FALSE ADVERTISING I FRAUD I CONSUMER FRAUD I UNFAIR PRACTICES ACT I CALIFORNIA UNFAIR COMPETITION LAW – False Advertisements and Deceptive Acts

FALSE ADVERTISING I FRAUD I CONSUMER FRAUD I UNFAIR PRACTICES ACT I CALIFORNIA UNFAIR COMPETITION LAW – False Advertisements and Deceptive Acts

July 16, 2021

False Advertisements and Deceptive Business Practices, what is it?

False advertising is defined as the publication of any claim that is either deceptive of untruthful. The dissemination of misleading information and untruthful advertisements give consumers an incorrect understanding of the product(s) and/or service(s) they are seeking to purchase or utilize. The Federal Trade Commission Act affords the Federal Trade Commission (“FTC”) authority to limit fraudulent and deceptive business practices. Fraudulent acts and unfair business practices include false advertising, unfair trade practices and the dissemination of misleading information. The FTC’s has the ability to bring criminal actions, issue fines and injunctions for the benefit of the public and consumers.

False Advertisements – Enjoining the Dissemination of False Advertisement

“15 U.S. Code § 53 – False advertisements; injunctions and restraining orders: (a) Power of Commission; jurisdiction of courts. Whenever the Commission has reason to believe— (1) that any person, partnership, or corporation is engaged in, or is about to engage in, the dissemination or the causing of the dissemination of any advertisement in violation of section 12 [15 USCS § 52], and (2) that the enjoining thereof pending the issuance of a complaint by the Commission under section 5 [15 USCS § 45], and until such complaint is dismissed by the Commission or set aside by the court on review, or the order of the Commission to cease and desist made thereon has become final within the meaning of section 5 [15 USCS § 45], would be to the interest of the public ..”

False Advertisement – Deceptive Actions

“15 U.S. Code § 52 – Dissemination of false advertisements: (a) Unlawfulness. It shall be unlawful for any person, partnership, or corporation to disseminate, or cause to be disseminated, any false advertisement— (1) By United States mails, or in or having an effect upon commerce, by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly the purchase of foods, drugs, devices, services, or cosmetics; or (2) By any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase in or having an effect upon commerce of food, drugs, devices, services, or cosmetics. (b) Unfair or deceptive act or practice. The dissemination or the causing to be disseminated of any false advertisement within the provisions of subsection (a) of this section shall be an unfair or deceptive act or practice in or affecting commerce within the meaning of section 5 [15 USCS § 45].”

Examples of Deceptive Business Practices

Unfair and deceptive trade practices that violate consumer protection laws, are subject to judicial redress. While it is impossible to list every situation, some examples of unfair business practices include:

• • Deceptive or fraudulent actions that cause injuries to consumers;
  • False representation of a goods and services;
  • Fraudulent gift or prize offers;
  • Non-compliance with manufacturing standards;
  • False Advertising;
  • Unfair Loan Servicing Practices
  • Unfair Advertisements which include incorrect pricing, fake endorsements, false statements, deceptive guarantees or exaggerated performance descriptions;
  • Deceptive Pricing;
  • Unfair Sales practices such a “Bait and Switch” where a business advertises an item for a low price with the intent of selling another item;
  • Predatory Pricing;
  • Fix prices;
  • Price Fixing;
  • Rig bids;
  • Market Division;

False Advertising a Case Study: Avant, LLC advertised, marketed and distributed online personal loans by engaging in deceptive and unfair conduct in violation of consumer protection laws.

Avant advertised, marketed, and offered loans to consumers online, with loan amounts ranging from $1,000 to $35,000. To secure these loans Avant engaged in a pattern of deceptive and unfair conduct regarding consumers’ payments and payment information. Specifically, Avant deceived consumers about its acceptance of credit and debit cards, failed to timely apply paper payments, deceived consumers about the amount needed to pay off their loans, and collected or attempted to collect additional payments from consumers who have already paid the quoted payoff amount. Moreover, Avant charged payments that consumers did not authorize, including charging some consumers as many as eleven times in a single day. After an investigation into Avant’s fraudulent practices the FTC filed a complaint in Federal Court seeking injunctive relief and a monetary judgement. The parties eventually entered a stipulation for a permanent injunction and Avant submitted to a monetary judgment for equitable monetary relief in the amount of $3,850,000.00 (Three Million, Eight Hundred and Fifty Thousand Dollars)

Federal Trade Commission v. Avant, LLC; Case No: 1:19-cv-02517; Filed: April 15, 2019

For additional Articles discussing the FTC’s Role in consumer protection please see the links below:

