacements, or repairs are needed
- Advertising goods or services with the intent of not selling them as advertised, or with the intent of not having enough in stock to meet reasonably expected demand
- Disconnecting, turning back, or resetting the odometer of a vehicle to reduce the number of miles indicated
- Passing off goods or services as those of another (for example, selling counterfeit goods)
- Representing goods or services as having a sponsorship, approval, sponsorship, or certification of goods or services
Deceptive trade practice claims often take a while to get resolved, and not all claims are even investigated. If you believe you have a claim for deceptive trade practice, talk to a consumer protection attorney near you for more information.