Consumer Protection Attorneys Help Hold Businesses Accountable for Deceptive and Fraudulent Practices

Federal and state laws protect consumers from a wide range of deceptive, fraudulent, and unethical business practices. While consumer protection laws are expansive and vary widely, in general, they help preserve consumers’ privacy and prevent businesses from taking advantage of people in vulnerable positions.

At Sommers Schwartz, we aggressively protect consumers’ rights under all state and federal consumer protection statutes. Our dedicated team of attorneys represents large groups of clients through class action lawsuits. We have decades of combined experience litigating complex consumer protection cases. We know what it takes to hold businesses accountable for their deceitful, reckless, and unethical practices.

Consumer Protection Facts and Statistics

The Federal Trade Commission is the government entity tasked with enforcing many of the consumer protection laws. According to the FTC, it received 3.2 million consumer reports in 2019 concerning suspect business practices. Of those, the top three categories involved:

  1. Identity theft
  2. Imposter scams
  3. Telephone and mobile services scams

Included in that figure are 1.7 million reports of fraud. As a result of fraudulent activity, 23 percent of consumers suffered financial harm; their total loss amounted to more than $1.9 billion.

The COVID-19 pandemic contributed to a massive increase in consumer protection complaints as some unscrupulous businesses attempted to exploit struggling consumers. In 2020, the FTC received a staggering 4.7 million consumer reports, including 2.1 million reports of fraud. Thirty-four percent of those reports lost money totaling over $3.3 billion. 

The five top fraud categories were:

  • Online shopping
  • Internet services
  • Imposter scams
  • Prizes, sweepstakes, and lotteries
  • Telephones and mobile services

The most common types of illegal behavior reported involved:

  • Fraud
  • Identity theft
  • Do-Not-Call violations

In 2020, the FTC received nearly four million complaints that businesses violated requests to be put on the “do-not-call list.” Currently, there are more than 241 million people on the do-not-call list registry.

Fraud Affects Americans of All Ages

Historically, fraud has disproportionately affected older age groups, who consistently lose higher median dollar amounts to scammers. Younger adults, however, tend to lose money more often. By age group, the most common types of fraud in 2020 involved:

20 to 29-years old:

  1. Online shopping scams
  2. Text message scams
  3. Government imposter scams

30 to 59-years old:

  1. Text message scams
  2. Online shopping scams
  3. Government imposter scams

60 to 69-years old:

  1. Text message scams
  2. Government imposter scams
  3. Online shopping scams

70 to 79-years old:

  1. Government imposter scams
  2. Text message scams
  3. Business imposter scams

80 to 89-years old:

  1. Government imposter scams
  2. Business imposter scams
  3. Sweepstakes/lottery scams

What Are Consumer Protection Laws?

Business is competitive. Companies that bring in revenue survive, while those that do not go out of business. This law of the jungle can put significant pressure on business owners, executives, and managers to run their business by cutting corners, exaggerating their value, and earning larger profits. Consumer protection laws refer to a set of rules that all businesses must obey.

While many different laws govern how businesses can interact with the public, consumer protection laws protect consumers’ privacy and prevent companies from engaging in unfair, fraudulent, and deceptive practices. These laws often specifically focus on protecting especially vulnerable groups of consumers.

A few of the most critical consumer protection laws include:

  • The Federal Trade Commission Act
  • The Clayton Act
  • The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
  • The Better Online Ticket Sales Act
  • The Children’s Online Privacy Protection Act
  • The College Scholarship Fraud Prevention Act of 2000
  • The Consumer Leasing Act
  • The Consumer Review Fairness Act
  • The Credit Card Accountability Responsibility and Disclosure Act of 2009 (The “Credit CARD” Act)
  • The Crimes Against Charitable Americans Act of 2001
  • Do-Not-Call Registry Legislation
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act
  • Economic Growth, Regulatory Relief, and Consumer Protection Act
  • The Elder Abuse Prevention and Prosecution Act
  • The Equal Credit Opportunity Act
  • The Fair and Accurate Credit Transactions Act of 2003
  • The Fair Credit Billing Act
  • The Fair Debt Collection Practices Act
  • The Fair Labeling and Packaging Act
  • The Fur Product Labeling Act
  • The Gramm-Leach-Bliley Act
  • The Hobby Protection Act
  • The Home Equity Loan Consumer Protection Act
  • The Identity Theft and Assumption Deterrence Act of 1998
  • The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act
  • The Military Lending Act
  • The Opioid Addiction Recovery Fraud Prevention Act of 2018
  • The Pandemic and All-Hazards Preparedness Act
  • The Patient Right to Know Drug Prices Act
  • The Restore Online Shoppers’ Confidence Act
  • The Telemarketing and Consumer Fraud and Abuse Prevention Act
  • The Telephone Disclosure and Dispute Resolution Act of 1992
  • The Truth in Lending Act
  • The U.S. Safe Web Act

