Your business probably receives phone calls every so often from people promising free publications as a “no-risk” offer. But if something sounds too good to be true, it probably is. In fact, telemarketers often call businesses hoping to lure them into accepting free merchandise that eventually comes with a large bill. Companies that use deceptive trade practices like this can find themselves in trouble with the government.
Common Deceptive Trade Practices
Generally, actions that might be considered deceptive trade practices:
- Representing, omitting, or acting in a way that misleads or probably will materially mislead consumers.
- The consumer’s interpretation of the action or omission is reasonable considering the situation.
Examples of deceptive trade practice behavior include:
- A financial advisor that promises unrealistic dividends or ROI.
- An insurer that misrepresents the nature of a policy to entice someone to agree to the purchase.
- Advertisers that make unfounded promises or omit negative information about a product.
Sending consumers a ‘free’ product with hidden strings attached is also a deceptive trade practice. In fact, the Federal Trade Commission (FTC) recently filed a complaint against a company that ran this type of scam.
The FTC vs. American Future Systems, Inc., et al.
American Future Systems, Inc., and other companies pitched free publications and samples to businesses. Their salespeople leave out information about future subscription costs or promised to follow up after the samples arrived. Instead, businesses were signed up for expensive subscriptions. When the inadvertent purchasers refused to pay the invoices for the unwanted services, the sellers sent their accounts to collection agencies.
The FTC sued both the companies making the deceptive offers and the collection agency. According to the complaint, the FTC claims that the two were working together to defraud consumers.
This case is still making its way through the federal court system. However, businesses who feel they have been deceived through deceptive trade practices should remember that they have rights.
Deceptive Trade Practices Are a Real Problem for Small Businesses
Especially in today’s business world, it’s crucial to keep costs down. Losing money to a scam like the “no risk” offer is not acceptable. Find out more about your legal options by talking to a business attorney.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.