Consumer Fraud Claims
Every day a new consumer is scammed or defrauded by a greedy corporation. These consumers deserve to be compensated. However, many times the consumer does not even know they have been scammed or what to do about it. That’s where we come in.
CALIFORNIA CONSUMER FRAUD PROTECTIONS
California has a number of statutes meant to protect consumers from corporate malfeasance. We know these statutes inside and out and can use our knowledge to help get you paid.
If you feel like you have been misled by an advertisement, or victimized by a shady or deceptive business practice, you are probably right. Give us a call today for a free case evaluation.
TYPES OF CONSUMER FRAUD
Every day companies are coming up with new ways to pad their bottom line by defrauding their customers. Below are some of the most common ways corporations engage in consumer fraud.
FALSE ADVERTISING
California’s False Advertising Law, California Business and Professions Code Section 17500, et seq., makes it “unlawful for any person to make or disseminate or cause to be made or disseminated before the public in this state…any statement, concerning personal property or services, professional or otherwise…which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.”
Common Forms of False or Misleading Ads:
- False or misleading product illustrations
- False or misleading pricing
- False or misleading discount offers
- False or exaggerated claims about a product
- False or misleading ingredients labels
- False or misleading nutrition facts
DECEPTIVE BUSINESS PRACTICES
California Business and Professions Code Section 17200, et seq., sets forth the criteria for determining whether a business has engaged in unfair or deceptive business practices. There are three (3) prongs to this test:
1. Unfair — A challenged activity is “unfair” when “any injury it causes outweighs any benefits provided to consumers and the injury is one that the consumers themselves could not reasonably avoid.” Camacho v. Auto Club of Southern California, 142 Cal. App. 4th 1394, 1403 (2006)
2. Fraudulent — California considers conduct fraudulent and prohibits said conduct if it is likely to deceive members of the public. Bank of Wes v. Superior Court, 2 Cal. 4th 1254, 553 (1992).
3. Unlawful — Identifies violations of other laws as “unlawful practices that the unfair competition law makes independently actionable.” Velazquez v. GMAC Mortg. Corp., 605 F. Supp. 2d 1049, 1068 (C.D. Cal. 2008).
Examples of Deceptive Business Practices:
- Violations of do-not-call requests
- Violations of unsubscribe requests
- Predatory lending (illegally high interest rates)
- Bait and switch tactics to deceive customers
- Conspiracy to fix market prices with competitors
- Price discrimination (rebates offered to some customers but not others)
SLACK-FILL CONTAINERS
The Consumer Legal Remedies Act (“CLRA”), in conjunction with California Civil Code § 1750, et. seq., prohibits certain “unfair methods of competition and unfair or deceptive acts or practices” in connection with a sale of goods.
More specifically, 21 C.F.R. Section 100.100 and California Business and Professions Code § 12606.2 states: “A container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains nonfunctional slack-fill.”
Common Forms of Non-Functional Slack-Fill:
- Opaque candy and/or snack boxes
- Opaque vitamin containers
- Opaque cosmetic products
- Protein powders and/or workout supplements
- Opaque CBD and/or cannabis product containers
JUNK FEES
On Oct. 7, 2023, California Governor Gavin Newsom signed SB 478 into law. When it becomes effective July 1, 2024, the law will amend the CLRA to generally ban so-called “junk fees.” This initiative is meant to save California households billions of dollars a year by reducing exploitative junk fees charged by banks and financial companies, which seem to be making these junk fees, like overdraft fees, part of their core business model.
Junk fees | Consumer Financial Protection Bureau (consumerfinance.gov)
Common Examples of Junk Fees Include:
- Surprise depositor fees (fee for depositing a check that bounces)
- Surprise overdraft fees
- Excessive credit card late fees
- Drip pricing (advertising a price that does not include all taxes and fees)
- Any other types of “hidden” fees, not shown in pricing