Starting a business is no walk in the park. It takes a lot of drive, determination and sheer willpower to achieve success. But not every day will hard work be rewarded especially if your company exists in a highly-competitive corporate environment.

Many business owners may not be able to endure the tough times and would buckle under pressure. The unfortunate thing is that it is not unusual for many companies to engage in unethical business practices just to overcome the challenges that come their way. While it may seem the easy way out, these shady methods will only do your business more harm than good.

What are unethical business practices?

The word unethical means not adhering to proper rules of conduct. When applied to the corporate world, these are generally considered as actions that are unacceptable, morally wrong, or committing an unfair advantage towards competitors or/and customers.

image of a man looking concerned

Not all unethical actions are actually illegal. This is the reason why there are sneaky companies who try to go around the system and argue that they are still within what’s lawful.

Any business, big or small, are vulnerable to committing these practices. For smaller companies, it is usually the owner who sets the tone on how employees conduct daily operational activities. If the big boss seems to be lenient regarding unethical business dealings, then this can also affect how the other employees will operate. For larger corporations, it is much harder to detect or control these activities. This is because most big companies have multiple business departments that function independently.

Examples of Unethical Business Practices

While many unethical business practices are commonly known across the business community, the rise of new industries and business tools have ushered in several underhanded tactics that are being used to gain an upper hand. Here are some of the most common examples.

False Product Promises

False advertising is probably one of the oldest trick in the book. While there’s nothing wrong with highlighting the benefits of your product or service, consciously misleading your customers is plain wrong.

Prior to the reign of digital advertising, it was much easier to control or make brands accountable for misleading claims. Advertisements in newspapers, TV and radio stations are usually reviewed by independent advertising boards to test out accuracy of the brands’ claims. This has somehow forced advertising agencies to become mindful of making outrageous statements.

However, with online advertising, it is virtually impossible to track every claim or statement posted in the internet. Left and right, you’ll read brand promises that would convince even the most doubtful pessimist. These are even supported by reviews allegedly written by real customers. There are even brands that  falsely use celebrities or TV shows to slap credibility on their products.

image of an online purchase

Major platforms like Amazon and Facebook are making an effort to control these practices by enforcing rules to advertisers or business owners. However, this does not stop companies from doing the same tactics in other sites online.

When marketing your product, it is best to stick to the truth. Highlight only what can be backed by studies or by what you have already achieved in the past. If you need to boost your marketing efforts, research new marketing techniques online or read top business books to get some inspiration.

Deceptive User Agreements

How many times have you signed up for a new web account and just randomly ticked the “I agree” button on the user agreement without really taking the time to read anything past the heading? You are not alone because according to a study, over 90% of consumers accept legal terms and conditions without reading them.

While many user agreements found on the internet are pretty standard boilerplates, what can be alarming is how some companies incorporate unrelated requests that would allow them to use your data in any way they want. This means that you may be unknowingly giving them the right to use your personal property like photos, writing or videos for public consumption. There have been many lawsuits and disputes about these deceptive measures and on the enforceability of user agreements but the practice have never really improved.

unethical business practices such as bad contracts

If your company is offering a service that require you to enforce a user agreement, make sure that you’re only limiting the terms to what your consumer is signing up for. While you might think that what you’re doing is just trying to cover all your bases, you might also be unknowingly breaking the law.

Selling or Buying Customer Data

A printed customer logbook is a thing of the past. Now, most companies maintain an electronic database of their clients and customers. This information may be readily provided by consumers while some data may be collected through repeated use of the services or products.

image of a man checking graphs

Customer data is valuable because it makes it easier for marketers to predict purchasing behaviour or to target specific demographics who may be more amenable to buying their products. Many start-up companies are often tempted to buy data as this is often cheaper than building their databases from scratch. This is why many consumers often get spam emails from unwarranted companies or cold sales calls out of the blue.

protect your data

Selling customer data is a lucrative business and unfortunately there are loopholes that makes it not entirely illegal in some countries. That does not mean that it’s not unethical. When you engage in data selling, not only are you breaking the trust of your customers, you’re also exposing yourself to whoever is buying your data. You might also be opening yourself to potential lawsuits depending on the nature of your business.

The Right Way of Business

image of a happy businessman

Businesses have a responsibility to deliver products and services that will not only enrich themselves but also make the lives of consumers better. Applying ethical standards in your business dealing may not always be the more profitable or convenient way to go. However, knowing that you are working towards your success without taking advantage of other people will greatly contribute to you career satisfaction and personal growth.