FAQs
Examples of unfair trade practices
- Intensively pressuring or influencing a consumer to buy. Example: A salesperson spends 4 hours in a consumer's home trying to sell a vacuum cleaner.
- Taking advantage of a consumer who does not understand a transaction.
The phrase unfair trade practices can be defined as any business practice or act that is deceptive, fraudulent, or causes injury to a consumer. These practices can include acts that are deemed unlawful, such as those that violate a consumer protection law.
What do you mean by unfair practices? ›
1. : a trade practice with respect to the public or a competitor that is forbidden by statute and that is therefore subject to control by a federal trade commission. 2. : unfair competition.
What is an example of an unfair act or practice? ›
Acts or practices that have the potential to be deceptive include: making misleading cost or price claims; using bait-and-switch techniques; offering to provide a product or service that is not in fact available; omitting material limitations or conditions from an offer; selling a product unfit for the purposes for ...
What are the six types of unfair trade practices? ›
Unfair trade practices include false representation of a good or service, targeting vulnerable populations, false advertising, tied selling, false free prize or gift offers, false or deceptive pricing, and non-compliance with manufacturing standards.
What are examples of fair practices? ›
Fair Business Practices
- Security Export Control.
- Ensuring Fair Trade.
- Exclusion of Antisocial Forces.
- Protection of Intellectual Property and Copyrights.
- Information Security and Protection of Personal Information.
- Crisis Control Measures.
- Policy Regarding Material Suppliers.
Unfair claims settlement practices include denying a claim without a reasonable investigation, refusing to explain a claim refusal, not acting promptly on claim-related communications, and offering a less than reasonable settlement amount.
Which of the following is not an unfair trade practice? ›
Final answer: Replacing life insurance policies is not necessarily an unfair trade practice, while rebating premiums, making derogatory statements about an insurer's financial condition, and issuing company stock to induce insurance purchases can be considered unfair practices if conducted deceptively.
What are the three unfair business practices that concern the FTC the most? ›
- Consumer injury. Unjustified consumer injury is the primary focus of the FTC Act, and the most important of the three S&H criteria. ...
- Violation of public policy. ...
- Unethical or unscrupulous conduct.
Unfair business practices include misrepresentation, false advertising or representation of a good or service, tied selling, false free prize or gift offers, deceptive pricing, and noncompliance with manufacturing standards.
Deceptive practices fall into three groups: pricing, promotion and packaging. Deceptive pricing includes practices such as falsely advertising 'factory' or 'wholesale' prices or a large price reduction from an unrealistic- ally high retail list price.
What is the three part test to determine deceptive? ›
As explained in the Policy Statement, an act or practice is deceptive where: (1) A representation, omission, or practice misleads or is likely to mislead the consumer; (2) a consumer's interpretation of the representation, omission, or practice is considered reasonable under the circ*mstances; and (3) the misleading ...
What are the 4 P's of deception? ›
– Deception test requires disclosures to satisfy the “Four P's” – prominence, placement, presentation, and proximity. The CFPB has authority to levy substantial monetary penalties for violations of TILA, the MAP Rule, and the CFPA's UDAAP prohibitions up to: – $5,000 for violations. – $25,000 for “reckless” violations.
What happens if you violate the FTC Act? ›
Companies that receive this Notice and nevertheless engage in prohibited practices can face civil penalties of up to $50,120 per violation.
What are two different examples of what he and others might call unfair trade? ›
Overview
- false advertising.
- "bait and switch" selling tactics.
- unauthorized substitution of one brand of goods for another.
- use of confidential information by former employee to solicit customers.
- theft of trade secrets.
- breach of a restrictive covenant.
- trade libel.
- false representation of products or services.
Making a material misrepresentation to an insured is considered to be an unfair trade practice.
