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What are unfair or deceptive trade practices?

| Feb 15, 2018 | Commercial Disputes |

When businesses first start out, they take steps to obtain a wide range of customers or clientele. This can take time, but, if done properly, a business could have a solid foundation. However, when the market changes or competition is high, a business attempts to rebrand itself by initiating deals or obtaining new products to bring in more business. While this can be a very profitable move, it could also be a move that hurts the business. If this is not done properly and the changes made are considered unfair or deceptive, business disputes could occur.

What are unfair or deceptive trade practices? With regard to unfair practices, they are acts that will cause or are likely to cause substantial injury to consumers that cannot be reasonably avoided and are not outweighed by the benefits provided to consumers or competitors. On the other hand, deceptive practices occur when there is a representation, omission or practice that misleads or is likely to mislead the customer, and a consumer’s interpretation of these are considered reasonable under the circumstances and these acts are material.

The Federal Trade Commission prohibits these acts, which applies to all people engaged in commerce. If a business is not in compliance with these regulations, it could face penalties. Additionally, this could hurt business relationships and the entire business in general. Thus, if such an occurrence is suspected in a business relationship, it is important to take action.

Harm could be caused to consumers and other businesses when unfair and deceptive trade practices occur. Therefore, no matter what side of a commercial dispute you are on, it is important to understand your rights and how best to proceed with the matter.

Source: federalreserve.gov, “Federal Trade Commission Act Section 5: Unfair or Deceptive Acts or Practices,” accessed Feb. 10, 2018