Commercial Practices Prohibited by FTC - Explained
What Type of Business Practices are Prohibited by the FTC?
Written by Jason Gordon
Updated at June 21st, 2023
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What is the Business Commercial Environment?
What type of commercial practices does the FTC prohibit in an effort to protect customers?
The FTC prohibits commercial practices that are deceptive to customers. This generally concerns the practices of merchants who market or otherwise represent the quality or characteristics of goods or services to customers. In determining what is deceptive, the FTC will look at various characteristics about the information disclosed to the public.
- How would a reasonable consumer understand the information in the context of the message?
- Are there any express and implied claims about the product or service?
- Would leaving out information from the advertisement give consumers a misimpression?
- Is the claim of deception material?
If the representations to customers are deemed to be deceptive, the customer or FTC may bring a civil action against the violator.
Next Article: Consumer Financial Protection Act Back to: CONSUMER PROTECTION
Discussion Question
How do you feel about the reasonable consumer standard in determining whether a practice is deceptive? At what point should an opinion or general information about a product be considered an express or implied representation of the products qualities? How do you feel about the uncertain standard as to what type of practice constitutes a material deception?
Practice Question
Mark produces an advertisement for his business ABC, LLC. The advertisement makes claims about the quality and durability of ABC products. ABC receives many complaints that the products they sell routinely break, malfunction, and generally do not meet the standards advertised. If a group of customers ban together and file a complaint with the FTC against ABC for deceptive practices, what standard will the FTC apply in determining whether ABC should be held liable?
Related Topics
- Consumer Protection Law (Intro)
- What is consumer protection law?
- Cooling Off Rule
- What major federal laws protect consumers?
- What is the Federal Trade Commission
- Enforcement procedures of the FTC?
- Penalties for violating FTC regulations?
- Commercial Practices Prohibited by FTC?
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Unfair Trade Practices
- Predatory Pricing
- Bait & Switch
- Lemon Laws
- Consumer Financial Protection Bureau
- What is the Fair Credit Reporting Act?
- Users of Information?
- Credit Reporting Agency Consumers
- Reporting Agencies?
- Consumer Reporting Agency
- Furnishers of Information?
- Enforcement?
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- Fair Debt Collection Practices Act
- Fair Credit Billing Act
- Electronic Funds Transfer Act
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- Equal Credit Opportunity Act
- Regulation B
- Consumer Credit Protection Act
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Consumer Financial Protection Act
- Consumer Product Safety Act
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- Credit Repair Organization Act
- Federal Food, Drug, and Cosmetic Act
- Magnuson-Moss Warranty Act
- Privacy Act of 1974 (Privacy Act)
- Personally Identifiable Information
- Right to Financial Privacy Act of 1978 (RFPA)
- Electronic Communication Privacy Act of 1986 (ECPA)
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- What role do states play in Consumer Protection?
