Consumers Righting Corporate Wrongs
Federal and state governments have enacted numerous laws to protect consumers from fraudulent and deceptive business practices. In New York, two laws in particular that address deceptive acts by business are General Business Law Sections 349 and 350. Any consumer who has been injured by a deceptive act or practice may bring a lawsuit under Section 349. New York law under Section 350 prohibits false advertising, which includes failure to disclose important information and misleading labeling or packaging. Section 350 requires in addition to some harm stemming from a deceptive business practice that a consumer relied on a false misrepresentation.
In addition, where a business has broken an agreement, changed the terms of an agreement, or failed to disclose important terms of an agreement, a consumer who has suffered damages may be able to pursue a breach of contract or similar action even if there is no written contract.
Often in cases involving consumer claims about unfair business practices, consumers choose to pursue a class action. About 50 years ago, Congress recognized that there are many instances where one company’s illegal practices violate the rights of hundreds, thousands, or millions of individuals in exactly the same way. Often, however, the violations are minor enough on an individual basis that these people will not file their own lawsuits. To improve efficiency in the court system and allow these individuals to vindicate their rights, Congress enacted Rule 23 of the Federal Rules of Civil Procedure, paving the way for large-scale cases known as “class actions.” By joining together in a class action, the potential money at stake grows exponentially, forcing the company to pay attention. Class actions are used to right many wrongs, including but not limited to: (1) unlawful company-wide pay practices or discrimination; (2) unfair or deceptive business practices; and (3) securities fraud that occurs when publicly held companies make false or deceptive statements concerning their stock value and viability that eventually cause the value of stockholders’ shares to decrease significantly.
There is a wide variety of business practices that may constitute false, fraudulent or deceptive practices, including:
- Hidden, unfair, inflated charges for goods and services;
- Excessive or misrepresented fees;
- Bait and switch tactics by business, advertising one good or service only to provide customers with an inferior product;
- Scams, aggressive debt collection, abusive credit card, tax or mortgage settlement services;
- Deceptive refunds or rebates;
- Improper or unauthorized use of sensitive personal, medical or financial information;
- Deceptive or unfair credit card or banking practices.
Only an attorney can bring a class action lawsuit, and the law limits the amount of time consumers have to seek legal recourse for injuries. The attorneys at Pelton Graham LLC have extensive experience bringing, managing and resolving large, complex class actions that result in real recovery for injured plaintiffs.