1. Prentice Hall © 20071 PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 5E, by Henry R. Cheeseman Chapter 24 Consumer Protection

2. Prentice Hall © 20072 Caveat Emptor The traditional guideline of sales transactions “Let the buyer beware.”

3. Prentice Hall © 20073 Food, Drug, and Cosmetic Safety The Food, Drug, and Cosmetic Act (FDCA) is administered by the Food and Drug Administration (FDA). FDCA provides a basis for the regulation of the testing, manufacture, distribution, and sale of foods, drugs, cosmetics, and medicinal products in the U.S.

4. Prentice Hall © 20074 Regulation of Food FDCA prohibits shipment, distribution, or sale of adulterated food. Labeling FDCA prohibits false and misleading labeling of food products. The Nutritional Labeling and Education Act requires disclosure of calories from fat, amount of dietary fiber, and other substances.

5. Prentice Hall © 20075 Regulation of Drugs and Medicinal Devices The FDA has authority to regulate the testing, manufacture, distribution, and sale of drugs. The FDA has power to license new drugs in the U.S. The FDA has authority to regulate medicinal devices such as pacemakers and diagnostic devices.

6. Prentice Hall © 20076 Regulation of Cosmetics Cosmetics include substances for cleansing, altering the appearance of, and promoting the attractiveness of a person. FDA requires cosmetics to be labeled, disclose ingredients, and contain warnings if they are dangerous to health.

7. Prentice Hall © 20077 Product Safety The Consumer Product Safety Act created the Consumer Product Safety Commission (CPSC). CPSC regulates potentially dangerous consumer products. CPSC can require a manufacturer to recall a product or take other corrective action.

8. Prentice Hall © 20078 Unfair and Deceptive Practices Prohibited by Section 5 of the Federal Trade Commission (FTC) Act Unfair and deceptive practices include: False and deceptive advertising Bait and switch Door-to-door sales – state laws may require a cancellation period for the consumer to rescind the sale.

9. Prentice Hall © 20079 Do-Not-Call Registry The FCC and the FTC enacted administrative rules that created the “Do- Not-Call” Registry. Telemarketers have 3 months from the time of phone number registration to remove the registered phone number from their call lists.

10. Prentice Hall © 200710 Debtor Protection Law Truth in Lending Act (TILA) Requires creditors to make disclosures to debtors in consumer transactions. Consumer Leasing Act Extends the requirements of TILA to consumer leases. Fair Credit and Charge Card Disclosure Act Requires direct written solicitation to display annual percentage rate, membership fee, finance charges, and other information.

11. Prentice Hall © 200711 Debtor Protection Law Equal Credit Opportunity Act Prohibits discrimination based on race, color, national origin, religion, age, or receipt of public assistance. Fair Credit Reporting Act Sets guidelines for consumer reporting agencies. Fair Debt Collection Practices Act Protects consumers from abusive, deceptive, and unfair practices by debt collectors.