Examples of unfair business practices include bait-and-switch advertising, hidden “junk” fees added at checkout, fake online reviews, subscription traps that make canceling nearly impossible, billing for services never delivered, price gouging during emergencies, and contract terms so lopsided a court would refuse to enforce them. Federal law treats a practice as unfair when it causes substantial consumer injury that shoppers can’t reasonably avoid and that isn’t outweighed by any benefit to consumers or competition.1Office of the Law Revision Counsel. 15 US Code 45 – Unfair Methods of Competition Unlawful; Prevention by Commission Deceptive practices sit alongside unfair ones under the same enforcement umbrella, and both give you real options when you’ve been burned.
Unfair Versus Deceptive: Two Legal Tests
The Federal Trade Commission Act prohibits both categories, but they aren’t the same thing.1Office of the Law Revision Counsel. 15 US Code 45 – Unfair Methods of Competition Unlawful; Prevention by Commission
A practice is deceptive when a representation or omission is likely to mislead a reasonable consumer about something that would affect their decision to buy.2Federal Trade Commission. FTC Policy Statement on Deception A practice is unfair when it causes substantial consumer injury that shoppers can’t reasonably avoid and that isn’t outweighed by benefits.3Federal Trade Commission. FTC Policy Statement on Unfairness A misleading ad may be deceptive. A billing setup designed so canceling is practically impossible may be unfair even if every written disclosure was technically accurate.
Every state also has its own consumer protection law, often called a UDAP statute. These generally track the federal framework, and many go further by letting individual consumers sue and, in some states, recover double or triple their actual losses.
Deceptive Advertising
Bait-and-Switch
A bait-and-switch happens when a business advertises an attractive deal it doesn’t intend to honor. The advertised item lures you in. Once you’re there, the seller steers you toward something else, usually pricier.4eCFR. 16 CFR Part 238 – Guides Against Bait Advertising The FTC has formally determined that this violates the FTC Act, and companies that continue after receiving notice face civil penalties per violation.5Federal Trade Commission. Penalty Offenses Concerning Bait and Switch
Fake Reviews and Undisclosed Endorsements
The FTC finalized a rule banning fake reviews and testimonials, including AI-generated ones. Businesses can’t create, buy, or spread reviews written by people who don’t exist or never used the product, and reviews from company insiders count as fake unless the connection is disclosed.6Federal Trade Commission. Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials
The FTC’s endorsement guides also require anyone with a material connection to a seller (payment, free products, a business relationship) to disclose it clearly and conspicuously. Fine-print or “more” link disclosures don’t cut it.7eCFR. 16 CFR Part 255 – Guides Concerning Use of Endorsements and Testimonials in Advertising A paid influencer post with no disclosure is a classic violation.
Fictitious “Sale” Prices
Advertising a “sale” against a former price that was never real is deceptive. Under federal guidance, a former price is legitimate only if the item was genuinely offered at that price for a substantial period in the regular course of business. Inflating a price tag just to advertise a dramatic discount is fictitious pricing.8eCFR. 16 CFR 233.1 – Former Price Comparisons
Hidden Fees and Deceptive Pricing
Drip Pricing and Junk Fees
Drip pricing shows a low headline price, then adds mandatory charges (resort fees, service fees, processing fees) as you move through checkout, so the final total is well above what drew you in. The FTC’s Rule on Unfair or Deceptive Fees, effective May 2025, targets this for short-term lodging like hotels, motels, and vacation rentals. Covered businesses must display the total price, including all mandatory charges, more prominently than any other pricing information, and vague labels like “convenience fee” aren’t allowed. The fee has to describe what it actually covers.9Federal Trade Commission. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions
Taxes, shipping, and genuinely optional add-ons can be excluded from the upfront total, but they must be disclosed before the business asks for payment, and the final payment amount must appear at least as prominently as the total price.9Federal Trade Commission. The Rule on Unfair or Deceptive Fees: Frequently Asked Questions The rule as written covers short-term lodging; other industries still fall under the general deception standard.
Charging for Services Never Delivered
Billing for work never performed is straightforwardly deceptive. It turns up in auto repair invoices padded with phantom labor, subscription services that keep charging after you cancel, and utility or telecom bills with mystery line items. You paid for something you didn’t get.
Price Gouging in Emergencies
Roughly 39 states prohibit excessive price increases on essential goods during declared emergencies.10National Conference of State Legislatures. Price Gouging State Statutes Thresholds vary a lot. Some states cap increases at 10% above pre-emergency prices, others use 15% or 25%, and a few rely on a broader “unconscionable” standard evaluated case by case. Most of these laws activate when the governor or president declares an emergency, are enforced by the state attorney general, and in some states carry criminal penalties.
