is substantial.
The Federal Trade Commission (FTC) is a federal agency that enforces consumer protection laws. Consumers
may seek recourse for unfair trade practices by suing for compensatory or punitive damages. Plaintiffs do not
have to prove intent. Showing that the practice itself was unfair or deceptive is sufficient.
Figure 12.2
The Federal Trade Commission (FTC) enforces consumer protection laws. (Credit: U.S.
Government/ wikimedia/ License: Public Domain)
Unfair Trade Practices and Examples
Product Guarantees and False Endorsements
Companies must be prepared to honor product guarantees. For example, if a product is advertised with a 50
percent money-back guarantee, then that must be provided to customers who meet the requirement(s)
attached to the guarantee. Similarly, companies may not create false endorsements and testimonials about
their products.
Unfair Advertising
False advertising includes the misrepresentation of a product, service, or price. It may be more expansively
defined to include unfair sales strategies, such as advertising one item and then selling another item in its
place, e.g., one that is higher priced, lower quality and/or less in demand. This method is most commonly
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Chapter 12 Unfair Trade Practices and the Federal Trade Commission
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