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Malpractices in Business


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I. Deceptive Trade Practices: An Introduction a. What it is b. Who is affected c. The impact on individuals and society d. Solution(s) to the problem: to regulate or not to regulate What are “Deceptive Trade Practices”? Whenever a business or an individual engages in activity that is likely to mislead the public may be considered a “deceptive trade practice”. Deceptive trade practices are prohibited due to the negative effects they have on consumers and the general public. When a person or a firm is involved in a business which misguides the people can be regarded as deceptive trade practice. It is illegal because it has various harmful impacts on the consumers. Federal and state laws prohibit the use of deceptive trade practices. The Uniform Deceptive Trade Practices Act (UDTPA) is an example of federal legislation that regulates deceptive trade practices. All states have adopted some form of the Act in their own statutes. The Federal Trade Commission Actalso governs deceptive trade practices. Not only federal laws but also the state laws disallow any kind of deceptive trade practices. UDTPA or Uniform Deceptive Trade Practices Act can be seen as an instance of federal laws. The act has been adopted by the different states in different forms in their respective statutes. The Federal Commission Act (FCT) also regulates deceptive trade practices. Deceptive trade practice laws cover a very wide range of business aspects, including trade & commerce, consumer transactions, and goods & services. It comprises many areas of business such as commerce and trade, goods and services, and consumer transactions. What are some examples of Deceptive Trade Practices? Deceptive trade practices can take a variety of forms. The basic idea behind deceptive trade practice is that the activity results in misleading or misinforming the recipient of goods or services. The most common examples of deceptive trade practices are false advertising, and tampering with odometers or other measuring devices. Some other examples of activities that would be considered deceptive trade practices may include: * Passing off goods or services as those of another * Causing a likelihood of misunderstanding or confusion regarding the source, certification, or approval of goods or services. * Using deceptive designations or representations of the geographic origin of goods/services * Representing that the goods or services have ingredients, characteristics, uses, qualities, or benefits that they do not actually have * Claiming that goods are new or original if they are used, second-hand, altered, or deteriorated * Representing that certain goods or services are of a certain quality, grade, standard, model, or style, when they are of another * Misrepresenting the goods, services, or business of another entity through the use of misleading facts * Advertising products with the intent to sell them at a different price or quantity than advertised (for example, price reductions) Thus, the majority of deceptive trade practices are connected with the provision of goods and services. Examples of deceptive trade practices may include false advertising and tampering with measuring devices. Some particular examples are: * Transferring the goods or services of others * To use false designations of the goods or services * To cause a possibility of misinterpretation about the certification, approval and source of goods or services * Showing of goods having some certain quality, model, standard or style when the goods do not possess the same It has been observed that most of deceptive trade practices related to goods and services. Do Deceptive Trade Practices Laws cover other issues besides Goods and Services? Yes- in addition to the provisions contained in federal and state laws, deceptive trade practices are also monitored and regulated by the Federal Trade Commission (FTC)
These focus more on the activities of business rather than the goods and services, including: * Using unfair or unconscionable (one-sided) provisions in contracts * Using coercive or high pressure sales and collections tactics * Engaging in illegal conduct * Taking advantage of factual circumstances, such as emergency situations or the vulnerability of a particular marketing demographic
As the FTC (Federal Trade Commission) also governs deceptive trade practice, it

What are the Remedies for Deceptive Trade Practices? Consumers and individuals who have been victimized through deceptive trade practices may have a variety remedies available for them in court. Some of these remedies include: * Monetary Compensation: A plaintiff who has proven actual damages may be entitled to statutory damages to reimburse them for losses. Some states enforce treble damages in severe cases, which require the offender to pay triple the amount of the losses. Punitive damages and criminal prosecution may be available in some jurisdictions * Equitable Relief: A court may also order an injunction which requires the offender to follow certain measures or abstain from specified activities. Cease and desist orders are also commonly issued for deceptive trade practices. Some state statutes allow for “private enforcement”, which means that individual citizens may directly sue the business for deceptive trade practice violations. However, some states do not allow private enforcement or individual lawsuits. Instead, the state or the federal government itself will bring suit against the business organization.

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