Avoiding Deceptive Sales Practices

The security industry is no stranger to deceptive sales, from trunk slammers to scams that involve a new company pretending to be another. But the practice isn’t just annoying to consumers; it undermines the deep trust customers place in their security provider to safeguard their families, pets and irreplaceable possessions. To combat this issue, SDM spoke with ADT’s chief legal officer, David Smail, to learn what constitutes a deceptive sales practice.

The law defines “deceptive” as a representation, omission, or practice that causes material injury to consumers not reasonably avoidable by them under the circumstances and that is not outweighed by countervailing benefits to consumers or to competition. While some people might disagree about what falls under this definition, the FTC’s official guidelines offer some helpful guidance to consumers and businesses.

Misleading price and savings claims, bait and switch tactics, and the use of the word “free” are just a few examples of practices that the FTC has found to be deceptive. But there are a few other common pitfalls that are also worth avoiding, including comparative misrepresentation (making misleading comparisons between your product and that of a competitor) and the failure to disclose important information.

False representations may also occur when a seller advertises a former price and it is not genuinely the higher price that was charged in the past. For example, if the advertised former price was only the price at which substantial sales were made, it is not dishonest for a retailer to advertise: “Brand X Pens, $10, Elsewhere $7.50.” In order for this statement to be true, however, the formerly-charged price must have been at which substantial sales were made in the product area for a reasonable period of time in the recent past.

SDM: In a world of high-pressure sales, it can be easy to get caught up in the excitement and push yourself to close the sale. But what’s the line between a hard sell and deception? DS: Ultimately, deception has to do with what you’re selling. It’s about making promises you can’t keep, offering a benefit that doesn’t exist, or nudging someone into buying something they don’t really want.