What is an example of a deceptive practice under the FTC Act?

What is an example of a deceptive practice under the FTC Act?

• A. Providing additional services at no charge
• B. A service claiming false benefits to customers
• C. Offering discounts for referrals
• D. Explaining complex fees clearly

Answer: (B)

A service claiming false benefits to customers is a clear example of a deceptive practice under the FTC Act because it misleads consumers. The FTC (Federal Trade Commission) aims to protect consumers from false or misleading advertisements and claims. When a service promotes benefits that are untrue or exaggerated, it not only provides a false sense of value to consumers but also undermines the trust within the market. Such practices can lead to consumers making uninformed decisions based on incorrect information, which is precisely what the FTC seeks to prevent in order to promote fair competition and protect consumers’ interests. In contrast, providing additional services at no charge or offering discounts for referrals can be legitimate business practices that enhance customer engagement. Likewise, explaining complex fees clearly is an example of transparency and honesty in business dealings, which aligns with the FTC's goals of ensuring consumers are well-informed.

A service claiming false benefits to customers is a clear example of a deceptive practice under the FTC Act because it misleads consumers. The FTC (Federal Trade Commission) aims to protect consumers from false or misleading advertisements and claims. When a service promotes benefits that are untrue or exaggerated, it not only provides a false sense of value to consumers but also undermines the trust within the market. Such practices can lead to consumers making uninformed decisions based on incorrect information, which is precisely what the FTC seeks to prevent in order to promote fair competition and protect consumers’ interests.

In contrast, providing additional services at no charge or offering discounts for referrals can be legitimate business practices that enhance customer engagement. Likewise, explaining complex fees clearly is an example of transparency and honesty in business dealings, which aligns with the FTC's goals of ensuring consumers are well-informed.