• ANTITRUST LAWS I BUSINESS FRAUD I CORPORATE FRAUD I BUSINESS AND ANTITRUST I PREDATORY PRICING – Antitrust Laws and Potential Liability for Predatory Pricing
• UNFAIR PRACTICES ACT I UNFAIR COMPETITION LAW I ANTITRUST LAWS I BUSINESS FRAUD I CORPORATE FRAUD I CALIFORNIA UNFAIR COMPETITION LAW – Producers Engaged in Price Fixing Drive out Competition in Violation of California Unfair Practices Act and Unfair Comp

For further articles discussing fraud and false advertisement please see the links below: 

• FRAUD I CORONAVIRUS FRAUD SCHEMES I COVID-19 SCAMS – THE CORONAVIRUS CRISIS HAS CREATED AN INCREASE IN FRAUD AND THE FTC IS WARNING CONSUMERS
• FRAUD I BREACH OF FIDUCIARY DUTY – What Fiduciary Duties Are Owed? A Fiduciary Owes The Duty Of Undivided Loyalty. What Happens If A Fiduciary Breaches Their Duty Of Undivided Loyalty?
• FRAUD I BREACH OF FIDUCIARY DUTY – What Fiduciary Duties Are Owed? A Fiduciary Owes The Duty To Use Reasonable Care. What Happens If A Fiduciary Breaches Their Duty To Use Reasonable Care?
• FRAUD I BREACH OF FIDUCIARY DUTY – What Is A Fiduciary Duty? What Does A Breach Of Fiduciary Duty Mean? What Is A Fiduciary?
• FRAUD – What Constitutes Fraud In California? What Does A Cause Of Action For Fraud By Intentional Misrepresentation In California Mean?
• FRAUD – WHAT CONSTITUTES FRAUD IN CALIFORNIA? WHAT DOES A CAUSE OF ACTION FOR FRAUD BY FALSE PROMISE IN CALIFORNIA MEAN?
• FRAUD VIA FALSE PROMISE OR PROMISSORY FRAUD
• INTENTIONAL FRAUD AND DECEIT
• CONVERSION OR BREACH OF FIDUCIARY DUTY 

• FRAUDULENT CONCEALMENT OR CONCEALMENT FRAUD
• FRAUD – Legal Liability For Fraud – Civil Tort For Conversion Or Breach Of Fiduciary Duty
• CONSTRUCTIVE FRAUD OR NEGLIGENT MISREPRESENTATION
• CORPORATE LAW – Corporations Claiming Personhood And Fiduciary Duties
• FALSE ADVERTISING I FRAUD I ENDORSEMENT I SOCIAL MEDIA FRAUD – Social Media Influencers Found Liable For False Advertising And Endorsement Fraud

For Fraud and Breach of Fiduciary Verdicts in California: Our articles discussing Fraud verdicts in California are included below:

• BREACH OF CONTRACT I FRAUD I VERDICT – Homeowner Recovers $1.63 Million In Damages Against Mortgage Fraud Broker In Fraud, Negligent Misrepresentation, Breach Of Fiduciary Duty Action
• BREACH OF CONTRACT I BUSINESS LAW – FRAUD DAMAGES IN BREACH OF CONTRACT – COMPANY FAILS TO PAY FORMER PRESIDENT’S SHARES, PRESIDENT SECURES VERDICT FOR $553,000:
• FRAUD I BREACH OF FIDUCIARY – Drew Brees Alleges Breach Of Fiduciary Duty Against SD Jeweler Vahid Moradi
• FRAUD I BREACH OF FIDUCIARY – Jury awards Brees $6 million in Jewelry Fraud Lawsuit
• BREACH OF CONTRACT I FRAUD I VERDICT – Homeowner Recovers $1.63 Million In Damages Against Mortgage Fraud Broker In Fraud, Negligent Misrepresentation, Breach Of Fiduciary Duty Action
• FRAUD – Legal Liability for Fraud – Civil Tort for Conversion or Breach of Fiduciary Duty

For articles discussing Fraud and False Advertisement Damages please see the links below:

• FRAUD I DAMAGES I CIVIL LITIGATION – Punitive Damages Vs. Compensatory Damages
• FRAUD I DAMAGES I CIVIL LITIGATION – What Are Punitive Damages?

Recovery from the Victims Of Corporate Fraud Compensation Fund of California: For articles discussing damages:

• BUSINESS FRAUD I CORPORATE FRAUD – Payment From The Victims Of Corporate Fraud – VCFCF: Victims Of Corporate Fraud Compensation Fund
• BUSINESS FRAUD I CORPORATE FRAUD I DAMAGES – Compensation For “Aggrieved Person” Who Has Obtained A “Final Judgment” Against A Corporation Based Upon The Corporation’s Fraud, Misrepresentation Or Deceit – VCFCF: Victims Of Corporate Fraud Compensation Fun

 Victim of False Advertisements or Deceptive Business Practices?