As a business owner, you may face allegations of deceptive trade practices from a customer who is displeased with your company. Now, these allegations may be completely false, but you still need to know what a deceptive trade practice is and what is not allowed by law so that you can determine what steps to take to protect your company’s reputation and financial assets.
These issues are defined and governed by the Texas Deceptive Trade Practices Act, and actions that are prohibited include:
- Knowing that customers lack specific knowledge and taking advantage of that.
- Breaching a warranty, which could be either verbal or written.
- Making claims about a product that it cannot actually support; i.e., claiming that a fitness product is guaranteed to make someone lose 20 pounds when it cannot do so.
- Engaging in a pyramid scheme.
- Selling fake products and claiming they are made by a well-known manufacturer.
- Pretending that used or secondhand goods are actually brand new.
- Acting as if a product or service has a specific endorsement or sponsorship when it does not.
- Misrepresenting facts or making them up to disparage another company.
- Advertising something in a way that it will not be sold; for instance, running a promotion saying that a product is half off when the actual product is being sold at full price.
These are just a handful of examples, but you can clearly see how serious these types of allegations are and how complicated things can get when you feel that your company has not breached the Act. If you find yourself in this position, it is crucial that you know what steps to take.
