The Federal Trade Commission Act (FTCA) outlaws unfair competition methods and unfair or deceptive acts, which affect consumers. FTCA violations are often proven through misleading sales, fraud, oppression, bad faith, or violations of accepted public policy standards.
The Federal Trade Commission enforces the FTCA, but many states have enacted antitrust laws to prevent restraints on competition. Congress passed the Federal Trade Commission Act to protect American consumers from unfair competition methods. Employees, agents, or representatives of a business may also impose liability on the company (as agents) for their unfair and deceptive acts. A business need only have the appearance of deceiving the consumer. The FTCA does not require that actual deception occur.
Areas of illegal activities include misrepresenting product quality, deceptive advertising of prices, special discounts, free products, and misleading sales claims as inducement to purchase products or services. Widespread deceptive and misleading sales practices have raised public concern. Providing safeguards against misleading price claims, sales misrepresentation and deceptive promotional techniques form the core of consumer protection laws.
Most consumers injured by unfair, misleading, or deceptive trade practices of large companies would be unable to prove an action for fraud, and most laws attempting to deal with dishonest conduct and sales abuses require that sellers be shown to have intent to defraud and require consumers to prove justifiable reliance of the deception.
Practices that have been found misleading include false oral or written representations, misleading price claims, sales of hazardous and defective products, failure to meet warranty obligations without adequate disclosure, use of bait and switch techniques, and failure to perform promised services.
Companies doing business online are also liable for misleading ads, improper selling practices, non-delivery of goods or services, misrepresentation, warranties and guarantees not honored, billing problems, and issuing contracts that go unfulfilled.
