Understanding Unfair Trade Practices
How many times have you, as a consumer, been tricked by a business that mislead you? You are not alone, as unfair trade practices can, unfortunately, be commonplace for some companies. Section 5(a) of the Federal Trade Commission Act states “unfair or deceptive acts or practices in or affecting commerce” are prohibited to amongst any person engaged in commerce.1 Pursuant to S.C. Code Ann. Section 39-5-20, “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce” are unlawful in South Carolina.
A business practice or act that is deceptive or causes injury to a consumer is considered unlawful under consumer protection law. Consumers who are mislead by these fraudulent business practices can be affected economically and/or physically, depending on the case. Businesses that partake in unfair trade practices may do so to gain an advantage over their legally-compliant competitors or to pull in more clients or customers. Some types of these unfair trade practices include: misrepresentation of a good or service, false advertising, tied selling, false free gift or prize offers, and deceptive pricing.2, 3
Misrepresentation can be innocent, negligent, or, in the case of deceptive trade practices, fraudulent. This means the person or business who made the false statement did so knowingly and intentionally. It can also be considered false advertising when used to inaccurately promote a product, price, or service. False advertisement can range from misrepresentation to false statements and guarantees.
While often used interchangeably, there are a few differences between deceptive practices and unfair practices. A deceptive practice may mislead the consumer or his or her understanding of the practice or act. An unfair practice is one that may cause injury to the consumer and cannot be reasonably avoided.3
Unfair trade practices can occur in any industry but are prevalent in insurance claims, debt collection, tenancy, and the goods and services industry. Consumers who experience an unfair trade practice have the right to sue for monetary compensation and/or other damages.
Under some laws, a consumer is required to send a letter requesting a reasonable settlement offer in a set time period. Settlements may be a more cost-efficient option for companies than going through litigation.4 However, if a business fails to meet the terms and continues to use unfair trade practices, a lawsuit may be a necessary way for consumers to regain their losses and publicize the fraudulent practices.
If you have been a victim of unfair trade practices, then you deserve to be compensated for your losses caused by a company’s deceit. Our business law attorneys at Bannister, Wyatt, & Stalvey, LLC are trained and ready to help guide you through the process. Contact us today either by phone or by visiting our website.