Question

The FTC has responsibility for preventing unfair methods of competition and unfair and deceptive business practices. Describe three examples of business activities that could be declared unlawful by the FTC pursuant to these powers.

Answer 1

Three examples of business activities that could be declared unlawful by the FTC:

Three examples of business activities that could be declared unlawful by the FTC are:

(a) Under the power to investigate and prevent deceptive trade practices, the FTC would declar as unlawful is the use of language that the intended audience cannot easily understand. If a product is required to have a disclosure to the public, it must be stated in language that the targ audience will understand.

(b) In order to prevent deception of the public, a disclosure must be placed in the advertisement of the product in proximity to the claim that it is qualifying. If there is confusion about the disclosure, then it is unlawful.

(c) Any business activity that causes injury to a consumer is considered to be unlawful. For example if a company issues checks for a nominal amount with an agreement written in tiny legalese lettering on the back of that check that commits the casher of the check to a monthly payment for services would be unlawful because of the deceptive nature and intent to bind an unwary consumer to a contract to their detriment.