What is the Connecticut Unfair Trade Practices Act?
The Connecticut Unfair Trade Practices Act, or CUTPA, is a state law that has similarities to the Federal Trade Commission Act that prohibits unfair or deceptive acts or practices. Like the federal law, the CUTPA is designed to “prohibit unfair competition and unfair and deceptive acts,” according to the Connecticut State Department of Consumer Protection (DCP).
While the law specifically prohibits certain unfair or deceptive practices, it is important for businesses and consumers alike to remember that an unfair or deceptive act can be prohibited by the CUTPA even if it is not explicitly stated in the text of the statute. We want to say more about the CUTPA and how it impacts businesses and consumers in Connecticut.
Prohibits Under the Connecticut Unfair Trade Practices Act
Since its initial 1973 adoption, the CUTPA has undergone some amendments to reflect present needs. Currently, the CUTPA states that no one is allowed to engage in unfair methods of competition and unfair or deceptive acts or practices when conducting commerce.
The statute considers trade or commerce as advertising or the sale or rent or lease of any services and any property or thing of value in this state.”
In other words, if you do any type of business in the state of Connecticut, the CUTPA likely is applicable to you. However, there are a couple of exceptions. The statute cites the following as exceptions to the CUTPA:
- Certain transactions conducted by a regulatory board or officer under authority from the state or federal government; and
- Advertising done by a newspaper, periodical, radio station, or television station where the publisher or owner did not have knowledge of the false character of the advertisement, and did not have direct financial interest in the sale of the advertised product.
If a business believes it should be exempted from the terms of the CUTPA, the burden is on the business to prove that it is exempt
Investigations of CUTPA Violations
When a consumer alleges that a business has violated the CUTPA, the Department of Consumer Protection has authority under the law to conduct an investigation.
As part of its investigation, the DCP Commissioner has authority to enter an establishment to investigate as long as it is at a reasonable time, to check the invoices and records of a business, to access and copy business documents, and to engage in other actions that are part of a CUTPA violation investigation.
If the DCP Commissioner believes that a CUTPA violation has occurred, it can conduct a hearing. During the hearing, the DCP Commissioner has the authority to issue subpoenas in order to have witnesses appear and testify, as well as to compel a business to produce documents.
CUTPA Violation Penalties
A business that is determined to have violated the CUTPA can face serious penalties, including actual and punitive damages, attorneys’ fees, and penalties.
Seek Advice from a Connecticut Business Law Attorney
If you are facing a DCP investigation for a CUTPA violation, or if you have questions about CUTPA compliance, an experienced Connecticut business lawyer can speak with you today.
Contact StangerLaw LLC to learn more about the services we provide to businesses in the state.