The Importance Of Business Ethics

9 Pages 2334 Words

FTC’s 1983 policy on “deception,” a particular practice must satisfy three criteria. The deception must involve a material misrepresentation, omission or practice. Second it must be likely to mislead a person who acts reasonably under the circumstances.
Moorthy gives an example of an advertisement that clearly fits the requirements of the statute (Moorthy.43-47). The deceptive advertisement at issue here is produced by a company, which consolidates airline tickets. Ticket consolidation is a process whereby a company buys blocks of tickets at wholesale prices from airlines trying to fill flights.
When one purchases from a ticket consolidator, they must register with the consolidator weeks before a scheduled trip and work up a list of possible destinations and departure dates. The week before one plans to leave, the consolidator should contact him and give him a list of flights that they think can get him on. The traveler is then obligated to accept one of the flights, even if it was not his first choice. If everything works as planned, the traveler will likely save a significant amount of money on the air fair. However, the traveler also has to pay an initial search fee to the consolidator and then perhaps and additional “finders fee.”
Ticket consolidators have been accused of many fraudulent business practices. Many do not accept credit cards and many accept a prospective traveler’s money but fail to provide the ticket consolidators by first checking with the Better Business Bureau. Second by insisting they pay with a credit card, and third by confirming reservations both before and after purchasing the tickets from the consolidator.
The advertisement was from a company that can only be identified by its phone number, “1-800-LOW-FARE.” The advertisement was published on the second page of the travel section of different Sunday newspapers. The main problem with the advertisement was that it appeared to...