When consumers look for the best deal, they often rely on price comparisons. If a retailer claims their television is $100 cheaper than a specific competitor’s, or an auto shop advertises that their oil change is half the price of the shop down the street, those comparisons strongly influence buying decisions. Under the Utah Truth in Advertising Act, consumers are protected from being manipulated by skewed, outdated, or fabricated price comparisons
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 manipulates pricing data to make their own offers appear artificially superior.
The Rules on Competitor Price Games
Specifically, Utah Code § 13-11a-3(1) extensively addresses how businesses can and cannot use a competitor’s prices in their advertising. The law states that a deceptive trade practice occurs when a person or business:
(l) makes a comparison between the person’s own sale or discount price and a competitor’s nondiscounted price without clearly and conspicuously disclosing that fact;
(m) without clearly and conspicuously disclosing the date of the price assessment makes a price comparison… based upon a price assessment performed more than seven days prior to the date of the advertisement;
(n) 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;
(q) advertises a price 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;
In simple terms, a business cannot legally compare its temporary sale price to a competitor’s full retail price without telling you, use outdated pricing data to make their deal look better, or invent a competitor’s price that is not entirely accurate. If they hire someone to check prices, they must disclose who did it and if they have a relationship with them.
Why Honest Price Comparisons Matter
Truthful price comparisons are the foundation of a fair and transparent market. When a business uses competitor price games, it harms the consumer and disrupts the local economy.
- Accurate Valuation: Consumers use comparison pricing to determine what a fair market rate actually is. Falsified competitor prices warp the consumer’s understanding of an item’s true value.
- Time and Effort: Shoppers trust advertised comparisons to save them the time of checking multiple stores themselves. Deceptive comparisons exploit that trust, causing consumers to overpay under the false belief they are getting the best deal in town.
- Fair Competition: When a company falsely inflates a competitor’s prices in an advertisement to make their own look lower, it steals business from honest competitors who are offering genuinely competitive rates.
Examples of Deceptive Price Games
A violation of these rules regarding competitor price comparisons can take several forms:
- The Apples-to-Oranges Sale: A mattress store advertising a massive holiday sale event and proudly claiming their sale price is 30% lower than “Competitor X”—but failing to mention that they are comparing their temporary sale price against Competitor X’s everyday, full retail price.
- Outdated Pricing Data: A grocery store running a television ad claiming their milk is cheaper than a rival chain, based on a price check they secretly conducted three months ago, ignoring the fact that the rival chain has since lowered their prices.
- Fabricated Competitor Rates: A local plumber putting a chart on their website comparing their hourly rate to three specific local competitors, but artificially inflating the competitors’ rates on the chart to make their own pricing look like an incredible bargain.
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. Businesses must maintain the factual records of their price comparisons for a year to prove their claims were valid and accurate when made.
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.