Antitrust Laws

Unfair and Deceptive Trade Acts and Practices

Unfair business practices occur when a business acts to breaches the general consumer trust in such businesses. They can apply to many industries, from the obvious, such as in the purchase of various products and services, to less obvious cases, such as debt collection and tenancy matters.

Usually, matters classified as unfair business practices involve fraud, misrepresentation, or an act that by its commission alone implicates the business in having leveraged terms that are excessively unfair.

Unfair business practice laws are designed to protect consumers. Statutes generally define the type of act that qualifies as an unfair business practice and state the recommended remedy. Restitution is typically the result of a successful resolution, but an injunction to cease the practice in question is another possible outcome.

If the circumstances are particularly egregious, the court may mandate punitive damages or an injunction to cease operations altogether. Many jurisdictions require that anyone filing a claim for unfair business practices suffer some form of tangible financial damage.

Deceptive Trade Practices is a broad term encompassing unfair and injurious consumer practices. These may include false or deceptive advertising or other practices meant to mislead consumers to that consumer’s detriment. Deceptive trade practices are regulated by the Federal Trade Commission (FTC). Still, every state has consumer protection statutes that allow state attorneys, together with consumers, to file lawsuits over unfair consumer practices.

Bait and Switch

In antitrust litigation, the term “bait and switch” is commonly used when discussing a deceptive trade practice in retail sales. For instance, this term is applied when a retailer promises a customer one type of product or deal in its advertising. Still, when the customer visits the shop, the advertised deal is not available.

Generally, at this point, the customer is switched to a more expensive product. The logic is that the retailer lures in the customer with the “bait” of a great deal, then takes advantage of him when he’s already in the store and more likely to settle for something different than what was promised.

A bait-and-switch operation is a form of false or misleading advertising regulated by consumer protection statutes as fraud.

While most commonly seen in the retail sales industry, bait-and-switch tactics also can be found in the following instances:

• Employers who advertise a job opening that gives a misleading impression of duties, working conditions, or compensation
• Hotels that advertise a lower rate and tacking on hidden fees upon check-in
• Telecommunication Companies who offer services at an introductory price and then escalate the price drastically after that time period
• Contractors that add on extra fees above the service estimate