ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Bell Work ► Read consumer action at the front of the chapter page 87? © 2010 South-Western, Cengage Learning Slide 1

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 WHAT’S AHEAD 3.1Consumer Rights and Responsibilities 3.2Government and Consumer Protection 3.3Deception and Fraud 3.4Resolve Consumer Problems

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 LESSON 3.1 Consumer Rights and Responsibilities GOAL ► Describe each of your consumer rights and responsibilities. © 2010 South-Western, Cengage Learning Slide 3

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 KEY TERMS  competition  monopoly  redress © 2010 South-Western, Cengage Learning Slide 4

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 A Consumer Bill of Rights Pg 88 Right to... ► Safety ► Products should not endanger your life or health ► Be informed ► Producer must supply you with the right information ► Choose ► You have the right to choose among products ► Monopolies are illegal © 2010 South-Western, Cengage Learning Slide 5

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  Be heard  State your point of view to law makers  Redress- to seek and receive a remedy  Refund or other compensation

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 A Consumer Bill of Rights Pg 88  Consumer education  Sufficient information to make a rational buying decision  A healthy environment  The product is safe to produce in the environment and does not endanger life or health © 2010 South-Western, Cengage Learning Slide 7

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Rights Carry Responsibilities Responsibility to... ► Use products safely (Safety) ► Use information (Informed) ► Choose carefully (Choose) ► Express satisfaction or dissatisfaction (Be Heard) ► Seek redress (Redress) ► Be an educated consumer (Consumer Education) ► Contribute to a healthy environment (Healthy Env.) © 2010 South-Western, Cengage Learning Slide 8

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  As a consumer, what rights are you entitled to when dealing with businesses that sell goods and services? What responsibilities do you have in return? © 2010 South-Western, Cengage Learning Slide 9

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  As a consumer, what rights are you entitled to when dealing with businesses that sell goods and services? What responsibilities do you have in return? Businesses should respect consumers’ rights to safety, information, choice, being heard, redress, education, and a healthy environment Consumers have the responsibility to use products correctly and to inform businesses of any problems © 2010 South-Western, Cengage Learning Slide 10

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Bell Work ► Have you ever bought something that did not work as it was suppose to? What was it? Did it have a warranty? Were you able to return it? © 2010 South-Western, Cengage Learning Slide 11

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 LESSON 3.2 Government and Consumer Protection GOALS ► Describe the evolution of the consumer movement. ► Identify government agencies and laws that help protect consumers. ► Describe different types of products warranties and how they protect consumers. © 2010 South-Western, Cengage Learning Slide 12

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 KEY TERMS  consumer movement  Federal Trade Commission (FTC)  cease-and-desist order  Consumer Product Safety Commission (CPSC)  Environmental Protection Agency (EPA)  warranty  full warranty  limited warranty  implied warranty © 2010 South-Western, Cengage Learning Slide 13

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 The Rise of the Consumer Movement ► A growing concern ► Product were very simple (grain, wool) ► Complication of products grew ► A growing awareness ► 2 books published ► “Silent Spring”- talked about world without birds ► “Unsafe at Any Speed”-explained the dangers of the car ► Awoke consumers to a need to protect their interests © 2010 South-Western, Cengage Learning Slide 14

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 The Rise of the Consumer Movement ► The Consumer Movement (Consumerism) ► More complicated, more difficult to understand risks ► Consumer movement or Consumerism ► Seeks to protect and inform consumers by requiring such practices as honest advertising, product warranties, and improved safety standards ► Consumers had a desire to have government intervention © 2010 South-Western, Cengage Learning Slide 15

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Government Protection ► Federal Trade Commission ► Responsible for protecting consumers from unfair or deceptive business practices ► If company is using a deceptive advertising they issues a cease and desist order ► Consumer Product Safety Commission ► Protect consumers from dangerous products ► First agency with power over all consumer products © 2010 South-Western, Cengage Learning Slide 16

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  Environmental Protection Agency  Created to protect our environment  Ensures business dispose of waste properly  State and local protection  Health and sanitation standards  Better business bureau  Consumer movement today  Consumer Reports, local newspapers/tv stations

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Warranties ► The Magnuson-Moss Warranty Act ► Specifies how warranties must be carried out ► Full warranty- written guarantee of to replace a defective product in a certain amount of time ► Limited warranty- a written warranty that does not meet the standards of a full warranty because of specific limitations ► Implied warranties-an unwritten guarantee that the product is of sufficient quality to fulfill the purpose for which it was designed. © 2010 South-Western, Cengage Learning Slide 18

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  Why do many people feel that consumers need protection more now than in the past?  What federal agencies are charged with protecting consumers from false advertising, dangerous products, and pollution?  What differences are there between full and limited warranties? How do warranties benefit businesses that offer them? © 2010 South-Western, Cengage Learning Slide 19

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  Why do many people feel that consumers need protection more now than in the past? Today’s more complicated products make them more difficult to evaluate, leaving consumers vulnerable to poor-quality or even dangerous goods and services © 2010 South-Western, Cengage Learning Slide 20

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  What federal agencies are charged with protecting consumers from false advertising, dangerous products, and pollution? FTC protects consumers from unfair or deceptive business practices CPSC protects consumers from dangerous products EPA is responsible for protecting the environment © 2010 South-Western, Cengage Learning Slide 21

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  What differences are there between full and limited warranties? How do warranties benefit businesses that offer them? Full warranty: promises repair or replacement of defective product over a specific period of time at no cost to the customer Limited warranty: promises repair or replacement of defective product subject to stated limitations Businesses that offer warranties provide an incentive to customers to buy products with the stated protection © 2010 South-Western, Cengage Learning Slide 22

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Bell Work © 2010 South-Western, Cengage Learning Slide 23 Have your ever received and from someone offering you huge sums of money? How did it sound? Did you think something was “fishy”?

