CONSUMER PROTECTION LAWS

For many years consumers dealt with merchants and providers of services. Buyers were expected to look out for and protect their own interests. In addition, much of the law concerning the sales of goods and the extension of credit was structured to protect business interest rather than consumer interests. Beginning in the mid-1960s, at about the same time that the law of product liability was changing, many consumers recognized that these sales and credit laws put them at a disadvantage in trying to protect what they thought were their rights.

Consumer protection laws place a potent weapon in the hands of buyers. In an ordinary lawsuit, a plaintiff can recover only his or her actual losses. However, some consumer protection statutes provide for up to triple the damage a person has suffered. This potential for large verdicts gives buyers and their lawyers an incentive to sue if it looks like a law has been violated.

Most consumer protection laws contain a broad prohibition on "unfair or deceptive practices." In addition, many statutes list specific practices that are forbidden, such as deceptive advertising and pricing, discussed below.

Deceptive Advertising

Under both federal and state law, an ad is unlawful if it tends to mislead or deceive, even if it doesn't actually fool anyone. Your intentions don't matter either. If your ad is deceptive, you'll face legal problems even if you have the best intentions in the world.

Deceptive Pricing

The two pricing practices most likely to get your business into trouble are: making incorrect price comparisons with other merchants or with your own "regular" prices, or offering something that is supposedly "free" but in fact has a cost.