What Counts as a Deceptive Business Practice in California?
- Examples of deceptive business practices in California include false advertising, hidden fees, and bait-and-switch tactics.
- California has strict laws to protect consumers and businesses from deceptive or fraudulent business acts.
- Individuals affected by deceptive business practices may be eligible to seek compensation through legal action.
- Our business litigation team can help you file an individual lawsuit or join a class action suit to recover damages.
In California, deceptive business practices refer to dishonest acts or communications intended to mislead consumers, investors, partners, or competitors. These unethical practices may result in financial losses or emotional harm while giving the deceptive business an unfair advantage. California has some of the strictest consumer protection laws in the country, holding companies accountable for violating ethical standards and encouraging those affected to take legal action.
Our California business litigation attorneys explain what qualifies as a deceptive business practice and how affected individuals or companies can seek compensation.
What Are Examples of Deceptive Business Practices?
Deceptive business practices in California can take many forms. However, they will generally fall into these categories:
- False advertising: False advertisements are misleading claims, unrealistic promises, or exaggerated benefits about a product or service.
- Bait-and-switch tactics: Bait-and-switch tactics occur when a business offers a price point for a product but pressures or tricks consumers into purchasing or investing in another, more expensive product.
- Hidden fees: Charging hidden fees without informing the consumer of the fees upfront is considered a deceptive business practice.
- Omission of information: A business may be liable for damages if it intentionally withholds key information about a product or contract.
While deceptive, fraudulent, and unfair business practices in California often overlap, fraud is characterized by intentional deception for the purpose of financial gain. Fraud is a criminal offense with a heightened pleading standard that requires reasonable particularity or very specific details of the fraud.
Key California Laws Against Deceptive Business Practices
California has stringent laws in place to prevent deceptive business practices and protect those affected by unethical acts, including the Unfair Competition Law, the False Advertising Law, California’s Corporations Code, the Consumer Legal Remedies Act (CLRA), and the California False Claims Act (CFCA).
Unfair Competition Law
The Unfair Competition Law (UCL) promotes fair competition in California by prohibiting businesses from engaging in practices that are:
- Unlawful: Any business act that is in violation of state or federal laws.
- Unfair: Unethical or corrupt business behavior or conduct that may not be technically illegal.
- Fraudulent: Business practices meant to deceive competitors, consumers, or others in the public.
If unlawful, unfair, or fraudulent business acts result in a disadvantage for competitors, the UCL provides remedies and ways for individuals and companies to seek compensation for losses.
False Advertising Law
The False Advertising Law in California prohibits any person, firm, or corporation from making misleading or untrue statements about products or services. For example, false advertising may include descriptions or details about a consumer product that are not accurate, promising benefits or results that are not proven, or advertising a price that is not accurate.
California Corporations Code
Section 309 of the California Corporations Code establishes a fiduciary duty for business directors, officers, and partners. This means that they are legally required to operate their businesses in good faith and act in the best interest of the company and shareholders. If they fail in this duty and participate in reckless or intentional business misconduct, such as intentionally breaching a contract for personal gain, they may face legal action and be held liable for damages.
Consumer Legal Remedies Act
The Consumer Legal Remedies Act comprises several statutes to specifically protect consumers from deceptive business practices, including fraud, false advertising, and other unfair acts. If consumers suffer financial loss or other damages as a result of these practices, the CLRA allows them to file a lawsuit to recover damages.
California False Claims Act
The California False Claims Act prohibits false advertising or misleading statements with the intent to fraudulently charge the state or local governments for goods or services or avoid paying owed money. Under the CFCA, the state attorney general can bring a false claims action against the party attempting to defraud the state.
Violations of these laws may result in injunctive relief, restitution, or civil penalties.
What To Do If You’re a Victim of a Deceptive Business Practice in California
If a deceptive business practice causes you harm or leads to damages, you have legal rights and may be entitled to compensation or restitution under California law. Follow these steps to protect your rights and pursue legal action:
- Collect documentation that supports your case, including receipts, copies of misleading ads, or communication with the company that demonstrates its unethical conduct.
- File a complaint with the California Attorney General’s Office or local consumer affairs office to report the deceptive act.
- Consider working with a deceptive business practice claims lawyer in California to file an individual lawsuit or join a class action lawsuit.
The Experienced Deceptive Business Practice Lawyers at Cutter Law Can Help
Our multi-generational, family-owned law firm has deep roots in Northern California, and we are committed to helping the communities we serve fight for justice.
When you work with our business litigation team, you have compassionate, skilled, and experienced attorneys on your side to help you hold the wrongdoers accountable. We understand California business laws and the legal landscape that can affect your case.
Family-owned, California-based, and client-focused. Call (888) 285-3333 or contact us online today to schedule a free consultation. We charge no upfront fees to hire our attorneys, and you pay nothing unless we win your case.
The California Whistleblower Protection Act provides state employees with guidance and protections for reporting violations of the California False Claims Act.
The California False Claims Act (CFCA) makes it a crime to make false statements when charging the state for goods or services.
Whistleblowers are protected by federal and California laws, which prohibit retaliation, including termination.