2010 Tennessee Code
Title 47 - Commercial Instruments And Transactions
Chapter 18 - Consumer Protection
Part 1 - Consumer Protection Act of 1977
47-18-104 - Unfair or deceptive acts prohibited. [Amended effective July 1, 2010. See the Compiler's Notes.]

47-18-104. Unfair or deceptive acts prohibited. [Amended effective July 1, 2010. See the Compiler's Notes.]

(a)  Unfair or deceptive acts or practices affecting the conduct of any trade or commerce constitute unlawful acts or practices and are Class B misdemeanors.

(b)  Without limiting the scope of subsection (a), the following unfair or deceptive acts or practices affecting the conduct of any trade or commerce are declared to be unlawful and in violation of this part:

     (1)  Falsely passing off goods or services as those of another;

     (2)  Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of goods or services. This subdivision (b)(2) does not prohibit the private labeling of goods and services;

     (3)  Causing likelihood of confusion or misunderstanding as to affiliation, connection or association with, or certification by, another. This subdivision (b)(3) does not prohibit the private labeling of goods or services;

     (4)  Using deceptive representations or designations of geographic origin in connection with goods or services;

     (5)  Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have or that a person has a sponsorship approval, status, affiliation or connection that such person does not have;

     (6)  Representing that goods are original or new if they are deteriorated, altered to the point of decreasing the value, reconditioned, reclaimed, used or secondhand;

     (7)  Representing that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another;

     (8)  Disparaging the goods, services or business of another by false or misleading representations of fact;

     (9)  Advertising goods or services with intent not to sell them as advertised;

     (10)  Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

     (11)  Making false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions;

     (12)  Representing that a consumer transaction confers or involves rights, remedies or obligations that it does not have or involve or which are prohibited by law;

     (13)  Representing that a service, replacement or repair is needed when it is not;

     (14)  Causing confusion or misunderstanding with respect to the authority of a salesperson, representative or agent to negotiate the final terms of a consumer transaction;

     (15)  Failing to disclose that a charge for the servicing of any goods in whole or in part is based on a predetermined rate or charge, or guarantee or warranty, instead of the value of the services actually performed;

     (16)  Disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge, except as provided for in § 39-14-132(b);

     (17)  Advertising of any sale by falsely representing that a person is going out of business;

     (18)  Using or employing a chain referral sales plan in connection with the sale or offer to sell of goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement or agreement in which the buyer or prospective buyer is offered the opportunity to purchase goods or services and, in connection with the purchase, receives the seller's promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers if the receipt of compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchases the merchandise or goods;

     (19)  Representing that a guarantee or warranty confers or involves rights or remedies which it does not have or involve; provided, that nothing in this subdivision (b)(19) shall be construed to alter the implied warranty of merchantability as defined in § 47-2-314;

     (20)  Selling or offering to sell, either directly or associated with the sale of goods or services, a right of participation in a pyramid distributorship. As used in this subdivision (b)(20), a “pyramid distributorship” means any sales plan or operation for the sale or distribution of goods, services or other property wherein a person for a consideration acquires the opportunity to receive a pecuniary benefit, which is not primarily contingent on the volume or quantity of goods, services or other property sold or delivered to consumers, and is based upon the inducement of additional persons, by such person or others, regardless of number, to participate in the same plan or operation;

     (21)  Using statements or illustrations in any advertisement which create a false impression of the grade, quality, quantity, make, value, age, size, color, usability or origin of the goods or services offered, or which may otherwise misrepresent the goods or services in such a manner that later, on disclosure of the true facts, there is a likelihood that the buyer may be switched from the advertised goods or services to other goods or services;

     (22)  Using any advertisement containing an offer to sell goods or services when the offer is not a bona fide effort to sell the advertised goods or services. An offer is not bona fide, even though the true facts are subsequently made known to the buyer, if the first contact or interview is secured by deception;

     (23)  Representing in any advertisement a false impression that the offer of goods has been occasioned by a financial or natural catastrophe when such is not true, or misrepresenting the former price, savings, quality or ownership of any goods sold;

     (24)  Assessing a penalty for the prepayment or early payment of a fee or charge for services by a utility or company which has been issued a franchise license by a municipal governing body to provide services. Nothing in this subdivision (b)(24) shall be construed to prohibit a discount from being offered for early payment of the applicable fee or charge for services. This subdivision (b)(24) does not apply to a utility or company whose billing statement reflects charges both for service previously rendered and in advance of services provided;

