Deceptive Trade Practices

Federal legislation and statutes in every state prohibit employment of unfair or deceptive trade practices and unfair competition in business. The Federal Trade Commission regulates federal laws designed to prohibit a series of specific practices prohibited in interstate commerce. Several states have established consumer protection offices as part of the state attorney general offices.

The Federal Trade Commission Act (FTCA), originally passed in 1914 and amended several times thereafter, was the original statute in the United States prohibiting “unfair or deceptive trade acts or practices.” Development of the federal law was related to federal antitrust and trademark infringement legislation. Prior to the enactment in the 1960s of state statutes prohibiting deceptive trade practices, the main focus of state law in this area was “unfair competition,” which refers to the tort action for practices employed by businesses to confuse consumers as to the source of a product. The tort action for a business “passing off” its goods as those of another was based largely on the common law tort action for trademark infringement.

Because the law governing deceptive trade practices was undefined and unclear, the National Conference of Commissioners on Uniform State Laws in 1964 drafted the Uniform Deceptive Trade Practices Act. The NCCUSL revised this uniform law in 1966. The law was originally “designed to bring state law up to date by removing undue restrictions on the common law action for deceptive trade practices.” Only eleven states have adopted this act, but it has had a significant effect on other states. Most state deceptive or unfair trade practices statutes were originally enacted between the mid-1960s and mid-1970s.


Inside Deceptive Trade Practices