Although lengthy, this is not a complete list of the current federal consumer protection laws. The federal government takes unethical and unfair business practices seriously and continuously adds protections by creating new statutes.

At Sommers Schwartz, we are committed to consumer protection advocacy. Our team of attorneys works tirelessly to stay up-to-date on all newly passed legislation to ensure that we remain on the cutting edge.

Common Consumer Protection Claims

Given the breadth of the consumer protection laws in the United States, it can be challenging to understand what businesses can and cannot do. Often, a consumer’s gut feeling that a business practice seems unfair can be a good indication that a corresponding law addresses the issue.

Below are a few of the most common types of consumer protection claims:

Deceptive Advertising

Businesses cannot mislead consumers about the make-up, efficacy, or quality of their products. For example, these claims fit under the deceptive advertising umbrella:

  • Inaccurate use of terms like “organic,” “free-range,” “made in the USA,” “natural,” or “light.”
  • False claims of scientific, academic, or professional support.
  • Misleading pictures or illustrations.
  • False claims that a product does or does not contain certain ingredients.

Deceptive Pricing

Businesses must be upfront about the prices they charge for their goods or services. If a business includes hidden fees or surcharges, it may violate deceptive pricing laws. Likewise, claiming to be selling a product on sale when it is not is illegal.

Pyramid Schemes

Pyramid schemes, also called Ponzi schemes, are presented to investors as legitimate business opportunities. In a pyramid scheme, investors are paid when new investors join the scheme rather than from the legitimate sale of goods or services. Pyramid schemes rely on a consistent inflow of new investors. Thus, those already involved in these schemes are highly motivated to “sell” the product. A variety of consumer protection laws protect consumers against pyramid schemes.

Internet Scams

Internet scam artists try to get consumers to provide them with personal information that the scheme’s orchestrator will either sell or use for their own benefit. These scams take various forms, including email phishing, social media scams, and text-message scams. Often, they involve sham or illegitimate businesses.

Chain Letters

Modern chain letter scams involve email and typically request the recipient send money or other items to one or more people on a list. The email usually promises that once other people receive the email, it will eventually become the recipient’s turn to receive a payout (multiple times over what they contributed), and their name will appear among the list of payees. However, in reality, the payment goes to the scam’s orchestrator, and the recipient never receives any proceeds from the chain letter.

Deceptive Credit Schemes

Credit reports should be free to obtain. However, some businesses charge consumers to access this free information. Other businesses reach out to consumers offering “credit repair” services that do nothing to repair someone’s credit (or worse, expose the consumer to identity theft or fraud).

Consumer Privacy Violations

Federal law requires businesses to take specific steps to preserve consumers’ privacy. This is especially the case with sensitive financial information and children’s information. Companies that sell consumers’ data without consent or handle consumers’ information recklessly may be in violation of federal consumer protection laws.

Telemarketing

Repeated phone calls from businesses trying to sell something are disruptive and irritating. In response to the overwhelming number of complaints from consumers, federal lawmakers passed legislation outlining your rights when it comes to requesting to be added to do-not-call lists. Companies that violate consumers’ requests can be held accountable.

Aggressive Debt Collection

When a debt collector calls, it is vital that you know your rights. Debt collectors are required to avoid unfair, misleading, and abusive tactics when trying to get consumers to pay their debts. For example, federal law prohibits debt collectors from calling between 9 p.m. and 8 a.m. and prevents them from calling while someone is at work. These protections pertain to credit card debt, medical debt, mortgage debt, and other household debts.