     (25)  Discriminating against any disabled individual, as defined by §§ 47-18-802(b) and 55-21-102(3), in violation of the Tennessee Equal Consumer Credit Act of 1974, compiled in part 8 of this chapter. This subdivision (b)(25) does not apply to any creditor or credit card issuer regulated by the department of financial institutions. The division shall refer any complaint against such a creditor or credit card issuer involving the Equal Consumer Credit Act to such department for investigation and disposition;

     (26)  Violating the provisions of § 65-5-106;

     (27)  Engaging in any other act or practice which is deceptive to the consumer or to any other person;

     (28)  (A)  (i)  Failing of a motor vehicle repair facility to return to a customer any parts which were removed from the motor vehicle and replaced during the process of repair if the customer, at the time repair work was authorized, requested return of such parts; provided, that any part retained by the motor vehicle repair facility as part of a trade-in agreement or core charge agreement for a reconditioned part need not be returned to the customer unless the customer agrees to pay the facility the additional core charge or other trade-in fee; and provided further, that any part required to be returned to a manufacturer or distributor under a warranty agreement or any part required by any federal or state statute or rule or regulation to be disposed of by the facility need not be returned to the customer; or

                (ii)  Failing of a motor vehicle repair facility to permit inspection of any parts retained by the repair facility if the customer, at the time repair work was authorized, expressed the customer's desire to inspect such parts; provided, that if, after inspection, the customer requests return of such parts, the restrictions set forth in subdivision (b)(28)(A)(i) shall apply;

          (B)  (i)  Failing of a motor vehicle repair facility to post in a prominent location notice of the provisions of this subdivision (b)(28); or

                (ii)  Failing of a motor vehicle repair facility to print on the repair contract notice of the provisions of this subdivision (b)(28);

          (C)  The motor vehicle repair facility need not retain any parts not returned to the customer after the motor vehicle has been returned to the customer;

     (29)  Advertising that a business is “going out of business” more than ninety (90) days before such business ceases to operate;

     (30)  Failing to comply with §§ 6-55-401 6-55-413, where a municipality has adopted the regulations of liquidation sales pursuant to § 6-55-413;

     (31)  Offering lottery winnings in exchange for making a purchase or incurring a monetary obligation pursuant to § 47-18-120;

     (32)  (A)  The act of misrepresenting the geographic location of a person through a business name or listing in a local telephone directory or on the Internet is an unfair or deceptive act or practice affecting the conduct of trade or commerce, if:

                (i)  The name misrepresents the person's geographic location; or

                (ii)  The listing fails to clearly and conspicuously identify the locality and state of the person's business;

                (iii)  Calls to the listed telephone number are routinely forwarded or otherwise transferred to a person's business location that is outside the calling area covered by the local telephone directory, or that is outside the local calling area for the telephone number that is listed on the Internet;

                (iv)  The person's business location is located in a county that is not contiguous to a county in the calling area covered by the local telephone directory, or is located in a county that is not contiguous to a county in the local calling area for the telephone number that is listed on the Internet; and

                (v)  The person does not have a business location or branch, or an affiliate or subsidiary of the person does not have a business location or branch, in the calling area or county contiguous to the local calling area.

          (B)  This subdivision (b)(32) shall not apply:

                (i)  To a telecommunications service provider, an Internet service provider, or to the publisher or distributor of a local telephone directory unless the act is on behalf of the Internet or telecommunications service provider or on behalf of the publisher or distributor of the local telephone directory; or

                (ii)  To the act of listing a number for a call center. For purposes of this subdivision (b)(32)(B)(ii), “call center” means a location that utilizes telecommunication services for activities related to an existing customer relationship, including, but not limited to, customer services, reactivating dormant accounts or receiving reservations.

          (C)  Notwithstanding any other law to the contrary, and without limiting the scope of § 47-18-104, a violation of this subdivision (b)(32) shall be punishable by a nonremedial civil penalty of a minimum of one thousand dollars ($1,000) to a maximum of five thousand dollars ($5,000) per violation. Civil penalties assessed under this subdivision (b)(32) are separate and apart from the remedial civil penalties authorized in § 47-18-108(b)(3).

