Operating a GA business? Understand the Fair Business Practices Act

Posted by Lauren S. Frisch on

Most people are familiar with the Federal Trade Commission Act; however, few people are aware of the additional protections for consumers and legitimate business provided at the state level. Generally, both state and federal consumer protection laws are referred to as Unfair and Deceptive Acts and Practices (“UDAP”) statutes.

Georgia’s primary UDAP statute is the Fair Business Practices Act (“FBPA”).  The FBPA provides both a private right of action, through which individual consumers can pursue damages, and an administrative procedure through which the Attorney General’s Consumer Protection Unit (the “CPU”) can investigate and determine whether a company has engaged in, is engaging in, or is about to engage in any unlawful practice. 

Under the FBPA, all unfair or deceptive practices in the conduct of consumer transactions, acts, or practices are illegal.  Beyond that, the FBPA provides a non-exhaustive list of acts and practices deemed to be unlawful.  These acts include but are not limited to:

  • Passing off goods or services as those of another;
  • Causing actual confusion or actual misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
  • Representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand;
  • Representing that goods or services are of a particular standard, quality, or grade or that goods are of a particular style or model, if they are of another; and
  • Making false or misleading statements concerning the reasons for, existence of, or amounts of price reductions.

The Fair Business Practices Act and policy guidelines issued by the CPU also contain certain industry- and/or activity-specific rules applicable to gyms and health studios, promotional contests, telemarketing and telephone solicitations, automotive advertisements, and sellers of Kosher food, among others.

Consumers who are successful in bringing a claim for violation of the FBPA may be awarded injunctive relief, general damages sustained as a result of the business’ unfair or deceptive practices, as well as reasonable attorneys’ fees and litigation expenses.  Exemplary damages may also be awarded if the violation for intentional violations. 

If the CPU determines that a business is in violation of the FBPA, following notice and opportunity for an administrative hearing, the Attorney General may issue an order prohibiting any further violation of the FBPA, imposing a civil penalty of up to $2,000.00 per violation, and/or requiring the business to pay restitution to affected consumers. Although these amounts may appear relatively modest, violations tend to add up quickly.  For example, if a business’ website contains three claims deemed by the Attorney General to be a violation and each claim is posted for 30 days, the resultant order may identify 90 separate violations (or up to $180,000.00 in penalties).

Whether you have just started a business or have operated for years, it is worth your time to review the CPU’s website to ensure that you are not in violation of Georgia’s UDAP laws and polices. If you would like guidance on compliance with the Fair Business Practices Act or other state and Federal UDAP laws, or if you have any other questions, please contact me at lfrisch@bfvlaw.com.