Consumer Protection Against Deceptive Sales
SACRAMENTO — Consumers can often become victims of deceptive sales, when they purchase products or services from companies that use dishonest tactics. Several groups, including the Electronic Security Association (ESA), the Better Business Bureau and ADT, are working together to fight these bad practices.
According to federal law, an unfair or deceptive act or practice is one that is likely to mislead a reasonable consumer acting reasonably under the circumstances with respect to a material matter. A material matter is any aspect of a product or service that would affect the consumer’s conduct or decision with respect to the product or service.
Among the most common acts or practices that are considered to be deceptive include making misleading cost or price claims, bait-and-switch techniques, and failure to disclose required information about a product or service. The agencies will evaluate the totality of a representation or omission to determine if it is deceptive. The agencies will not judge a representation or omission in isolation, but instead will consider its effect on the average consumer.
The agencies also prohibit false advertising, which is any statement that misleads consumers regarding the nature or value of a product or service. Examples of false advertising may include the following:
A product must be advertised at a specific price for a specific time period in order to qualify as an advertised sale. The term “sale” must be clearly stated in the advertisement and, if the product was previously sold at a higher price, that fact must be disclosed. If a product requires assembly, the advertisement must indicate that fact.
An insurance agent or company cannot knowingly mislead a consumer when it comes to life insurance policies. Despite the prevalence of mis-selling practices in the life insurance industry, exact numbers of policyholders who have been mis-sold are difficult to obtain. Interview and ethnographic data suggest that moral risk is a pervasive feature of the structure and culture of the life insurance institution, articulating with key contemporary social tendencies such as responsibilization of individual consumers, fragmentation of family ties, attenuation of the social safety net and downloading of regulatory responsibility to the private sector.
Although many ESA member companies have high BBB ratings, some bad apples ruin the reputation of the whole industry by engaging in deceptive sales. It is important that all consumers and businesses file a complaint when they witness these bad actors, so that the bad apples can be identified and stopped. Door-to-door selling can be a valuable tool in marketing your business to consumers, but only when done properly and with honesty and integrity. For more information about how to file a complaint, please visit the BBB’s Complaint Center. This is a free, safe and easy way to report a problem with a local business. The Bureau’s Complaint Center is available 24 hours a day to help you. You can call to speak with a live representative at 1-800-849-5933. Or submit your complaint online by clicking here.