Deceptive trade practices are activities used to mislead members of the public into purchasing a product or service, including acts like false advertising and bait-and-switch tactics. To combat deceptive trade practices, many states have passed the Uniform Deceptive Trade Practices Act. California has not passed the uniform act, but state law regulates trade practices through the California Unfair Trade Practices Act.
Deceptive or Unfair Trade Practices
It is the general law in every state that sellers cannot try to trick consumers into buying products or services by false, deceptive or unfair trade practices. These practices can take many forms, but involve the use of disinformation, false claims and similar tactics to lure the buying public.
To combat these practices, many states have adopted a uniform law called the Uniform Deceptive Trade Practices Act. While California is not among those states, it does have laws that address this issue, specifically prohibiting unfair competition or business practices.
California Deceptive Trade Practices Laws
The primary law forbidding deceptive trade practices in California is the Unfair Trade Practices Act, set out in California Business & Professions Code, Sections 17200 through 17209. These statutes make it illegal to commit acts of unfair competition.
What does this mean? Unfair competition is defined in the Act as an unfair, unlawful or fraudulent business practice or advertising that is false, deceptive or misleading. All business practices that are illegal or against public policy are forbidden unfair competition if they harm customers or give a business an unfair advantage over its competitors.
California Unfair Trade Practices Act
This California law makes it illegal for any person or business to try to sell a service or property by using false advertisement. The practice is illegal when the statement luring people to buy the property or service is published in a print medium like a newspaper, electronically like an internet ad, or by any other manner or means.
A statement is considered false advertising if it misleads the consumer about any circumstance related to the proposed performance, product or service. The act also covers advertisements that are published as part of a scheme to defraud or deceive consumers.
Violating this law is a misdemeanor. If the district attorney prosecutes and convicts an individual under this section, he can be punished by up to six months in county jail and/or a fine up to $2,500.
Misleading Advertisements as to Quantity
Under California Business and Professions Code Section 17500.5, it is also a crime for a business or individual to falsely advertise how many of an article of property will be sold to a customer. Any restriction of quantity must be clearly stated in the advertisement.
Additionally, if a customer is lured into a place of business by an advertisement, it is against the law for the business to refuse to honor the terms of the ad. A seller who does will be liable to repay the customer for all losses and expenses she incurred, plus the sum of $50.
Court Action Under the Act
California courts can enforce the prohibitions of the Unfair Trade Practices Act by injunction. An injunction is a court order telling a person or a business to stop violating the law. Who can ask the court for an injunction? The state attorney general or any other prosecutor, such as a district attorney or city attorney representing a city or county can seek an injunction.
In addition, any individual can sue if she loses money or property as a result of unfair or deceitful business practices. In a suit for unlawful business practices, the plaintiff must show that the seller intended to destroy competition, but this is not necessary in cases of false or deceptive advertising.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.