Presentation on theme: "Consumer Protection Laws"— Presentation transcript:
1 Consumer Protection Laws Drama in the lawCar sales in Bastra
2 Consumer Credit Protection Annual Credit Reporthttps://www.annualcreditreport.com/cra/index.jspConsumer Credit ProtectionEqual Credit Opportunity ActFair Credit Reporting ActIf denied credit based on report – consumer must be notifiedReporting agency must investigate consumer reports of inaccurate informationConsumer can file 100 word rebuttalWho has access to credit reports?What about other types of reports? Prior litigation records, for instance.Fair and Accurate Credit Transaction Act (FACT)Right to see your reportCredit card receipts truncatedRules on disposing of sensitive information
3 Truth-in-Lending Act Regulation Z $50 maximum loss Carlisle v. Whirlpool Financial – Door-to-door sales of satellite dishes. Cost $1,100 but could pay $200 down and finance the rest (avail. elsewhere for $199). Financial terms not disclosed in accordance with Truth-in-Lending Law – plaintiffs awarded $581 million.Purtle v. Eldridge – Purtle bought a car from Eldridge on credit. She lied on the credit application about her job status. Eldridge failed to disclose the finance charge, the annual percentage rate, or the total sales price in violation of the TILA. What happens?Truth-in-Lending ActRegulation Z$50 maximum lossStrictly construed against lenderwhy?“Reg Z” box – Required for Loans Subject to TILA
4 Credit Card Disclosure Rules Fees and APR in boldKey terms highlighted in a table – similar to Reg Z boxPeriodic statements easier to readAccount changes must be displayed in a box near the topLaw also limits when credit card companies can increase ratesChanges to terms must give 45 day notice – can opt out if do not agree with the changesProtects against due date practicesOutlaws banks giving away promotional items on college campuses
5 Fair Debt Collections Practices Act Contacting the debtor at the debtor’s place of businessContacting the debtor at an inconvenient timeContacting third partiesUsing harassment or intimidationCommunicating with the debtor at any time after receiving notice that the debtor is refusing to pay the debtValidation Notice (30 days to dispute)Only applies to “debt collectors”
6 Telemarketing$600 Billion sales volume4 million employees100 million calls a dayDirect Marketing Activities Telemarketing Regulated by state and federal lawTelephone Consumer Protection ActProhibits automated dialing machine orPre-recorded voiceFax advertising limitedTelemarketing and Consumer Fraud and Abuse Prevention Act of 1994Applies to most telemarketingRequiresInform recipient that the call is a sales callIdentify seller’s name and the productInform of total costOther sales conditions – i.e. whether it’s final or non-refundable$10,000 per violation penaltyPrivate parties may bring suit in Federal court if they have suffered more than $50,000 in damagesMust provide caller ID informationWhy is it significant that a private party can bring an action, who else would?
7 Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc Presentation Case: Omega World Travel (P) v. Mummagraphics, Inc. (D) (4th Cir 2006), p Groups 10 & 7v.Mummagraphics, Inc.Omega World Travel800 start here Thursday – do Patrick’s case firsty
8 Direct Marketing Activities Do Not Call List National Do Not Call List started in 20031991 Telephone Consumer Protection ActCourt struck down the list based on lack of authority – according to the judge the FCC, not the FTC should have developed the list.1994 Telemarketing and Consumer Fraud and Abuse Prevention ActRep Billy Tauzin joked “[the] law should be called “This time we really mean it act.”Five year limit – so names are beginning to be purged as of Sept 15, 2007, 2012, 2017 next year to reapply (set in place to help with people who move or change numbers)Exempt – politicians, non-profitsNot Businesses. Businesses cannot sign upBusinesses That Call – must check list. Ok to call if business relationship in past 18 monthsCell Phones?
9 SPAM laws – CAN-SPAM ACT of 2003 Commercial . Act covers whose primary purpose is advertisingthat facilitates an agreed-upon transaction or updates an existing customer is exempt (although it cannot be false or misleading)Main provisions:Bans false or misleading headers. The From and To line must be acurate.Bans deceptive subject line.Requires opt-out methodRequires a valid physical addressDo Not Legislation. The FTC commissioned a 60 page study that concluded a do not list is not feasible at this time.
14 Presentation Case - Home Solicitations Rossi v Presentation Case - Home Solicitations Rossi v. 21st Century Concepts, Inc. , p. 303 Groups 8 & 13
15 More Consumer Protection Laws End of Chapter Q: 8: Hantske v. BrandenburgerFacts: Fred Hantske Jr was telephoned by Brandenburger & Davis and told he was a possible heir to an estate. They agreed to meet in Hantske’s home to discuss and Hantske agreed to give Brandenburger 25%. Hanske got $30,000 ($7,500 = 25%) and cancelled the contract.Home Solicitations3 day cooling off ruleLocationHomeHotelFairgroundConventionUnsolicited merchandise900 NumbersDisclose nameThe cost of the call in the introductory messageOpportunity to hang up without chargeWarranties. - covered in separate chapterCase Illustration 8.3 Kamposkek v. JohnsonHome improvementBuilder did not give noticeBuyer cancels contract
16 Labeling and Packaging Regulation Heavily regulatedFair Packaging and Labeling Act of 1966Identify productIdentify quantityFederal Cigarette Labeling and Advertising Act of (warnings – modified by at least 3 more acts)Made in USA Labeling (all or virtually all for FTC – NAFTA = at least 55% from US, Canada or Mexico)1990 Nutrition Labeling and Education Act
17 Food Drug and Cosmetics Laws Food purity regulated1990 Nutrition Labeling and Education ActThe FDA's action level for peanut butter is 30 or more insect fragments or one or more rodent hairs per 100 grams.
19 Ban dangerous products Recall dangerous products Example of RecallDangers to ChildrenBan dangerous productsRecall dangerous productsMattel voluntarily recalled this toy in August of 2007 because the Chinese company that made it used lead paint to save moneyAn estimated 6,100 people have been treated in hospital emergency rooms for injuries involving lawn darts from 1978 through present. At least 80 percent of the victims were younger than 15 years old, and more than 50 percent were ten years old or younger. More than half of the victims had injuries to the skull, eye, ear or face.
20 Consumer Product Safety Improvement Act. Lead testing for wood toys? $300-$4,000 per toy.Bikes?Books?
21 Dangers to Everyone Mirama Juicer - Consumer told Mirama that “juicer suddenly exploded, throwing with great violence pieces of the clear plastic cover and shreds of the razor sharp separator screen as far as eight feet in my kitchen.”Mattel Article re: informing FTCFord Explorer and Firestone.In 2000, Firestone recalled 14.4 Million Tires10 years after first lawsuit filed against Ford based on the Explorer119 DeathsJuicer – Not Mirama
22 Using Consumer Protection as a Sword ATVs. Polaris, Honda & Suzuki are lobbying Congress to require safety standards (after losing 40% of the market to cheaper Chinese and Taiwanese imports).Wireless. Yahoo, Google support open market – AT&T and Verzion like closed system giving them control over their infrastructureCredit Card Fees. Claim high interchange fees are bad for consumers
23 Presentation Case, Gonzalez (P) v. Kay (D), (Fth Cir 2009), p. 306 Presentation Case, Gonzalez (P) v. Kay (D), (Fth Cir 2009), p Groups 6 & 3