Laws protecting consumers from unfair commercial practices have been enacted worldwide, prohibiting deceptive advertising, false claims, and misleading tactics. Examples include the Consumer Protection Act in Barbados and the Commercial Practices Act in Australia. Laws may also regulate telemarketing and door-to-door sales.
Historically, a buyer was responsible for understanding what they were buying and under what conditions. Known as “cavet emptor,” a Latin term meaning “let the buyer look at himself,” this perspective has allowed sellers to use any available tactic to persuade a prospective buyer to buy their goods or services. Eventually, jurisdictions around the world began enacting laws aimed at protecting consumers by declaring many practices as unfair commercial practices. Jurisdictions will differ in what they consider to be unfair trading practices; however, most focus on practices intended to mislead or deceive consumers.
Numerous countries around the world have enacted national laws aimed at preventing sellers of goods or services from using deceptive, fraudulent or confusing tactics to persuade consumers to buy their goods or services. Examples of countries and their corresponding legislation include: Barbados — Consumer Protection Act; Australia — Commercial Practices Act 1974; and the European Union — Consumer Protection for Unfair Trade Regulations. Within the United States, individual states have enacted laws addressing issues related to unfair trading practices.
Most legislation directed at unfair commercial practices makes it illegal to intentionally deceive or lie to consumers or use fraudulent or misleading advertising in an attempt to sell goods or services. More specifically, the laws often prohibit advertising that could confuse or mislead the consumer as to the origin, manufacturer or sponsorship of a good. For example, an advertisement that insinuates that a product has been endorsed by a reputable person or organization when, in fact, it is not, may be a violation of an unfair commercial practices law.
Another common provision in legislation aimed at preventing unfair trading practices includes a prohibition on claiming that a good contains ingredients it does not contain, or that a product is new, when it is used. Laws also often prevent advertising of a good when the seller plans to actually sell another good to the consumer. Claims about the possibility of winning a prize for the purchase of a good or service may also be prohibited, unless the seller actually awards the advertised prizes.
Laws enacted to combat unfair commercial practices may also cover how a seller can contact consumers in an attempt to sell goods or services. Some laws prohibit telemarketing by salespeople or limit how long or how telemarketing can be used as a sales tool. Door-to-door sales may also be governed by unfair commercial practices legislation. With both telemarketing and door-to-door selling, most laws require the seller to identify who they are and the purpose of the call or visit immediately after contacting the consumer.
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