When consumers look for the best deal, they often rely on price comparisons. If a retailer claims their television is $100 cheaper than a competitor’s, or an auto shop advertises that their oil change is half the price of the “going rate,” those comparisons strongly influence buying decisions. The Utah Truth in Advertising Act protects consumers from being manipulated by skewed, hidden, or fabricated pricing data.
What is the Utah Truth in Advertising Act?
The Utah Truth in Advertising Act, found in Utah Code Title 13, Chapter 11a, is designed to prevent deceptive, misleading, and false advertising practices within the state. Its primary goal is ensuring businesses compete fairly and consumers receive accurate information about their purchases.
Deceptive practices include passing off goods, confusing their source, or manipulating prices to make offers appear superior.
The Rule on Using Someone Else’s Price
Specifically, Utah Code § 13-11a-3(1)(n) addresses how businesses can advertise using a price that is not their own—such as a competitor’s price, an MSRP (Manufacturer’s Suggested Retail Price), or an estimated market rate. The law states that a deceptive trade practice occurs when a person or business:
“advertises or uses in a price assessment or comparison a price that is not that person’s own unless this fact is: (i) clearly and conspicuously disclosed; and (ii) the representation of the price is accurate;”
In simple terms, a business cannot legally use a price from another company in their advertising without making it incredibly clear to the consumer that the quoted price belongs to someone else. Furthermore, the price they are quoting must be completely accurate and truthful.
Why Transparent Pricing Matters
Truthful and clearly labeled price comparisons are the foundation of a fair and transparent market. When a business deceptively uses someone else’s price, it harms the consumer and disrupts fair competition.
- Accurate Market Valuation: Consumers use comparison pricing to determine what a fair market rate actually is. If a business subtly presents a competitor’s inflated price as if it were the standard market price—without disclosing where that number came from—it warps the consumer’s understanding of true value.
- Informed Decisions: Shoppers need to know exactly what they are comparing. If a store says “Compare at $50,” the consumer needs to know if that $50 is a rival’s current price, an arbitrary manufacturer suggestion, or completely made up.
- Fair Competition: When a company falsely inflates another business’s prices in an advertisement, or vaguely implies that competitors charge more without accurate backing, it steals business from honest competitors who are offering genuinely competitive rates.
Examples of Deceptive Use of Another’s Price
A violation of these rules can take several forms:
- Vague “Compare At” Tags: A clothing retailer tags a jacket with “Our Price: $40 / Compare at $80.” If the $80 is not the retailer’s own former price, but rather a competitor’s price or a theoretical MSRP, the retailer must clearly disclose that fact.
- Fabricated Competitor Rates: A local plumber puts a chart on their website comparing their hourly rate to an unnamed “Leading Local Competitor,” but they artificially inflate the competitor’s rate on the chart to make their own pricing look like an incredible bargain. Not only must the fact that it is someone else’s price be disclosed, but the represented price must be completely accurate.
- Hidden Origins: An electronics store runs a radio ad claiming, “The standard price for this TV is $1,000, but we sell it for $700!” If that $1,000 is based on a specific high-end competitor’s price rather than a genuine industry standard, failing to disclose where that $1,000 figure comes from violates the act.
Enforcement and Consequences
The Utah Truth in Advertising Act provides mechanisms to address violations. If a court finds that a person or business is violating any provisions of this Chapter, the consequences can include:
- Injunctions: A court can order the business to stop the deceptive advertising practice immediately.
- Financial Damages: The court may award actual damages sustained from the deception or $2,000, whichever is greater.
The focus of the law is on transparency and accuracy. If a business wants to use another company’s price to highlight how good their own deal is, they cannot hide where that number came from, and they cannot lie about the amount.
Need Legal Assistance in Utah?
If you have questions about consumer protection laws or believe you have been affected by deceptive trade practices, Head Law can help. Managing attorney David S. Head and his team assist clients in protecting their rights under Utah consumer laws. Contact Head Law at (801) 691-7511 to schedule a consultation.