          (D)  This subdivision (b)(32) applies only to information supplied to a telephone directory published after July 1, 2008, information that is published on the Internet after July 1, 2008, or to information supplied for entry into a directory assistance database after July 1, 2008;

     (33)  Advertising that a person is an electrician for hire when such person has not been licensed by a local jurisdiction to perform electrical work within such jurisdiction or by the state as a limited licensed electrician or contractor, as appropriate or, if no such licenses are then available, such person is not registered with the state;

     (34)  Unreasonably raising prices or unreasonably restricting supplies of essential goods, commodities or services in direct response to a crime, act of terrorism, war, or natural disaster, regardless of whether such crime, act of terrorism, war, or natural disaster occurred in the state of Tennessee;

     (35)  Representing that a person is a licensed contractor when such person has not been licensed as required by § 62-6-103 or § 62-37-104; or, acting in the capacity of a “contractor” as defined in §§ 62-6-102(3)(A), 62-6-102(5) or 62-37-103(5), and related rules and regulations of the state of Tennessee, or any similar statutes, rules and regulations of another state, while not licensed;

     (36)  (A)  Using any advertisement for a workshop, seminar, conference, or other meeting that contains a reference to a living trust or a revocable living trust, or that otherwise offers advice or counsel on estate taxation unless such advertisement also includes the information required in this subdivision (b)(36);

          (B)  An advertisement as provided in this subdivision (b)(36) shall, at a minimum, include the following:

                (i)  The maximum exclusion for federal estate tax purposes and the maximum exemption for state inheritance tax purposes for the year in which the advertisement appears;

                (ii)  Includes a statement that certain property, including real property, insurance proceeds, deposit accounts, stocks and retirement fund, may be taxable or not taxable, depending on how legal title is held or beneficiary designation is made, or both;

                (iii)  Includes a statement that certain property may be transferred through several different means including, but not limited to, joint ownership of property with rights of survivorship, joint deposit accounts, beneficiary designations or elections permitted under retirement plans, insurance policies, trusts, or wills; and

                (iv)  A statement that before creating any transfer through a living trust, revocable living trust, or otherwise, the individual should seek advice from an attorney, accountant or other tax professional to determine the true tax impact and ensure that assets are properly transferred into any trust;

          (C)  The disclosure required in this subdivision (b)(36) shall be printed in not less than 10-point type;

          (D)  The provisions of this subdivision (b)(36) shall not apply to an advertisement by any attorney, law firm, bank, savings institution, trust company, or registered securities broker-dealer which is directed to clients or customers of such person with whom such person has had a client or customer relationship within the prior two (2) years. The provisions of this subdivision (b)(36) shall also not apply to any continuing education seminars or conferences conducted for the benefit of bankers, attorneys, accountants, or other professional financial advisors;

     (37)  Refusing to accept the return of clothing or accessories sold at retail directly to a purchaser, who seeks to return the same for any reason for refund or credit; provided, that:

          (A)  The purchaser presents the clothing or accessories within the retailer's prescribed period for return of merchandise;

          (B)  The purchaser presents satisfactory proof of purchase;

          (C)  The merchandise is, in no way, damaged and exhibits no sign of wear or cleaning;

          (D)  All tags and stickers affixed or attached to the merchandise at the time of sale remain affixed or attached at the time of return; and

          (E)  The sale of the merchandise was not marked, advertised or otherwise characterized as “final”, “no return”, “no refunds”, or in any manner reasonably indicating that the merchandise would not be accepted for return;

     (38)  (A)  Requiring the purchaser to present that purchaser's driver license as a prerequisite for accepting the return of clothing or accessories for refund or credit, notwithstanding compliance with the conditions set forth in subdivision (b)(37), unless such a requirement is for the purpose of preventing fraud and abuse;

          (B)  Notwithstanding any provision of subdivision (b)(37) or (b)(38)(A) to the contrary, return denials are permitted for the purpose of preventing fraud and abuse; [Effective until July 1, 2010. See the Compiler's Notes.]

     (39)  (A)  Engaging in the business of debt adjusting and:

                (i)  Failing to disburse all funds to the appropriate creditors within thirty (30) days of receipt of the funds from the debtor, less any contributions or fees not prohibited by subdivisions (b)(39)(A)(iii)-(vi);

                (ii)  Failing to maintain a separate trust account for the receipt of any funds from debtors and the disbursement of the funds to creditors on behalf of the debtors;

                (iii)  Accepting a contribution or fee exceeding seventy-five dollars ($75.00) from a debtor for an initial set up;

                (iv)  Accepting a consultation contribution or fee exceeding fifty dollars ($50.00) per calendar year from a debtor;

                (v)  Accepting a periodic contribution or fee from a debtor that exceeds the greater of eight and one half percent (8.5%) of the amount paid by a debtor each month for distribution to the debtor's creditors or thirty dollars ($30.00);

