Law of Commerce
Unfair or Deceptive Practices or Acts are covered under Section 5 of the US Federal Trade
Commission Act popularly known as the FTC Act (15 USC 45) that prohibits unfair or
deceptive acts or/and practices that affect commerce. FTC places prohibition to all persons who
are engaged in commerce or any form of business including banks. Section 8 of the US Federal
Deposit Insurance Act, FTC Board has the authority or power to take necessary or appropriate
action in the event of perpetration of unfair or deceptive acts or any illegal practices have been
The legal standards that apply to unfairness and deception are all independent and are not related
to each other, depending on the circumstances and facts of each case, an act may be unfair or
deceptive or both. The following are some of Unfair Acts or Practices;
Depending on each case an act or practice is lawfully unfair when it,
a) It causes or it’s likely to cause or injure substantially the consumers.
b) For reasons beyond the scope of the consumers, the harm cannot be reasonably avoided.
c) Its not outweighed by any countervailing benefits to the consumers or business rivals.
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An act is deceptive when there is a representation, omission, conduct or practice that misleads or
its most likely to mislead consumers. The misleading representation, practice or omission is
The FTC has been instrumental in taming banks, insurance companies and other companies that
have been profiting unfairly from their customers. On 20th February, 2015, FTC played a crucial
role in charging the owners of the Wristband Mosquito Repellent for deceptive business
practices while it also refunded checks worth $464,000 to consumers who had lost money buying
defective calorie blocking diet pills that had been marketed for fat burning. (FTC, 2015)
To conclude, FTC has achieved a lot of successes in controlling unfair trade practices in the USA
and also punishing the offenders besides refunding any funds that may have been recovered back
to the rightful owners.
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Federal Trade Commission (2015) Protecting American Consumers, Free Credit Report,
Retrieved on 23 February 2015 from www.ftc.gov