Misinformation can spread quickly and there are some businesses who go too far to get an advantage in a competitive marketplace. In an effort to help better protect the public, the government has put together various regulations to reduce the risk of false claims and other unscrupulous business practices. The legal system also offers some refuge, allowing wronged consumers to hold the business accountable through a civil suit.
How common are these practices?
Unfortunately, such practices are not uncommon. Today consumers must be wary as some unscrupulous businesses attempt to take advantage of the fear and confusion caused by the current coronavirus pandemic.
What are examples of unscrupulous and illegal business practices?
Examples the government is currently investigating include:
- False advertising. Consumers have reported businesses making false promises about the way their goods and services can protect against or combat the coronavirus. As a result, the Federal Trade Commission (FTC) encouraged businesses to remember it is illegal to make false claims about their products and services. In some cases, the law also forbids businesses from making true statements about a product or service that misleads, deceives or confuses the public. The FTC has sent warning letters to some businesses making such misrepresentations.
- Price gauging. It is also often illegal to increase the price of products in response to a state of emergency. Examples include medical devices, good, gas, hotel accommodations, building materials, transportation needs and other essential supplies. In California, state law makes it illegal to increase the price by 10 percent or more before the state of emergency.
Consumers who are the victims of these malicious acts can take a step further to hold the advertiser or business accountable for their wrongdoing. Civil claims may be available and can lead to financial awards to help the victim regain what was lost.