                (vi)  Charging the debtor a bad check handling fee in excess of twenty dollars ($20.00);

                (vii)  Failing to obtain and at all times maintain insurance coverage for errors and omissions, employee dishonesty, depositor's forgery, and computer fraud, with a minimum limit of one hundred thousand dollars ($100,000) and that names the division of consumer affairs of the department of commerce and insurance and the consumer protection division of the office of the attorney general as additional interested parties;

                (viii)  Failing to provide, prior to the execution of a contract,agreement debt management or adjustment plan, the following statement, printed in bold and capital letters, following which shall be an area on the information statement for the consumer to sign and date the information statement:

With respect to my credit history, I understand that my participation in the DMP may affect my credit report either favorably or unfavorably according to my creditor's policies with respect to the DMP and my payment history prior to and during my participating in the DMP. I also understand that, for any joint accounts, my spouse's credit rating may affect my credit rating either favorably or unfavorably;

          (B)  The fees or contributions described in subdivisions (b)(39)(A)(iii)-(v) may be adjusted on an annual basis by the amount no greater than the equivalent to any increase in the consumer price index, all urban consumers, not seasonally adjusted, 1982-84 = 100, published by the United States department of labor, bureau of labor statistics;

          (C)  For the purposes of this subdivision (b)(39), “debt adjusting” means doing business in debt adjusting, budget counseling, debt management, or debt pooling service or holding oneself out, by words of similar import, as providing services to debtors in the management of their debts to do any of the following:

                (i)  Effect the adjustment, compromise, or discharge of any account, note or other indebtedness of the debtor;

                (ii)  Receive from the debtor and disburse to the debtor's creditors any money or other thing of value; or

                (iii)  Solicit business and advertise as a debt adjuster;

          (D)  The following persons shall not be considered adjusters for the purposes of this subdivision (b)(39):

                (i)  Any attorney-at-law of this state;

                (ii)  Any person who is a regular, full-time employee of a debtor, and who acts as an adjuster of the employer's debts;

                (iii)  Any person acting pursuant to any order or judgment of court, or pursuant to authority conferred by any law of this state or of the United States;

                (iv)  Any person who is a creditor of the debtor, or an agent of one (1) or more creditors of the debtor, and whose services in adjusting the debtor's debts are rendered without cost to the debtor;

                (v)  Any person who, at the request of a debtor, arranges for or makes a loan to the debtor, and who, at the authorization of the debtor, acts as an adjuster of the debtor's debts in the disbursement of the proceeds of the loan, without compensation for the services rendered in adjusting the debts; and

                (vi)  Any charitable, religious or educational organization,determined to be exempt from taxation under § (501)(c)(3) of the Internal Revenue Code that is not in the business of debt adjusting;

     (40)  Representing that a person, or such person's agent, authorized designee or delegee for hire, has conducted a foreclosure on real property, when such person knew or should have known that a foreclosure was not actually conducted on the real property;

     (41)  (A)  Selling or offering to sell a secondhand mattress in this state or importing secondhand mattresses into this state for the purpose of resale in violation of § 68-15-203(b), or offering a comfort exchange policy to a mattress buyer pursuant to the sale of the mattress in violation of title 68, chapter 15, part 2;

          (B)  Subdivision (b)(41)(A) shall apply to a mattress manufacturer, wholesaler or retailer. Subdivision (b)(41)(A) shall not apply to an institution or organization that has received a determination of exemption from the internal revenue service under 26 U.S.C. § 501(c)(3), and as described in § 67-6-348. The exemption provided in this subdivision (b)(41)(B) shall be limited to institutions or organizations that are not organized or operated for profit, and no part of the net earnings of which inures to the benefit of any private shareholder or individual;

     (42)  (A)  Knowingly advertising or marketing for sale a newly constructed residence as having more bedrooms than are permitted by the newly constructed residence's subsurface sewage disposal system permit, as defined in § 68-221-402, unless prior to the execution of any sales agreement the permitted number of bedrooms is disclosed in writing to the buyer. The real estate licensee representing the owner may rely upon information furnished by the owner;

          (B)  If a newly constructed residence is marketed for sale as having more bedrooms than are permitted by the subsurface sewage disposal system permit and no disclosure of the actual number of bedrooms permitted occurs prior to the execution of a sales agreement, then the buyer shall have the right to rescind the sales agreement and may recover treble damages as provided in § 47-18-109;

