Arkansas Deceptive Trade Practices Act
Under the Arkansas Deceptive Trade Practices Act, businesses cannot misrepresent any goods or services to the consumers through false advertising, or any other means. Those found in violation of this act will face fines, and possible imprisonment. Price gouging and "payday lenders" are considered violations of this act. Anyone seeking to bring a lawsuit against a business for violating this act must do so through their state's attorney general. Those who are successful will be compensated for all damages related to the violation, as well as attorney fees.
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Purpose
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Odometers cannot be rolled back when selling a car. The purpose of the Arkansas Deceptive Trade Practices Act (ADTPA) is to protect consumers from buying goods are services that have been falsely advertised. Under Section 4-88-107 of the Arkansas Code, it is illegal to misrepresent a good or service through advertising. In other words, the good or service must be equal to the way in which it was advertised. It is also illegal to roll back the odometer on any automobile that is being sold.
Attorney General
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Private citizens in Arkansas who wish to file a claim against a business or company for false advertising must do so along side the attorney general. The attorney general may then investigate the claim in order to see if anyone has engaged in, or is planning on engaging in an illegal act. Outside of consumers, labor organizations, the chamber of commerce, the better business bureau, or any other state agency may file a claim against a business for false advertising.
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Price Gouging
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Businesses may only raise prices by 10% during a state emergency. A 1997 amendment to the Arkansas Deceptive Trade Practices Act prohibits businesses from raising their prices, or price gouging, as the result of a disaster or state emergency. Under the amendment, also known as ACT 376, businesses can only raise the price of any good or service by 10 percent after a state emergency or disaster. Only the governor of Arkansas or the president may declare a state of emergency. Once the price gouging law goes into effect, it must remain in effect for at least 30 days.
Penalties
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Businesses convicted of violating the Act may face steep fines. Under the Arkansas Deceptive Trade Practices Act, those convicted of falsely advertising or in anyway not delivering on a good or service offered will be charged with a Class A misdemeanor if the violation was knowingly done. All money must be returned to the consumer, and all attorney fees, as well as damages, must be covered. The business may lose it’s permit, and ability to do future business within Arkansas, and may have to pay a fine of $10,000 per violation. Penalties may decrease if the violation was done unknowingly.
Payday Lending
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Arkansas Attorney General Dustin McDaniel claims that those who engage in “payday lending” are violating the terms of the Arkansas Deceptive Trade Practices Act. Payday lending consists of loans that are given to the general public with extremely high interests rates attached. The Center for Responsible Lending reported that payday lending in Arkansas cost consumers $25 million in excessive interest fees in 2005. Attorney General Dustin McDaniel has successfully shut down all business that offer payday lending, claiming it not only violates the Arkansas Deceptive Trade Practices Act, but the constitution of the state of Arkansas as well.
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