1. Chapter 1 The Power of Consumers

2. Bell Ringer  What is a consumer?  Do you think teens are important consumers? Why?

3. Consumer  Someone who uses goods or services

4. Goods  Physical objects that are produced

5. Examples  Radios  Chocolate chip cookies  Magazines

6. Services  Actions that are performed for someone

7. Examples  Repairing a car  Serving a meal  Caring for a child

8. Your Economic Roles  Right now you are a student, classmate, and friend  Part of life concerned with earning, spending, and managing money

9. The three major economic roles:  Consumer- when you use goods and services  Worker-if you earn money at any job. They produce goods and services  Citizen- use public services such as schools and roadways

10. Marketplace  All of the goods and services available for sale to the general public.  When you choose to buy one product over another, your decision directly affects the marketplace…  How can consumers more consciously use this power?

11. Retailers  Those who sell goods and services directly to consumers  They strive to offer the right mix of products and to provide helpful service

12. Technology-Good  Learn about products at home  Read customer recommendations, compare prices, ask questions, and make purchases  Can allow you to make more informed decisions

13. Bad  Buying on impulse  How can you sort through all this information  How many options should you consider  How do you know when you have enough information

14. Characteristics of an Effective Consumer  Set goals- decide what they want and how they can best carry out a plan  Think critically- make decisions based on careful consideration of alternatives and their possible outcomes  Do their research-read observe and ask questions about the many options available to them

15. Characteristics of an Effective Consumer  Manage everyday finances- handle their income, expenses, taxes, banking and credit in a responsible way  Plan for financial security- savings, investing, and insurance. Use professionals for advice

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17. Bell Ringer  Should the government be allowed to step in and make laws that protect consumers? What type of laws should be enacted?

18. Consumer Advocates  People or organizations who work on behalf of consumers.

19. What do they do?  Work to investigate business practices, expose unfair or dangerous situations, and encourage the passage of laws protecting consumers.

20. The Consumer Movement  President John F. Kennedy in 1962 recognized the four basic rights of consumers Right to S_______ Right to be I______ Right to C_______ Right to be H_______ Right to Redress Right to Consumer Education Right to Service  Page 29

21. Redress  Remedy for a wrong or loss

22. Food, Drug, and Cosmetic Act  Federal Law  Ensures the purity, quality, and the labeling of food, drugs, and cosmetics

23. Federal Agencies  Created to watch over specific industries Enforces the laws set about  Set up rules and regulations to ensure that individual businesses comply with the laws and to prosecute those that do not

24. Federal Trade Commission (FTC)  Enforces laws against dishonest advertising

25. United States Department of Agriculture (USDA) Inspects and sets standards for meat, poultry, and canned fruits and vegetables Mad cow  Page 31

26. Consumer Groups  Organizations that are focused on consumer education, protection, and advocacy  Their interests and membership vary  Example: National Consumer League

27. Consumer Testing Agencies and Publications  Examples: Consumer Union- independent consumer testing agency that buy products from stores, test them, and report the results Consumer Reports.

28. Better Business Bureau  Helps the U.S.A. and Canada provide reliability reports on local businesses and allow consumers to file a complaint in the event of a problem.

29. Consumer Affairs Departments  Many businesses uses this to communicate with customers about their rights and needs as consumers (customer service department).  Toll free numbers

30. Consumer Action Panels  Companies in a particular industry such as health care form trade associations together to handle customer complaints

31. Media  Channels of mass communication Newspapers, magazines, radio, television, and websites  Help resolve consumer complaints because businesses want to avoid bad publicity

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33. Bell Ringer  How does someone go about stealing your identity?  How can you prevent this from happening?

34. Identity Theft  The illegal use of an individual’s personal information http://www.youtube.com/watch?v=kPg-vyBHgPs http://www.youtube.com/watch?v=KERwnA8VfFM

35. Social Security Number  The unique nine- digit number used by the S.S.A. to keep track of your earnings  Used to access bank and credit card accounts

36. Preventing Identity Theft  Handle mail with care- deposit outgoing in post office boxes or at the post office. Remove mail as soon as it is delivered.  Keep personal information in a safe place (locked drawer)  Online safety- use passwords with letters and numbers

37. Preventing Identity Theft  Don’t give out personal information over the phone, mail, email, or web unless you know it is safe  Secure site- uses safeguards to protect information from theft during transmission. Use a security measure on your computer  Cut up and shred any charge receipts, credit apps., bank statements, checks, and expired credit cards

38. If Your Identity is Stolen 1. File a report with the police 2. Call your bank and credit card companies. Close accounts that may be tampered with. 3. Call the 3 major credit reporting agencies (Equifax, Experian, and Trans Union. 4. Call the FTC http://www.youtube.com/watch?v=L08EIg0zsJ8 http://www.youtube.com/watch?v=7AHORRN5wC0

39. Online Profiling  A practice in which companies collect information about the Web sites a consumer visits, and then use that info to predict what the consumer may buy in the future

40. Cookies  Small files stored on your computer that allow a Web site to “remember” information about you.

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42. Bell Ringer  Explain a time when you or a friend was a victim of deceptive advertising or fraud.

43. Deceptive Advertising  Advertising that is likely to mislead consumers through false statements, omitted information, or other unfair means.  http://cbs2chicago.com/health/airborne.settle.suit.2.796263.html http://cbs2chicago.com/health/airborne.settle.suit.2.796263.html

44. Bait and Switch  If a retailer advertises a product that it has no intention of selling, hoping to persuade customers to buy another product at a higher price

45. False Promise of Free Gift  When a a store advertises a “free” gift, the gift must actually be free, with not strings attached.

46. Deceptive Pricing  Advertising a “sale” price that is actually no better than the product’s everyday prices is deceptive

47. Hidden Catches  Look out for extra charges, such as processing fees, and hidden restrictions, such as staying a certain place.

48. Fraud  Deceitful conduct designed to manipulate another person for some gain. It may take form as lying.

49. Pyramid Scheme  Common and illegal get-rich- quick plan.  Each person who participates pays a sum of money to join, then recruits several other people. Then in turn pay a fee and recruit others, and so on. Each person supposedly and eventually receive money from those that join later.

50. Chain Letter  Message sent by postal mail or emails that instructs the recipient to send copies to a certain number of other people.  Usually includes instructions to send money or items of value for more money or items later.  If you send one you are committing fraud.

51. Reporting Deception and Fraud  Report the fraud or deception at the FTC’s web site. You can also find more info there.

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53. Registering a Complaint 1. Must be able to state the problem clearly. Decide what sort of outcome you desire. 2. Gather receipts and product information. Know the store policies. 3. Contact the merchant 4. Write a letter of complaint

54. Writing a Letter of Complaint  Honest, polite and to the point.

55. The Parts of a Complaint Letter  Salutation- address your letter to the right person  Opening- identify the product, and problem clearly. Give as many details. Remember to enclose a copy of the receipt  Body- explain what you did do and what you would like done  Close- set a time for a resolution. Include your address, phone # and email

56. A COMPLAINT LETTER

57. Small Claims Court  Court of law in which disputes involving sums under a certain amount and are resolved by a judge

58. Class Action Suit  Lawsuit filed on behalf of a group of people who all have the same complaint