When consumers see a bold claim that a store has “the lowest prices in town,” or an advertisement declaring that a specific competitor charges 20% more, they often want to know where that data came from. Price comparisons can be highly persuasive, but they are only as trustworthy as the person or firm that conducted the research. The Utah Truth in Advertising Act protects consumers from being manipulated by biased or secret data collection.
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 to ensure that businesses compete fairly and that consumers receive accurate information about the goods and services they purchase.
Under this law, a practice is considered deceptive if a business passes off goods as something they are not, creates confusion about a product’s source, or uses manipulated or improperly disclosed pricing data to make their own offers appear superior.
The Rule on Hidden Price Assessors
Specifically, Utah Code § 13-11a-3(1)(q) addresses the transparency required when a business uses an outside party or their own staff to check a competitor’s prices. The law states that a deceptive trade practice occurs when a person or business:
“advertises a price comparison or the result of a price assessment or comparison that uses, in any way, an identified competitor’s price without clearly and conspicuously disclosing the identity of the price assessor and any relationship between the price assessor and the supplier.”
The law defines a “price assessor” as the firm or individual that determines the prices underlying the price comparison, or the entity that actually makes the price comparison.
In simple terms, a business cannot legally run an ad using a specific competitor’s prices without telling the consumer exactly who went out and checked those prices. Furthermore, if the business has a relationship with the assessor—such as employing them, owning their firm, or paying them specifically for favorable marketing data—that relationship must be clearly and conspicuously disclosed to the public.
Why Honest Disclosures Matter
Truthful disclosures about who checks prices are the foundation of a fair and transparent market. When a business hides its price assessors, it harms the consumer and disrupts fair competition.
- Evaluating Bias: Consumers need to know if a price comparison was conducted by a truly neutral third party or by the retailer’s own marketing department. Hiding the assessor’s identity prevents the consumer from evaluating the data for potential bias.
- Trust in Verification: Shoppers are more likely to trust a price comparison if they believe an unbiased entity conducted it. Secretly using affiliated companies or paid staff to generate this data manipulates consumer trust to drive sales.
- Fair Competition: When a company falsely presents its own in-house marketing data as an objective market study by hiding the source, it gains an unfair advantage over honest competitors who do not use deceptive tactics to legitimize their claims.
Examples of Deceptive Hidden Assessors
A violation of these rules regarding hidden price assessors can take several forms:
- The Unnamed Source: A local electronics store runs a television ad stating, “According to a recent market assessment, our laptops are $150 cheaper than [Competitor Name].” However, the ad completely fails to mention who actually conducted the assessment.
- The Hidden In-House Checker: A furniture retailer publishes a chart online comparing their mattress prices to three named competitors. They vaguely cite “independent research,” but the price check was actually conducted by the retailer’s own sales manager, a relationship they fail to disclose.
- Undisclosed Paid Firms: An auto dealership hires an external marketing firm specifically to find data showing their prices are lower than a cross-town rival. The dealership cites the firm by name in their commercial but fails to conspicuously disclose the financial relationship between the dealership and the firm.
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. If a business wants to leverage a price comparison to boost sales, they cannot hide who gathered the data, and they must be honest about any biases or relationships that exist.
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.