Presentation is loading. Please wait.

Presentation is loading. Please wait.

Consumer Protection – 15.1 The Development of Consumer Protection Law –Caveat Emptor to Caveat Venditor, consumers have many more rights now. Federal and.

Similar presentations

Presentation on theme: "Consumer Protection – 15.1 The Development of Consumer Protection Law –Caveat Emptor to Caveat Venditor, consumers have many more rights now. Federal and."— Presentation transcript:

1 Consumer Protection – 15.1 The Development of Consumer Protection Law –Caveat Emptor to Caveat Venditor, consumers have many more rights now. Federal and State Consumer Protection Law –Consumer protection laws apply to transactions between consumers and people conducting business. –A consumer is someone who buys products or services for personal use from a business. –State consumer protection offices provide information and help individual consumers as well as enforce state consumer protection laws. CT Dept. of Consumer ProtectionCT Dept. of Consumer Protection –Federal consumer protection law applies to business that sell goods or services in interstate commerce. (example 1) –Both the FTC and Bureau of Consumer Protection investigate violations of federal consumer protection law.

2 Unfair and Deceptive Practices –An act that misleads consumers. –Most states have enacted either the Uniform Deceptive Trade Act or their own version of similar laws. Fraudulent Misrepresentation – any statement that deceives the buyer. (example 2) Work-at-Home-Schemes – classified advertising fraud Unordered Merchandise – unordered merchandise may be considered a gift and you can keep it without paying anything. The only two things that can be legally sent without the consumer’s consent are: manufacturers’ free samples and merchandise mailed by charities. It is ILLEGAL for anyone who sends a free sample to include a bill with the gift.

3 False Advertising –FTC regulates false advertising on the national level and has the power to issue cease and desist orders. These are legally binding orders to stop a practice that would mislead the public. (example 3) Bait and Switch Advertising – a store advertises bargains that do not really exist to lure customers in hopes that they will buy more expensive merchandise. (example 4)

4 FTC Trade Regulation Rules –Negative Option Rules – CD clubs, book clubs, etc. If you do not act on an announcement for the current selection, you will be sent the product. If you do not want the product you must tell the seller not to send it. Seller’s obligations…see pg 322 –The Cooling-Off Rule – When you buy something at a location that is not the seller’s permanent business location you may be able to cancel the transaction. This applies to transactions of $25 or more at the buyer’s home, workplace, dorm, home product parties, fairgrounds, etc. The salesperson must inform you of your right to cancel and give you two copies of a cancellation form. You do not have to give a reason for cancelling.

5 FTC Trade Regulation Rules (continued) –Telemarketing Sales Rules – this rule protects you from abusive telemarketers. It is illegal for telemarketers to call if you have asked not to be called (Do Not Call Registry). Calling times are restricted, you must be informed of all costs associated with products and services as well as all restrictions. –900-Telephone-Number Rules – You must be informed of the cost of the call and be given a chance to hang up before being charged. Phone companies must block service to 900 numbers at your request. It is illegal to use any prefix other than 900 for pay-per-call services. Phone companies cannot disconnect your phone service to customers who refuse/dispute 900-number calls.

6 FTC Trade Regulation Rules (continued) –Shopping by Mail, Telephone, Fax, or Internet Sellers must ship goods within the time they promise in their catalog or advertisements. If no time is stated, they must ship goods within 30 days after receiving an order. You have the right to cancel orders and get your money back if time limits are not met. Sellers must notify you of any delay in shipment and give you a free postcard or other means of responding to the delay.

7 Product Liability - Under product liability law, someone who is injured from a product’s unsafe or defective condition may recover damages. Manufacturers, suppliers, and sellers of goods can all be held responsible. (example 5) –Strict Liability You do not need to prove a negligent act on the part of the manufacturer or seller if you are injured using a defective product. Strict liability makes manufacturers or suppliers responsible for selling goods that are unreasonably dangerous. This holds true even if the manufacturer or seller has not been negligent or if someone else purchased the product that caused your injury.

8 Product Liability (continued) –Strict Liability To recover damages you must prove all of the following: –Manufacturer or seller was engaged in the business of selling the product –The product was unreasonably dangerous to the user or consumer –The defective condition was the cause of the injury –The defective condition existed when the product left the hands of the manufacturer or seller –The consumer suffered physical harm or property damage as a result of using the product Inadequate warning of danger and improper instructions are also considered defects. (example 6)

9 Federal & State Consumer Protection Laws –Consumer Product Safety Act Protects you from unreasonable risk of injury while using consumer products that are sold in interstate commerce. Defects are divided into three categories: –Manufacturing defects –Poor design –Inadequate instructions and warnings Manufacturers must test for quality and reliability – they must also be able to prove the products were tested. Manufacturers must act quickly to address any valid complaints.

10 Federal & State Consumer Protection Laws (continued) –Food, Drug, and Cosmetic Act Prohibits the manufacture and shipment of faulty products in interstate commerce. A food or drug is said to be injurious if it contains any substance that may make it harmful to health. An adulterated food or drug is one that contains any substance that will reduce its quality or strength below minimum standards. A food or drug is misbranded if its labeling or packaging is false or misleading. Manufacturers must act quickly to address any valid complaints. Packaged drugs must have the name and address of the manufacturer as well as quantity Labels for nonprescription drugs must give the common name of the drug along with directions, caution statements, addictive statements…criminal penalties if manufacturers do not comply. On harmful products, FDA may impose high taxes, warning and packaging requirements, or prohibition –State and Local Laws If goods are manufactured and sold within one state, federal government has no control over the goods. The state would be responsible for regulating the product

11 Consumer Protection Assistance –State Offices of consumer affairs –Federal Consumer Product Safety Commission »1-800-638-CPSC –Nongovernmental Better Business Bureau (BBB) »Hears consumer complaints at local and state levels

Download ppt "Consumer Protection – 15.1 The Development of Consumer Protection Law –Caveat Emptor to Caveat Venditor, consumers have many more rights now. Federal and."

Similar presentations

Ads by Google