What Are Deceptive Trade Practices and How Can You Protect Yourself From Them?
As a savvy business owner, you have learned to keep your eyes peeled and your ears open for good business deals, and you have learned to spot the “too good to be trues” from the real deals…or have you? Unfortunately, it is not uncommon for business owners to fall victim to business deals that use misleading tactics and false claims to lure in investors. Fortunately, if you fall victim to such shady dealings, you may be able to recover your investment and start back at square one.
Alabama’s Deceptive Trade Practice Laws
Though Alabama has not adopted the Uniform Deceptive Trade Practices Act, it does have protections in place to protect consumers and business owners alike from bad business practices. Under Alabama’s criminal code, within the section dealing with forgery and fraudulent practices, is Section 13A-9-42, which deals with false advertising. According to this section, a person commits false advertising if, in connection with the promotion of a transfer, sale, use, or consumption of property or services, he or she makes false or misleading statements in any advertisement addressed to the public or a substantial number of persons. However, for a person to be found guilty of false advertising, it must be shown that he or she acted purposefully, maliciously, and with disregard for others. The burden of proof is on the defendant to prove that he or she acted neither knowingly or recklessly.
If a person is found guilty of false advertising in Alabama, he or she will be charged with a Class B misdemeanor.
Consequences of False Advertising in Alabama
If a judge or jury finds a person guilty of false advertising, they may order the defendant to pay actual damages or up to $100, whichever is greater. Depending on the nature of the indiscretion and how much it inconvenienced the plaintiff, however, the judge may order the defendant to pay up to three times actual damages. If the conviction is the defendant’s second of a similar nature, he or she may be charged with a Class A misdemeanor, in which case he or she may be forced to pay a civil penalty of up to $25,000 per violation in addition to actual damages.
Examples of False Advertising in Business Dealings
Deceptive business practices can take many forms. For instance, a car dealer may roll back the mileage on a vehicle and sell it for more than the car is worth. A repairman might tell a vehicle owner that he needs new brake pads when in actuality, his brake pads are just fine. In terms of business transactions, the same concept more or less applies. For example, a business owner might encourage a buyout under the pretenses that his or her company is profitable, when in actuality, the company is in the red. Or a real estate broker might misrepresent a commercial property’s age, dimensions, prior ownership, or other key details that, had the buyer had knowledge of them at the time of the transaction, would have changed the outcome of the deal.
When it comes to business transactions, false advertising can have disastrous financial consequences for the victim. Though business owners should always work with an attorney before going through with any major transaction, it is not unheard of for a business owner to fall victim to costly scams.
How You Can Protect Yourself From Business Scams
As mentioned above, the best way to avoid costly business scams is to work with a knowledgeable and shrewd Mobile business lawyer. Our team at Cloud Willis & Ellis can advise you in all of your business dealings and ensure that you do not fall victim to any tricks. We can also ensure that all of your legitimate business transactions go according to plan, and that they turn out in your favor. To learn more about how our team can help you make better business decisions, contact our Mobile law firm today.