Term Paper on Bait and Switch Introduction In a capitalist economy the law of demand and supply or the "invisible hand" tends to govern the market. The focal point in this market is the consumer. To gain profitability, companies tend to force the consumers to buy products and services that they do not require through attractive advertisements and campaigns. Sometimes advertisers do not differentiate between right and wrong, thereby crossing legal boundaries. Fortunately there are laws that protect the consumers from such persuasive and at times fraudulent marketing tactics. One such law is the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). The FDUTPA provides for the recovery of actual damages to those who suffers losses as a result of violation of this act. Cases of unfair competition, fraud, antitrust and deception all come under the jurisdiction of FDUTPA. (Federbush 2004). According to Federbush (2004) the Act provides for antitrust precedents that outlines damages measured in terms of unlawful overcharge extracted from the consumer. In the case of deception however the Act provides that claims be limited for compensation of specific categories. FDUTPA is the basis for consumers’ protection in the State court of Florida. In the following discussion the researcher attempt to trace out how the FDUTPA helps consumers to achieve awareness and prevent them from becoming victims of bait and switch tactics. Discussion The need for inclusion of FDUTPA in business law has been to ensure honest transactions and commercial activities. As competition becomes fierce, companies tend to engage in unfair practices that not only harm the consumer but also other players in the industry. The provisions given by FDUTPA clearly outline the participation of the consumers and the business leaders in fair trade and business endeavors. One of the reasons for the inclusion of the FDUTPA and its strict follow up is due to the fact that companies, despite the legal framework continue to practice consumer fraud. Forgery, deceit, fraud in retail sales and advertisements, etc. all contribute to the consumer damages in monetary term as well as otherwise. One of the most common practices is "bait and switch" tactic adopted by advertisers and campaigners. Bait and switch tactics involve the advertisement of a product on television or such other mass media at an extraordinary low price. Upon visiting the premises of the retailer, the consumer finds that the seller has limited or no stock of the product advertised. Instead the seller diverts the attention of the consumer and tries to sell other high priced products. The trick is to draw the consumer to the shop using the low price advertisements as "bait" and "switch" over to other high priced products. This practice has been common among car dealers, electronics retailers and furniture sellers etc. In some states it is considered unlawful to "bait and switch" and comes under the statutes such as FDUTPA, while other states merely categorize it under fraud. A typical bait and switch case could be illustrated through Florida's Attorney General Bob Butterworth's charge of a gas masks selling company that engaged bait and switch (Butterworth 2002). A gas mask company established after the event of September 11, marketed gas masks for $49. However, when consumers went to purchase the company did not have stock for the masks. Instead they were convinced to buy pricier merchandise. Not only this, the company also claimed it sold new products whereas the products were used or expired. The CEO Joseph had been served with subpoena. The case illustrates that companies often engage in unfair trade transactions to capitalize on consumer emotions as well as vulnerability. The law on the other hand ensures that citizens be safe and protected from such malpractices. Furthermore, consumers who are the ones that drive the market should be provided with the maximum benefits from the products they pay for. They should not be made to pay for the damages that companies incur and transfer to the consumers to ease costs. Another case of bait and switch is of Eyeglass World. The company offers one-stop shopping for eye exams and corrective lenses to consumers. The company operates a chain of retailing outlets where the customers can have their eyes examined by independent eye specialist. However, pressured by the company the eye specialist started to prescribe unnecessary prescriptions that encouraged consumers to purchase outdated or used lenses and purchase of solution starter kits etc. The company willfully misquoted low prices of products over the telephone and failed to refund the customers when these gimmicks were discovered (Butterworth 2000). Not only the company has been responsible for the damages incurred to the consumers but they have also been responsible for the deteriorating ethical trade practice. Hence, bait and switch and such other malpractices prevalent in the industries have been the result of failure to implement corporate ethics and conduct policies. Retailing trade especially engage in stock outages and underselling so that the competitors cannot compete. In the process they are likely to market products and services using bait and switch tactics to drive customers to the point of sale. Fraud associated with bait and switch can be curtailed by law provided that claimants can provide evidence (Gerstner 1998). Competition is not the only problem for generating fraudulent practices. In Roylee Miller vs. Hospice of the Florida (2003) for example the plaintiffs have been donors/contributors to Hospice a non-for profit organization involved in "good and laudatory work". However, the organization has been channeling funds to a for-profit software company Suncoast Solutions without the knowledge of the contributors. The bait Hospice marketed as a non-for profit organization have been dealing with HIV patients. But the funds received on behalf of these patients were being switched to the software company which has been running at a loss with not future of profitability. The basic premise is that organizations need not be competitive to engage in bait and switch tactics which deceive "customers" or donors (in this case) using their sympathetic nature. The question that comes to mind is how consumers can protect themselves. According to Trudy Lieberman consumer reporting has diminished over the years so that consumers are left with the law only to protect them from fraudulent companies. Not only need they be aware of the law but they should also be aware of the marketing tactics that companies engage in to lure customers to their outlets. In the process, companies may go to the extent of compromising the health and safety of the customers along. In Clayton Eugene Schauer vs. General Motors Acceptance Corp (GMAC) and Morse Operations (2002) the plaintiff is a co-signer for a vehicle loan for his stepdaughter from GMAC through Morse Operations. Schauer claims that the corporation and dealer have violated the FDUPTA based on fraud and deceit on agency principles and forgery. The plaintiff appealed the Court "the corporation willfully harassed him and his family; but the individual could not use the Federal Trade Commission Holder Rule as a sword in the fraud and deceit claim." The plaintiff filed that GMAC harassed him and his family in an attempt to collect debt. However, Schuer's allegation had not been effective on several counts. Firstly, his claim categorized GMAC as the debt collector whereas GMAC extended credit facility to Schuaer's family. In Florida the definition of debt collector and creditor differ from other states and cannot be the same person. On top of that the plaintiff amended his complain three times with regard to GMAC as well as Morse Operations with prejudice. Nevertheless the Court dismissed the latter claims. Furthermore, the plaintiff claims that he has been fraudulently treated and that GMAC has been engaged in unscrupulous practices under the Federal Trade Commission Holder Rule. Since Schauer did not bring into account of the actual damages, the claim too have been dismissed based on Section 559.77 Florida Statutes (1999) which "provides that a debtor may bring a civil action against a person violating the Act for actual damages, costs and reasonable attorney's fees, punitive damages, and other equitable relief." From this case one observes that claimers must be aware that the Florida Statutes provides for actual damages before the court can offer equitable relief. Claimant should not have multiple claims lodged for one case unless the case is dismissed. This not only compromises the claimant's position but it also negates the effectiveness of the Act.
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