Consumers Legal Remedy Act (CLRA): Advertising & Other Competitive Practices

Since the arrival of the Internet, followed by social media communications, marketing practices have changed dramatically. The Internet allows companies to describe their products with a huge megaphone. Social media provides targeted approaches. The Consumers Legal Remedy Act (CLRA) has remained relatively unchanged in its basic prohibitions and definitions of illegal practices. Interpreting the CLRA, however, has become increasingly complex.

CLRA Competition Rules: Stay in the Right Lane

The CLRA prohibits certain kinds of competitive practices. It tells sellers what they can’t do to persuade a potential buyer to purchase or lease a product or service “for personal, family, or household purposes.”

CLRA specifically prohibits these advertising practices:

• CLRA prohibits saying negative (and untrue) things about a competitor’s product or service. It’s okay to say your product is “better” or the “best,” but you can’t make false statements about your competitors.

• Advertising with an intention not to sell as advertised – E.g., Ad says “12-cup coffee maker,” but the product only makes 10 cups.

• Promoting a product without enough supply to meet expected demand. This ad increases traffic but wastes people’s time and can result in consumer complaints.

• When advertising furniture, omitting “assembly required” (or price for the same item assembled). You can understand a buyer’s dismay at discovering they’ve purchased only parts and instructions for assembly.

• When promoting a sale, misleading buyers about the reasons for price reductions and discount amounts. Some stores have been “going out of business” for years, fooling buyers into thinking they’re getting great deals.

• Claiming that a purchase comes with rights, remedies, or obligations that it does not have or that are prohibited by law. E.g., A vocational college cannot make false claims about job placements or guarantee that credits will transfer to other universities.

In a highly competitive market, it’s not always easy for sellers to do the right thing. And even though the customer service maxim is “the customer is always right,” sellers need to know how to handle false CLRA complaints.

Consult an Experienced Business Lawyer

If you have questions about your marketing plans or need help handling a customer complaint, it’s time to speak with a California lawyer who has an in-depth understanding of the CLRA and the many other laws affecting the way you conduct your business. For an appointment with Mohsen Parsa, a nationally recognized and highly-esteemed attorney, call 949-394-6930. Or contact the Mohsen Parsa law office today.