Businesses have products and services to sell. To sell those things, they must market them and advertise them in a way that attracts consumers. However, it is critical to use caution in these efforts, as engaging in deceptive or unfair practices could result in a costly legal battle.
In Minnesota, businesses must comply with the Deceptive Trade Practices statutes. Below, we explain a few examples of common violations of these statutes and what business owners can do to avoid lawsuits.
Misrepresenting items as those of someone else
We have all seen knock-off items that closely resemble other legitimate companies. However, selling something with another company’s name on it or claiming to provide services from someone else can result in a deceptive trade practice complaint.
Misrepresenting geographic origins
There are many products people buy because they are made in the U.S. or right here in Minnesota, from clothing to beer. Therefore, claiming that a product comes from a specific area when it does not is a deceptive trade practice.
Misrepresenting characteristics, ingredients, benefits
Companies must be truthful in representations of their product. This means being accurate with claims about what it does, who approved it, and what is in it.
Gwyneth Paltrow’s company, Goop, was sued for this type of misrepresentation. According to reports, the company was reportedly selling jade and rose quartz eggs that it claimed had health benefits from balancing hormones to regulating menstrual cycles. Citing a lack of scientific support for these claims, prosecutors filed a lawsuit against the company that resulted in a $145,000 settlement.
Avoiding these violations
To avoid these and other violations, business owners must use caution when it comes to selling, marketing and describing their products. Focus on accuracy and be prepared to back up any claims you make about goods and services.
However, it is not always easy to see the line between an advertising strategy and a legal violation. As such, disputes can arise, even if a business owner had no knowledge of deceptive practices or intention to mislead consumers. Because these cases can be so complex, it is wise for business owners to consult and attorney should any legal claims arise.