Are State Consumer Protection Acts Really Little-FTC Acts?
31 Pages Posted: 6 May 2010 Last revised: 9 Jan 2011
Date Written: May 5, 2010
State Consumer Protection Acts (CPAs) were designed to supplement the Federal Trade Commission’s mission of protecting consumers and are often referred to as “little-FTC Acts.” There is growing concern that enforcement under these acts is not only qualitatively different than FTC enforcement, but may be counterproductive for consumers. This article examines a sample of CPA claims and compares them to the FTC standard. It identifies qualitative differences between CPA and FTC claims by commissioning a “Shadow Federal Trade Commission” of experts in consumer protection. The study finds that many CPA claims include conduct that would not be illegal under the FTC standards and that most of the cases with illegal conduct would not warrant FTC enforcement. Even among CPA cases where the plaintiff prevailed, nearly half do not include illegal conduct under the FTC standard and most of the cases with illegal conduct would not invoke FTC enforcement. The results clearly suggest private litigation under little-FTC Acts tends to pursue a different consumer protection mission than the Bureau of Consumer Protection at the Federal Trade Commission.
Keywords: administrative expertise, business regulation, causes of action, common law limitations, deceptive practices, fraud, market forces, National Conference of Commissioners on Uniform State Laws, Posner, printer’s ink laws, Ralph Nader, remedies, statute of frauds, UDTPA, unfair, warranty disclaimers
JEL Classification: D18, K20, K29
Suggested Citation: Suggested Citation