Short-Term Lending

Short-term lenders like “payday” loan companies are notorious for taking advantage of consumers in urgent, difficult financial situations. Unfortunately, the interest rates and penalties on these loans often result in borrowers owing many times the original amount they borrowed. In addition to interest-rate limits and other conditions on the terms of these loans, federal law requires lenders to be upfront about the fees they charge.

Class Action Lawsuits Arising From False or Misleading Claims

When a business engages in predatory practices, chances are high that more than just a few consumers are affected. Thus, class action lawsuits are common in consumer protection cases.

A consumer protection class action lawsuit is one in which a group of similarly situated plaintiffs bring their claims as a group or “class.” While not every consumer protection claim is appropriate for class action litigation, this kind of legal action offers plaintiffs many benefits. 

  • Rather than every plaintiff preparing their own case, plaintiffs can save much work—and expense—by combining similar claims into one lawsuit. This enables a group of plaintiffs to bring claims that collectively amount to significant amounts but may not be worth the cost of pursuing individually.
  • Defendants facing a class action consumer protection lawsuit may be more willing to immediately engage in fair negotiations, knowing that they face significant liability for the combined value of many small claims.
  • Class action lawsuits can be quicker in many situations. This is because a court can hear one case and render a verdict that applies to a group of similar plaintiffs rather than decide many individual cases over years of litigation.

To bring a class-action lawsuit, the plaintiffs must obtain class certification from the court. While the nuances of class certification are quite complex, it requires the class of plaintiffs to meet the following criteria:

  • The plaintiffs making up the class must be identifiable.
  • The class must consist of a sufficient number of plaintiffs to make individual litigation impracticable.
  • The class members must have all suffered the same type of harm.
  • The claims and likely defenses must be similar among plaintiffs.
  • The class representative must adequately represent the interests of the individual class members.

Consumer protection claims often make good candidates for class action lawsuits because unfair, fraudulent, and deceptive business practices typically affect many consumers in similar ways.

The Importance of Experienced Counsel in a Consumer Protection Claim

Consumer protection cases often involve many plaintiffs, all of whom were taken advantage of, deceived, or defrauded. While a single plaintiff’s claim may not cause concern to a large business, companies take it seriously when plaintiffs band together to bring a class-action lawsuit. However, these cases often take years to work their way through the justice system and require a high level of knowledge and skill. 

At Sommers Schwartz, we have extensive experience handling consumer protection lawsuits on behalf of individual clients as well as large classes of plaintiffs. Our attorneys routinely serve as class counsel in high-stakes class action lawsuits, not just in the area of consumer protection but also in employment lawsuits, product liability claims, and securities cases.

Our Results Speak for Themselves

At Sommers Schwartz, we pride ourselves on offering an unrivaled level of skill and dedication to each client. Our mission is to stand up for consumers against unethical and deceptive businesses. While money damages are only one of the metrics by which we gauge our success, these awards not only help our clients in their own lives but also punish businesses for their wrongful conduct.

A few of our more recent consumer protection cases are described below:

$89 million recovered on behalf of a group of patients being overcharged for the pharmaceutical drugs Bextra and Celex.

$46 million recovered in a RICO class-action lawsuit involving a plaintiff who claimed he was defrauded through a pyramid scheme.

$12 million recovered for a purchaser of a protein supplement drink that overstated the amount of protein in the drink.

$7 million recovered in a spam fax advertising case involving a restaurant that sent out more than 14,000 fax advertisements to 7,700 phone numbers.

Every case is unique. When the dedicated consumer protection lawyers at Sommers Schwartz are on your team, you can rest assured that your case is in capable hands.

Reach Out to a Dedicated Consumer Protection Attorney at Sommers Schwartz to Learn More

If you were defrauded, misled, or otherwise mistreated by a business, you are not alone. Tens of thousands of people each year fall victim to predatory business practices. At Sommers Schwartz, we are here to help. Our attorneys are frequently named lead counsel in some of the most complex and high-stake consumer protection class-action lawsuits. Over the decades that we have handled consumer protection cases, we have earned a nationwide reputation for providing an exceptional level of representation to clients across the United States.

To learn more, call to schedule a consultation with one of our dedicated consumer protection attorneys today. You can reach us at 248-556-3439. You can also fill out our online form, and an attorney will reach out to you shortly.

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