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Exercise 9

Regulation of Trade Practices

Suzy Swift receives a telephone sales call from Bertha Beauty, Inc., asking her if she wants to purchase a New Face Beauty Kit for only $50, but saying nothing else about costs. Suzy agrees and pays for the kit with her credit card over the phone. She receives the kit in the mail, and when she inspects her credit card receipt, she finds she was charged $25 for shipping and handling, as well as another $50, for a beauty consultation. When Suzy calls Bertha Beauty to complain, she is told the initial phone call was in fact a beauty consultation. Suzy files a lawsuit against Bertha Beauty for the additional $75 charged to her. Bertha Beauty claims Suzy must have known she would have been charged shipping and handling, and that the telephone saleswoman in fact referred to the call as a ‘beauty consultation’ and gave Suzy beauty advice during that call.

How should the judge rule?

A. For Suzy, because Bertha Beauty violated the Unfair Practices Act.
ANSWER "A" IS CORRECT. Under the Unfair Practices Act, it is clear that Suzy should have been informed of all the costs and terms of the agreement made with Bertha Beauty before she committed to it. Furthermore, although Suzy’s actual damages are $75, the court could find Bertha Beauty has willfully engaged in deceptive trade practices and award Suzy up to three times actual damages or $300, whichever is greater – as well as court costs and attorney’s fees.
B. For Bertha Beauty, because Suzy did agree to pay to have the kit sent to her, and Suzy did receive beauty advice during the initial sales call.
ANSWER "B" IS NOT CORRECT. Please try again.