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 LESSON 3.3 Deception and Fraud GOALS ► Explain the meaning of deception and describe how consumers may be harmed by this practice. ► Identify common types of fraud and explain how consumers may protect themselves against it. © 2010 South-Western, Cengage Learning Slide 24

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 KEY TERMS  trading up  loss leader  fraud  bait and switch  pyramid scheme © 2010 South-Western, Cengage Learning Slide 25

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Deception ► Trading up ► Practice of pressuring consumers to buy a more expensive product that they intended to ► Sale price-when current price is below the regular price ► Suggested retail price ► Not always true price ► Usually negotiable ► Loss leader ► Sell below cost and take a loss of revenue ► Gets you in the store hoping you buy more © 2010 South-Western, Cengage Learning Slide 26

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Fraud ► Fraud: deliberate deception, designed to secure unfair or unlawful gain. ► A statement is fraudulent if it meets these two conditions: ► The person who made the statement must know it is false. ► The purpose of the statement must be to cause others to give up property that has value, such as money. © 2010 South-Western, Cengage Learning Slide 27

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Examples of Fraud ► Bait and switch ► Advertise something that is not available and have them buy another product ► Pyramid schemes ► Financial fraud in which people pay to join an organization in exchange for the right to sell memberships to others. ► Sells no legitimate product ► Internet and telephone fraud ► Open up to page 105 © 2010 South-Western, Cengage Learning Slide 28

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Internet and Telephone Fraud Watch out for... ► Deal offered seems too good to be true ► Credit card/Social Security number requested to verify identity ► Must buy item to get something else for free ► No written contract or sales agreement is provided ► You “must act now” or offer expires ► No method given to contact the organization ► Information about organization not available from independent sources © 2010 South-Western, Cengage Learning Slide 29

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 The Many Faces of Fraud Examples:  Healthcare products that promise to cure incurable diseases  Home-improvement contractors who want payment before doing any work  Vacation clubs that require money in advance with the promise of inexpensive first-class vacations later  Repair work offered for less than the going rate  Weight-loss programs that promise unrealistic results © 2010 South-Western, Cengage Learning Slide 30

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  What is the definition of a deceptive selling practice?  How can you protect yourself against fraudulent selling practices? © 2010 South-Western, Cengage Learning Slide 31

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  What is the definition of a deceptive selling practice? Deceptive selling practices are intended to mislead consumers Trading up, false sales, and inflated suggested retail prices can be deceptive © 2010 South-Western, Cengage Learning Slide 32

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  How can you protect yourself against fraudulent selling practices? Learn to be skeptical Check out unfamiliar companies and ask questions Carefully evaluate responses to questions Understand what you are buying and make decisions with your head rather than your emotions Use the decision making process © 2010 South-Western, Cengage Learning Slide 33

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Have you ever complained about a product or service? How did it go? Did you get anything in return.

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 LESSON 3.4 Resolve Consumer Problems GOALS ► Describe how to successfully complain about a product you purchased. ► Identify government programs that can help resolve consumer problems. © 2010 South-Western, Cengage Learning Slide 35

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 KEY TERMS  Better Business Bureau  arbitration  cooling-off period  small claims court © 2010 South-Western, Cengage Learning Slide 36

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Prepare to Make a Complaint Write down the facts ► The date and location of the transaction ► A description of the product ► The product’s price and your method of payment ► A specific explanation of what is wrong ► A statement of how you want the problem resolved ► Document, Document, Document © 2010 South-Western, Cengage Learning Slide 37

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 The Complaint Process ► Start with the seller ► Seek help from consumer organizations ► Better Business Bureau (BBB) ► Helps resolve disputes between sellers and customers ► Keeps and supplies information on complaints ► Educates consumers ► Promotes honest advertising and selling practices © 2010 South-Western, Cengage Learning Slide 38

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 The Complaint Process ► Arbitration ► Impartial third-party will hear both sides of a dispute and will make a decision ► Binding ► Unbinding ► Media help ► Action News ► Newspaper © 2010 South-Western, Cengage Learning Slide 39

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Government Efforts to Help Consumers ► Truth in information ► Enforcement is difficult ► Use common sense ► Cooling-off periods ► A specified period of time within which a consumer can back out of an agreement to buy something. ► Reporting consumer problems ► Using small claims court © 2010 South-Western, Cengage Learning Slide 40

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3 Government Efforts to Help Consumers ► Reporting consumer problems ► Attorney General ► Office of consumer affairs ► Using small claims court ► Do not need a lawyer ► Court costs are low, usually under $250 ► Most cases are resolved quickly © 2010 South-Western, Cengage Learning Slide 41

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  At which step of the complaint process is an organization such as the Better Business Bureau best able to help a consumer?  What are several ways in which the government works to protect consumers? © 2010 South-Western, Cengage Learning Slide 42

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  At which step of the complaint process is an organization such as the Better Business Bureau best able to help a consumer? At the fourth step of the complaint process, organizations such as the BBB are best able to help consumers when they are interacting with managers. © 2010 South-Western, Cengage Learning Slide 43

ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3  What are several ways in which the government works to protect consumers? The government protects consumers by... passing and enforcing laws setting standards licensing businesses requiring labeling providing a court system that consumers may use to protect themselves © 2010 South-Western, Cengage Learning Slide 44