Consumer Rights & Responsibilities Senior Advisory May/June, 2013 Information created from “Managing Your Personal Finances” by Joan Ryan.

Why? You are going to begin to make larger purchases and should be educated. You need to protect your credit as you begin to establish it. You are an adult and should know as much about being a consumer as you possibly can.

What to Watch Out For Bait & Switch Illegal sales technique where the seller advertises a product with the intention of persuading consumers to buy a more expensive product. Fake Sales Most common consumer fraud. Makes the tag look like a reduction when there actually is none.

What to Watch Our For, Cont. Low-balling Advertising a service at an unusually low price to lure customers – then persuading them they need additional services. Pyramid Schemes Mostly illegal multilevel marketing plans usually based on commission. Internet Fraud Fake web sites can be designed to look just like real counterpart. Always be careful on the web!

What to Watch Our For, Cont. Pigeon Drop Any method used to convince people to invest in phony investments, swampland or other schemes. Fraudulent Representation Telephone or door to door solicitations by people who claim to sell reputable products or represent charities.

What to Watch Our For, Cont. Health & Medical Product Fraud “miracle” pills, creams and devices Infomercials The product might be reputable, there is no guarantee and claims about results may be greatly exaggerated. Usually go after your emotions – weight loss, hair growth, etc. Telemarketing Fraud Unsolicited calls asking for money

Activity Does anyone have a specific example of one of the types of fraud mentioned on the previous slides? Please share with the group.

Warning Signs of Fraud You can get something for nothing. You will receive a free gift if you reply now. You or your home has been specially selected. You can make high earnings with no experience or little effort. You have been selected to complete an advertising questionnaire. You may attend a demonstration with no obligation to buy.

Warning Signs of Fraud If you don’t decide now, you will lose a golden opportunity. You may buy a high-quality product for an incredibly low price. To receive a product or service, you must first send money. To receive your prize, you must supply your credit card or checking account number.

Activity Share time again Has one of this things happened to you or a family member? Please share with group. Other people’s experiences can help someone else in the future.

How to be a Responsible Consumer Shop at several stores (comparative shopping). Be aware of prices. Understand sale terminology. Clearance – merchant wants to clear out specific merchandise Liquidation – merchant wants to sell all items Avoid impulse buying. Plan your purchases.

How to be a Responsible Consumer Compute unit prices. Read labels. Check containers carefully. Read contracts. Keep receipts and warranties. Compute total cost (batteries, shipping, finance charges, etc)

How to be a Responsible Consumer, Cont. Ask for references. Be loyal (and ask for recommendations from friends). Check up on business (check licenses, Better Business Bureau). Wait a day for major purchases.

Consumer Bill of Rights Law was proposed by President John F Kennedy in 1962 and later expanded by Presidents Nixon and Ford. It outlines the following: The Right to Safety: protection against products that are hazardous to life or health. The Right to Be Informed: protection against fraudulent, deceitful or grossly misleading practices and assurance of receiving facts necessary to make informed choices.

Consumer Bill of Rights Other rights: The Right to Choose: access to a variety of quality products and services offered at competitive prices. The Right to Be Heard: assurance of representation of consumer interests in formulating government policy and of fair and prompt treatment in enforcement of laws. The Right to Redress: assurance that buyers have ways to register their dissatisfaction and receive compensation for valid complaints. The Right to Consumer Education: assurance that consumers have the necessary assistance to plan and use their resources to maximum potential.

Who is there to help out? USDA (US Department of Agriculture) inspects and grades food. FDA (Food & Drug Administration) approves new drugs, tests products for safety and sets labeling guidelines. CPSC (Consumer Product Safety Commission) enforces product standards and bans or recalls hazardous products. FCC (Federal Communications Commission) regulates communications by radio, TV, wire, satellite and cable.

Who is there to help out? FTC (Federal Trade Commission) regulates methods of competition, marketing practices, and credit reporting. USPIS (US Postal Inspection Service) investigates consumer problems pertaining to illegal use of the mail. SEC (Securities & Exchange Commission) requires businesses to disclose financial information and oversees the securities markets. Private organizations, such as BBB (Better Business Bureau) can assist consumers with incidents of unethical and illegal practices.

Identity Theft Skilled thieves can rob your identity despite your best efforts. Types of Identity Theft Stolen ID cards, debit cards and credit cards Stolen mail from mailbox or garbage Thieves posing as landlord or employee can get a copy of your credit report & then open accounts

Whom might you contact? If you had trouble with your mail and what was being left in your mailbox? If you had concerns about a new prescription your doctor was discussing with you? You saw a meat counter processing food in a questionable manner.

Identity Theft – Things to Minimize Risk Don’t give out personal information unless you have initiated the contact and know with whom you are dealing. Memorize your Social Security number and don’t carry your Social Security card. Pay attention to billing cycles; follow up when bills don’t arrive when they should (might have been taken). Minimize the number of accounts you have and cards you carry.

Identity Theft – Things to Minimize Risk Guard your mail from theft. Use post office drop boxes for outgoing mail; promptly remove mail when it arrives or get a post office box. Keep personal information safe; shred discarded copies. Order a copy of your credit report every year; be sure it is accurate.

Identity Theft – If it happens to you Place a fraud alert on your credit reports. A fraud alert will prevent anyone from opening any more accounts in your name. Close the accounts you know have been tampered with or opened without your permission. Ask for a letter verifying that the disputed account is closed and the charges are being disputed and/or discharged. When you open new accounts, change your PIN and/or password immediately.

Identity Theft – If it happens to you File a complaint with the Federal Trade Commission. Their complaint form is available online; print a copy and keep it for your records. This record, together with a police report, will entitle you to certain protections, such as ensuring that debts will not reappear on your credit report. File a report with your local police. Call the police department and ask to fill out a police report for identity theft. File in person if possible and obtain a copy. If local police are reluctant to take your report, call the state attorney general’s office to find the appropriate place to file a police report.

Identity Theft – If it happens to you More information can be found: IDTHEFT

Discussion In the early 2000’s, the FDA lifted its ban on pharmaceutical companies and allowed them to advertise directly to consumers. Since then, targeted ads have appeared on television and drug sales have soared. Do you think it was a good idea to lift the ban? Why or why not? How has technology changed the way we view consumer rights and protection?