Pressure Sales and Unsolicited Goods
Manufactured urgency, refusal to accept “no,” and targeting people who have trouble saying no are the hallmarks of coercive selling. Federal law provides a specific escape hatch for one of the highest-pressure settings. The FTC’s Cooling-Off Rule gives you three business days to cancel any door-to-door purchase over $25, or any sale at a temporary location over $130, for any reason and with no penalty. The seller must hand you a cancellation notice at the time of sale; failing to do so is itself a violation.11eCFR. 16 CFR Part 429 – Rule Concerning Cooling-off Period for Sales Made at Home or Other Locations
If you receive merchandise you never ordered, federal law lets you treat it as a free gift. Keep it, discard it, do whatever you want. The sender can’t legally bill you or send collection notices. The narrow exceptions are free samples clearly marked as such and merchandise mailed by charities soliciting donations.12Office of the Law Revision Counsel. 39 US Code 3009 – Mailing of Unordered Merchandise
Dark Patterns Online
Interface design has become one of the most common vehicles for unfair practices. The FTC uses the term “dark patterns” for website and app tricks that push consumers into purchases, subscriptions, or data sharing they didn’t intend.13Federal Trade Commission. FTC Report Shows Rise in Sophisticated Dark Patterns Designed to Trick and Trap Consumers Common ones:
- Disguised ads: Sponsored content built to look like independent reviews or neutral comparison tools, with rankings actually driven by who paid the most.
- Fake countdown timers: A ticking clock suggesting a deal is about to end when there’s no real deadline.
- Obstacle-course cancellation: One-click signup, then a maze of pages, chat windows, and “are you sure?” prompts to cancel.
- Buried fees and terms: Mandatory charges hidden behind tooltip icons; critical limitations parked deep in terms-of-service pages.
- Privacy-grabbing defaults: Options pre-set to share maximum personal data, with the opt-out path obscured.
Subscription Traps
Subscriptions that are easy to start and nearly impossible to cancel draw some of the loudest consumer complaints. The Restore Online Shoppers’ Confidence Act requires businesses selling through negative-option features, where silence or inaction counts as acceptance, to clearly disclose all material terms before collecting billing information, obtain express informed consent before charging, and provide a simple way to stop recurring charges.14Office of the Law Revision Counsel. 15 US Code 8403 – Negative Option Marketing on the Internet A company that buries the cancel button, or requires a phone call during narrow business hours when the signup took seconds online, is likely violating this standard.
Unconscionable Contract Terms
Some contract provisions are so one-sided that courts refuse to enforce them under the doctrine of unconscionability. The bar is high: terms “unreasonably and unexpectedly harsh” or “so one-sided as to shock the conscience.”15Legal Information Institute. Shocks the Conscience Courts look at both how the contract was formed (bargaining power, hidden fine print, absence of realistic alternatives) and the substance of the terms themselves.
Recurring examples include mandatory arbitration clauses paired with class-action waivers that make small-dollar abuses uneconomical to challenge, automatic-renewal terms tucked where consumers won’t see them, and penalty clauses far larger than any actual harm to the seller.
What You Can Do About It
The reporting path depends on the product or service.
For general consumer fraud and deception, file with the FTC at ReportFraud.ftc.gov. Individual complaints may not get a personal response, but the FTC uses complaint data to spot patterns and build enforcement cases against repeat offenders.16Consumer Advice (Federal Trade Commission). How to File a Complaint with the Federal Trade Commission When the FTC finds violations, it can issue cease-and-desist orders and seek civil penalties. Companies that received a formal notice of penalty offenses and kept going face penalties up to $50,120 per violation, which adds up fast across thousands of customers.17Federal Trade Commission. Notices of Penalty Offenses
For banks, lenders, credit cards, debt collectors, and other financial services, use the Consumer Financial Protection Bureau. You can file online at consumerfinance.gov/complaint in about 10 minutes, or call (855) 411-2372. The CFPB forwards your complaint to the company, which generally has 15 days to respond (up to 60 if it needs more time). You then have 60 days to review the response and add feedback.18Consumer Financial Protection Bureau. Learn How the Complaint Process Works Unlike FTC complaints, CFPB complaints reliably produce a direct company response.
Also contact your state attorney general’s consumer protection division, especially for state-specific violations like price gouging. Many state UDAP claims carry stronger remedies than federal enforcement, including recovery of attorney’s fees if you win in court, and some states authorize treble damages for knowing violations. That’s often what makes a small-dollar consumer claim worth pursuing at all.