
For years, smart shoppers abided by the term Caveat
Emptor, or “let the buyer beware”.
 However now, society demands that manufacturers be held responsible
for foreseeable injuries to people who use their products, hence the
term Caveat Venditor: “let the seller be aware”.

Any act that misleads consumers.
 Fraudulent misrepresentation
 Work-at-home schemes
 Unordered merchandise
 Bait-and-switch

Therefore, most states have enacted either the
Uniform Deceptive Trade Practices Act or their own
similar laws.
 DTPA: enacted to protect consumers against false, misleading, and
deceptive business and insurance practices.

Apply to all transactions between consumers and
people conducting business.
 When you buy things for personal use from a business, consumer laws
protect you.

However, if you buy something directly from another
consumer, then consumer protection laws in most
states do not protect you.
 The Federal Trade Commission (FTC) and the Bureau of Consumer
Protection investigate those violations to laws.
FRAUDULENT
MISREPRESENTATION
WORK-AT-HOME
SCHEMES
Any statement that
 Offers sounding attractive
deceives the buyer.
such as “Would you like to
 Usually occurs when a seller
earn hundreds of dollars a
misstates the facts about
week at home in your
something that is important
leisure time?”
to the consumer.
 Some plans are legitimate,
 Ex.) Making false statements
however, home employment
about or not disclosing any fact
schemes are among the oldest
that would cause a buyer to avoid
kinds of classified advertising
entering into a contract.
fraud.

UNORDERED
MERCHANDISE

Under federal and state
laws, unordered
merchandise may be
considered a gift.
 Two kinds of products can be
sent legally without consumer’s
consent: manufacturers’ free
samples and merchandise
mailed by charities.
FALSE ADVERTISING

FTC regulates false
advertising on the national
level and has the power to
issue Cease and Desist
Orders: legally binding
orders to stop a practice
that would mislead the
public.
 Ex.) Bait and switch advertising
When a store advertises bargains
that do not really exist to lure
customers in hopes that they will
buy more expensive merchandise.
Illegal.
 The following sales practices may
be signs of bait and switch:
 Attempting to discourage customers by
criticizing advertised products.
 Claiming the advertised products are out
of stock..
 Cannot promise delivery within
reasonable period of time.
 Demonstrating product more expensive
than advertised.

1.
2.
Using one of the aforementioned deceptive sales
practices, you are to design and create an
advertisement depicting that particular sales practice.
On the back of the advertisement, you are to explain
your ad and tell me why you feel the ad would be
misleading to consumers.