          (C)  A subsurface sewage disposal system permit issued in the name of the owner of a newly constructed residence shall serve as constructive notice to that owner of the newly constructed residence for the purpose of establishing knowledge as to the number of bedrooms of the newly constructed residence for the purpose of finding a violation of this subdivision (b)(42). A real estate licensee representing the owner must have actual knowledge transmitted from the owner to the real estate licensee to be in violation of this subdivision (b)(42);

     (43)  Offering, through the mail or by other means, a check that contains an obligation to advertise with a person upon the endorsement of the check. The obligation is effective upon the check being signed and deposited into the consumer's bank account;

     (44)  The act or practice of directly or indirectly:

          (A)  Making representations that a person will pay or reimburse for a motor vehicle traffic citation for any person who purchases a device or mechanism, passive or active, that can detect or interfere with a radar, laser or other device used to measure the speed of motor vehicles;

          (B)  Advertising, promoting, selling or offering for sale any radar jamming device that includes any active or passive device, instrument, mechanism, or equipment that interferes with, disrupts, or scrambles the radar or laser that is used by law enforcement agencies and officers to measure the speed of motor vehicles; or

          (C)  Advertising, promoting, selling or offering for sale any good or service that is illegal or unlawful to sell in the state; and

     (45)  Violating § 47-18-5402.

(c)  The following are among the acts or practices which will be considered in determining if an offer to sell goods or services is not bona fide:

     (1)  Refusal to reasonably show, demonstrate or sell the goods or services offered in accordance with the terms of the offer;

     (2)  Disparagement by acts or words of the advertised goods or services or disparagement with respect to the guarantee, credit terms, availability of service, repairs or parts, or in any other respect, in connection with the advertised goods or services;

     (3)  Failure to make available at all outlets listed in the advertisement a sufficient quantity of the advertised goods or services to meet reasonably expectable public demand, unless the advertisement clearly and conspicuously discloses that the availability of a particular good is limited and/or the goods or services are available only at designated outlets, or unless the advertisement discloses that a particular good is to be closed out or offered for a limited time. In the event of an inadequate inventory, issuing of “rain checks” for goods or offering comparable or better goods at the sale price may be considered a good faith effort to make the advertised goods available, unless there is a pattern of inadequate inventory or unless the inadequate inventory was intentional. If rain checks are offered, the goods must be delivered within a reasonable time;

     (4)  Refusal to take orders or give rain checks for the advertised goods or services, when the advertisement does not disclose their limited quantity or availability to be delivered within a reasonable period of time;

     (5)  Showing or demonstrating goods or services which are defective, unusable or impractical for the purpose represented or implied in the advertisement when such defective, unusable or impractical nature is not fairly and adequately disclosed in the advertisement; and

     (6)  Use of a sales plan or method of compensating or penalizing salespersons designed to prevent or discourage them from selling the advertised goods or services. This does not prohibit compensating salespersons by use of a commission.

(d)  The fact that a seller occasionally sells the advertised goods or services at the advertised price does not constitute a defense when the seller's overall purpose is to engage in bait and switch tactics.

(e)  Nothing in § 47-18-103(1) or subdivisions (b)(21)-(23) and subsections (c) and (d) shall prevent a seller from advertising goods and services with the hope that consumers will buy goods or services in addition to those advertised.

[Acts 1977, ch. 438, § 4; 1986, ch. 860, §§ 2-4; 1988, ch. 974, § 2; 1989, ch. 498, §§ 1, 2; 1989, ch. 591, § 113; 1990, ch. 675, § 2; 1990, ch. 1030, § 33; 1990, ch. 1041, § 1; 1990, ch. 1050, §§ 1-4; 1991, ch. 264, § 1; 1991, ch. 507, § 2; 1992, ch. 803, § 1; 1992, ch. 890, § 1; 1993, ch. 180, § 1; 1993, ch. 402, § 1; 1997, ch. 234, § 2; 1998, ch. 627, § 3; 1999, ch. 473, § 2; 2000, ch. 643, § 1; 2002, ch. 849, § 8; 2004, ch. 492, § 1; 2004, ch. 637, § 1; 2005, ch. 134, § 1; 2005, ch. 199, § 1; 2005, ch. 272, § 1; 2006, ch. 628, § 1; 2006, ch. 671, § 1; 2006, ch. 746, § 1; 2007, ch. 35, § 1; 2007, ch. 78, § 1; 2007, ch. 121, 1; 2007, ch. 503, § 1; 2008, ch. 873, § 2; 2009, ch. 198, § 2; 2009, ch. 469, § 2.]  

Disclaimer: These codes may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.