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Have changes in unfair trade practices law harmed businesses, consumers?

For both businesses and consumers, there is a delicate balance of power that needs to be maintained in order to ensure that businesses have the freedom to benefit from their enterprise and that consumers are not unfairly disadvantaged when entering into transactions with businesses.

Here in Louisiana, one of the laws that addresses these issues is the Louisiana Unfair Trade Practices Act (LUTPA). The law prohibits untrue or misleading advertising and permits imposition of monetary penalties, injunctive relief and attorneys fees on businesses found to be in violation. 

Since LUTPA was established, various changes have been made to the law. These include, say some legal commentators, amendments favoring plaintiffs and their lawyers and overly permissive interpretations of the law by the courts.  Unfair trade practices and consumer protection law claims under the law have apparently increased dramatically as these changes have been made.

According to some, these expansions in the law have made it less effective in protecting consumers from unfair and deceptive practices. Both businesses and consumers, it is argued, suffer as a result: businesses, because expansions in the law increase costs; and consumers, because these costs are passed to them and prevent businesses from taking steps that could help prevent claims of misleading advertising. Some attorneys take exception to this line of argument, and say that the law has built-in checks and balances that ensure the law is not applied too expansively.

In our next post, we’ll look at some suggested reforms of the law and why it is important for businesses to ensure compliance with the law and to work with an experience attorney when faced with LUTPA litigation.

Sources:

Louisiana Record, “Report alleges Louisiana's consumer protection law misuse has increased litigation,” Emma Gallimore, Feb. 23, 2016.

Findlaw, “Louisiana Deceptive Trade Practices Laws,” Accessed Feb. 25, 2015. 

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