Chapter 19 - Chapter 19 Lesson Chapter 19 Lesson 19 -...

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Chapter 19 Lesson Chapter 19 Lesson 19 - Unfair and Deceptive Trade Practices and Advertising OBJECTIVES: After completing this lesson, the required reading, and the assignments, learners will be able to: 1. Describe how the FTC operates. 2. Identify several types of deceptive and/or unfair trade practices . Federal Trade Commission (FTC) / Common Law Protections The Federal Trade Commission (FTC) is the federal regulatory agency with the power to issue and enforce rules which define and prohibit various forms of unfair and/or deceptive methods of competition. The FTC does so by issuing trade practice or trade regulation rules, investigating marketing actions or behavior which may violate those rules, and requiring violators to run corrective advertising to remedy the damage done by previous misleading advertisements or other forms of marketing. Individuals may not bring private causes of action pursuant to the Federal Trade Commission Act. However, some of the business tort causes of action covered in Chapters 11 and 16, such as trade disparagement, theft of trade secrets, and trademark infringement, do provide individuals with a private cause of action for certain unfair trade practices. National Advertising Division You may skip this section. Labeling All products are required to provide consumers with nutritional information labeling, pursuant to the 1990 Nutrition Labeling and Education Act. Deceptive Acts and Practices Pyramid Sales Schemes Several years ago, my former husband had an employee ("Terry") who kept nagging him for a meeting to discuss an investment opportunity in which he thought my husband would be interested. Finally, one evening after work my husband invited Terry to our house to hear his pitch. When Terry came to our house, he brought with him a binder full of paper, not containing information about the actual investment, but instead it was full of page after page of photos of couples wearing lots of diamonds and other jewelry (both men and women), standing in the driveways of their palatial homes, leaning against their large luxury cars, boats and RVs. Terry kept telling my husband that if he began to sell the "product" he too could amass this type of wealth. Clearly, Terry believed that if he persuaded Eric to invest, Terry would also be one step closer to retirement, which he fully expected to do within two to three years! Not once during the entire evening did he tell my husband what product he'd have to sell to obtain these riches. If you were going to quit your job to begin marketing a new product, wouldn't you be at least
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Chapter 19 - Chapter 19 Lesson Chapter 19 Lesson 19 -...

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