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Three ways to avoid deceptive practices claims.

  • February 27th, 2013
  • Wendy Carlisle
  • Comments Off on Three ways to avoid deceptive practices claims.

file8891251929025Each state has consumer protection laws prohibiting what are deemed unfair and deceptive trade practices.  Within all that legalese of prohibited conduct there are many traps for the unwary. Fortunately, there are some things you can do to protect your business from these allegations—not to mention keep your customer ’s trust, and perhaps even avoid a lawsuit.

Consumer protection laws vary on what conduct is prohibited, but generally prohibit companies from representing that the goods or services they are selling have uses, benefits, qualities, approval or sponsorship that they do not have, or are of particular standard, quality, grade, style or model, if they are of another. The laws also  usually  include  a  catch-all  provision  prohibiting any other conduct that creates the likelihood of confusion or misunderstanding.

Typically, a violation of the law can either be enforced by the state’s attorney general, or in some instances by an aggrieved consumer. The penalty for violations can be steep:  some state’s consumer protection laws allow the person suing to recover their attorney’s fees and triple damages.

The following tips—no-brainers though they are—bear mentioning because even the most scrupulous company can find itself on the receiving end of a consumer fraud claim due to an honest mistake or an untrained employee.

1.  Don’t make promises you can’t keep.

Let proven facts sell your  products and  services.  Don’t say, for example, “your house will never burn down”  or “the police will be here in less than two minutes.”  Rely  on  trusted sources of  information regarding occurrences of crime and  home fires, and  the statistical decrease in crime and fire fatalities in homes with alarm systems, to sell your  products and services. If available, use  information specific to your  company about how many actual burglaries and  fires  were reported, and share any true stories about good outcomes.

2.  Keep up with your jurisdiction’s requirements for licensing, permits, and code compliance.

  • Know and  comply with any  licensing laws, and  the  requirements for  keeping and  renewing the  license (e.g., continuing education, insurance);
  • Get all necessary permits to sell or install an alarm system;
  • Sell and install the alarm products in compliance with state and  local laws  regarding what equipment is required and  where (e.g.,  a lot  of jurisdictions require a certain number and location of smoke detectors or carbon monoxide detectors in certain installations

3.  Don’t claim affiliations you don’t have.

This  is the  ultimate no-brainer, but  it does  happen so it bears mentioning.  If you  let an  association membership lapse, you cannot tell people you  are a member of that association. And if you are no longer an authorized dealer, you cannot tell  people you  are  an  authorized dealer. Sometimes this  means getting new  marketing materials, which can  be  expensive and  time-consuming.  But it must be done to avoid a claim  that you  misrepresented your  company.



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