Consumer Protection and Ethics
What the exam tests
Consumer Protection and Ethics tests advertising, misrepresentation, unfair trade practices, privacy, and professional conduct. Questions ask whether a statement or practice is deceptive or unethical.
Core rules
- Pennsylvania’s Unfair Trade Practices and Consumer Protection Law prohibits deceptive or misleading conduct in consumer transactions, including real estate advertising.
- Advertising must be truthful, identify the brokerage, and not mislead about price, terms, availability, or the licensee’s role; team names must not obscure the broker.
- Licensees must protect confidential information, avoid conflicts of interest, and disclose compensation and agency relationships.
- Telemarketing and email marketing must comply with Do Not Call and CAN-SPAM rules; solicitations must honor opt-outs.
- Ethical duties may exceed legal duties; a Realtor is also subject to the Code of Ethics, but all licensees are subject to Commission discipline.
Worked example
A licensee advertises “Guaranteed 8% return” on a rental property without disclosing that the projection assumes full occupancy and ignores expenses. The statement is misleading and violates consumer protection law. The licensee should present a range, disclose assumptions, and avoid guaranteeing investment results.
Traps that cost marks
Do not treat puffery as a safe harbor for false statements of fact. Do not omit the brokerage name from ads. Do not use a client’s information for marketing without consent. Do not assume an “as-is” sale eliminates disclosure duties.