State, Federal Laws on Unfair, Deceptive Trade Practices

By John M. Tatum, published on November 30, 2011, in Business in Savannah.

A deceptive trade practice is generally defined as an action by a business which creates confusion or a misunderstanding about the source or sponsorship of a product or service. From false advertising to odometer tampering, deceptive trade practices are prohibited by federal and state law.

The Federal Lanham Act, adopted by Congress in 1946, generally regulates the use of trademarks in interstate commerce. The Lanham Act and Georgia’s Uniform Deceptive Trade Practices Act, are intended to protect fair competition and prohibit such practices as passing off goods and services as those of another; causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of goods or services; causing likelihood of confusion or of misunderstanding as to affiliation, connection or association with or certification by another; or representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or qualities that they do not have.

Deceptive trade practices can result in criminal prosecution or civil lawsuits to recover damages, including punitive damages. The Lanham Act authorizes the recovery of triple the amount of actual damages in some cases. A legal action against a business for engaging in unlawful practices typically involves injunctions or restraining orders forbidding the continued deceptive trade practice and punishment by way of fines, damages and even imprisonment.

Georgia’s Fair Business Practices Act of 1975 serves as the primary consumer protection law of this State and is enforced by the Governor’s Office of Consumer Affairs. The Act regulates unfair or deceptive practices in consumer transactions and regulates matters such as “going out of business” sales, telemarketing, multilevel marketing opportunities and certain promotional activities. This law applies to consumer transactions involving the sale, lease or rental of goods, services or property mainly for personal, family or household purposes. The Act authorizes private citizens to sue for violations in certain circumstances.

Violations of these laws often result in litigation. Businesses should be sure to operate within the legal boundaries of these important pieces of legislation at all times to avoid the possibility of being sued under either of these Acts.

Whether a consumer’s rights are compromised or a company needs to defend itself in court against charges of violating the Lanham Act, the Fair Business Practices Act or the Uniform Deceptive Trade Practices Act, a trial lawyer with experience in deceptive trade practices is essential.

Be aware of the Lanham Act and Georgia’s laws covering unfair business practices and deceptive trade practices and consult with an experienced trial lawyer who handles business disputes if you find yourself involved in a situation requiring legal action.
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John M. Tatum is business litigation attorney at HunterMaclean with more than 40 years of trial and appellate experience. He also served as the firm’s managing partner for 12 years. Mr. Tatum can be reached at 912-236-0261 or jtatum@huntermaclean.com.