If the party committed a crime and guards have been called on the party, it's possible to cast Feign Death on the party member who committed the crime to avoid being interrogated. The guards will generally leave before the spell runs out, and the party can keep all the stolen goods.
Depending on the severity of the crime, the other party members might be interrogated as well and might need to roll a Charisma Check, so it's better used for petty stuff like pickpocketing or for more severe stuff if the other party members are nowhere near.
Prior to Patch #7, Applying Feign Death on an allied NPC (denoted by a green outline when moused-over) was not considered a hostile action and wouldn't not offend the target or any nearby NPCs. Moreover, Stealing from an NPC with Feigning Death did not trigger hostility, provided no other NPCs witness the crime, and the target NPC will not notice anything has been stolen upon waking. Failing a pickpocket attempt, however, will terminate the current pickpocketing session, which may not be resumed until the next turn during turn-based mode, but will not wake the NPC. This is particularly effective when used on Traders, who can be made friendly by donating large sums of Gold (usually about 1500-2000 is sufficient). However after Patch #7, NPC cannot be targeted by this spell.
Psychic. Disease and Poison no longer have any effect.
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Action + 
Level 3 Spell Slot
Melee: 1.5 m / 5 ft
Duration: 10 turns 
Feign death on the Forgotten Realms Wiki