Deceptive sales practices can damage the reputation of an industry as a whole. They can also devalue the social solidarity and trust of consumers. Whether in the retail or insurance industries, deceptive sales practices undermine the value of a product and the trust of customers. It is important to be aware of the common practices used by sellers and the Federal Trade Commission (FTC) guidelines that protect consumers.
A seller may be found deceptive if the seller makes a material omission or misrepresentation. For example, if a salesperson fails to disclose a material fact or condition, such as a faulty air conditioning unit or carpets soaked in pet urine, the sale may be found deceptive. The seller can be found deceptive if the representation or omission is false or misleading, or if the representation or omission is a breach of an established concept of fairness.
In order to prove deception, a court will look at a seller’s acts or practices from the perspective of a reasonable consumer. The court will consider the likelihood that the alleged act or practice will result in substantial harm to the consumer. It will also look at whether the act or practice is likely to violate the established concept of fairness.
One common deceptive sales practice is the bait-and-switch. This is a sales pitch where a retailer lures a prospective customer with an alluring offer and ends up selling a higher priced product than the one that the prospective buyer had expected. The advertiser may disparage the advertised product or it may be offered at a price higher than what was previously offered.
The FTC has a series of guidelines that guide retailers and advertisers when preparing and advertising pricing claims. These guidelines set out the standards by which the commission will judge the merits of a price claim. Some of the requirements include that the advertiser has to collect the information before submitting it to the commission and that the advertisement should be for a genuine price.
The FTC has ruled on many instances of deceptive practices, including the use of false or misleading cost or price claims. It has also held that the use of careless language such as “free” or “sale” can be considered deceptive.
The FTC has also ruled on the use of comparative misrepresentations. If a manufacturer has a suggested retail price for a product that is higher than what it is actually selling, the comparison ad must make the same price claims and refer to the former price.
Similarly, a seller can be found deceptive if they advertise an item with false or misleading pictures. Pictures of expensive cars and plush offices can be misleading. Images and seals of the British monarchy are also often used to connote different things about a product.
Deceptive practices are often perpetrated by companies that sell illegal policies through direct mail, magazine ads or the Internet. However, there are some simple steps that consumers can take to protect themselves from these practices. First, check the company’s licensing and if the product is legal. Secondly, be sure to examine the complaint records of a sales agent to see if there are any complaints filed against them.