Consumers are involved in a legal transaction every time they make a purchase, even if it is as simple as clicking a button on a computer. In California, as in other states, consumer protection laws and regulations are designed to safeguard individuals from deceptive trade practices such as bait-and-switch, pyramid schemes, and telemarketing fraud.
Consumer protection laws also protect people from identity theft, phishing, and other crimes that target consumers. Here are some of the key consumer protection laws in California:
- Bait-and-Switch: This is a deceptive trade practice in which a seller lures a customer in with an attractive offer, only to switch to a different product or service that is more expensive or of lower quality.
- Pyramid Schemes: These are fraudulent investment schemes promising high returns with little or no risk. In reality, pyramid schemes rely on the constant recruitment of new investors to generate profits, and most people who participate in them lose money.
- Telemarketing Fraud: This is a type of fraud in which a caller uses a phone to trick someone into giving them money or personal information. Telemarketing fraud can involve anything from selling fake goods or services to obtaining credit card numbers.
- Identity Theft: This is a crime in which someone steals someone else’s personal information and uses it to commit fraud. Identity theft can have a devastating financial and emotional impact on victims.
If you believe that you have been the victim of a deceptive trade practice or other consumer fraud, you should contact the California Department of Consumer Affairs. The department can help you file a complaint and investigate the matter.
Common Consumer Protection Laws in California
- California Consumer Privacy Act (CCPA) — The CCPA is a state law giving California residents more control over their personal data. The CCPA requires businesses to tell consumers what personal data they collect and how they use it, allow consumers to opt out of the sale of their personal data, give consumers access to their personal data and the right to delete it, and not discriminate against consumers who exercise their privacy rights. The CCPA applies to businesses meeting certain criteria, including having annual gross revenues that exceed $25 million, buying, receiving, or selling the personal information of 100,000 or more consumers or households, and earning more than half of their annual revenue from selling consumers’ personal information. Businesses that violate the CCPA could be subject to fines of up to $7,500 per intentional violation and $2,500 per unintentional violation. Under the CCPA, consumers have the right to know what personal data is being collected about them, how it is being used, and who it is being shared with, the right to opt out of the sale of their personal data, the right to access their personal data and to request that a business delete it, and businesses cannot discriminate against consumers who exercise their privacy rights.
- Unfair Competition Law (UCL) of California — The UCL prohibits false advertising and illegal business practices. The law defines unfair competition as being any unlawful, unfair, or fraudulent business act or practice, or any false, deceptive, or misleading advertising. To pursue a lawsuit under the UCL, a consumer or business must prove that they suffered financial or property losses because of an unfair practice. The lawsuit must be filed within four years of discovering the illegal practice. The purpose of the lawsuit is to stop the unfair practice and to seek restitution. The plaintiff may also ask for attorney fees. Unfair business practices that could be prohibited by the UCL include bait-and-switch, price gouging, intellectual property infringement, and deceptive advertising.
- False Advertising Act — Business and Professions Code § 17500 prohibits any kind of false or deceptive advertising about the nature of a product or service. It applies to false or misleading statements in print, digital, or any other advertising media. A conviction under this section is a misdemeanor punishable by up to six months in jail and a fine of up to $2,500. To prove that a person or company is guilty of violating this section, the prosecutor must show that a person or company made some kind of false or misleading statement in connection with their service, product, or the sale of a service, product, or property, and the person or company knew, or should have known, that their statement was false or misleading. A statement is considered false or misleading if it is likely to deceive members of the public. The determination of whether or not a member of the public has been deceived will be based on the facts of a given case. The second element, known as knowledge, means that the falsity of the advertisement must have been known, or should have been known, by a defendant. When an ad simply contains an error, that mistake would not likely be considered to be a violation of the law. Examples of false or misleading advertising that could violate BPC 17500 include claiming that a product is new when it is not, claiming that a product has been clinically proven to be effective when it has not, making a comparison to a competitor’s product that is not accurate, using testimonials from people who have not actually used the product, and failing to disclose important information about a product, such as its side effects.
- California Consumers Legal Remedies Act (CLRA) — Under California Civil Code § 1750, the CLRA is a consumer protection law that prohibits unfair or misleading acts when selling goods or services to consumers. The CLRA is most often applicable in cases that involve false advertising claims and/or consumer fraud. The CLRA prohibits certain deceptive business practices, including selling counterfeit goods, or the sale of goods that are falsely represented as being genuine, misrepresenting the source of a good or service, or the practice of claiming that a good or service comes from a source when it does not, lying about a professional affiliation, certification, or endorsement, or the practice of falsely claiming that a business or individual has a particular affiliation, certification, or endorsement, lying about a geographic origin for a product, or the practice of falsely claiming that a product is made in a particular place when it is not, selling a used or reconditioned item as new, or the practice of selling a used or reconditioned item without disclosing that it is not new, misrepresenting the quality of a good or service, or the practice of falsely claiming that a good or service is of a higher quality than it actually is, making false statements disparaging another business’ products, advertising items as being available when they are not, advertising furniture as available without disclosing that it will be unassembled, telling a customer that a repair or replacement will be necessary when it is not, offering rebates or discounts with hidden conditions, falsely presenting a salesperson’s authority to negotiate and finalize a transaction, and “robo-calling” people who are not already customers. One advantage of the CLRA is that victims of business fraud in California will not be limited to filing lawsuits under the statute. A consumer could technically bring multiple claims citing both the CLRA as well as other state or federal laws.
Speak with an Experienced Mountain View Small Business Attorney
Kalia Law P.C. is a consumer protection law firm that advocates on behalf of consumers who have been wronged by such parties as creditors, advertisers, banks and lenders, collection agencies, car dealers, credit card issuers, and landlords. Our California consumer protection attorneys exclusively handle consumer protection cases and class action lawsuits, and we have a strong and proven track record of success as it relates to helping consumers recover their rights and obtain justice.
The vast majority of our clients come to us with questions about consumer rights or unfair debt collection practices, and we are happy to answer your questions and provide you with free legal advice. Call (650) 701-7617 or contact us online to set up an initial appointment.