Legal Definitions - Little FTC Act

A Little FTC Act refers to state-level laws designed to protect consumers from unfair and deceptive business practices. These acts are modeled after the federal FTC Act (Federal Trade Commission Act), which prohibits unfair methods of competition and unfair or deceptive acts or practices affecting commerce.

Essentially, a Little FTC Act gives state authorities and, in many cases, individual consumers, the power to challenge businesses engaging in misleading advertising, fraudulent sales tactics, or other practices that exploit consumers. These laws are often broad in scope, allowing courts to determine what constitutes an "unfair" or "deceptive" practice based on the specific circumstances, rather than listing every prohibited action.

Here are some examples of how a Little FTC Act might apply:

• Example 1: Deceptive Service Claims

  A local HVAC repair company advertises a "full system diagnostic" for a flat fee of $49, promising to identify all issues. However, when technicians arrive, they quickly declare major, expensive repairs are immediately necessary without performing a thorough diagnostic, often pressuring homeowners into costly services they may not need. If a consumer feels they were misled and overcharged, they could potentially file a lawsuit under their state's Little FTC Act, arguing that the company's advertising was deceptive and its practices unfair.

• Example 2: Misleading Product Labeling

  A food manufacturer markets a snack bar as "all-natural" and "sugar-free," prominently displaying these claims on the packaging. However, an independent lab test reveals the product contains artificial sweeteners and genetically modified ingredients. Consumers who purchased the product based on these false claims could potentially bring a class-action lawsuit or individual claims under a state's Little FTC Act, asserting that the manufacturer engaged in deceptive labeling and advertising practices.

• Example 3: Unfair Debt Collection Practices

  A debt collection agency repeatedly calls a consumer's workplace, even after being told by the consumer that their employer prohibits such calls. The agency also threatens the consumer with arrest for non-payment, which is not legally possible for most consumer debts. These aggressive and misleading tactics could be considered unfair and deceptive practices under a state's Little FTC Act, allowing the consumer to seek legal recourse against the collection agency for harassment and misrepresentation.