1. CHAPTER 3 CONSUMER PROTECTION Rights, Responsibilities, Resolutions
Economic Education for Consumers
4/21/2017
CHAPTER 3 CONSUMER PROTECTION Rights, Responsibilities, Resolutions
WHAT’S AHEAD
3.1 Consumer Rights and Responsibilities
3.2 Government and Consumer Protection
3.3 Deception and Fraud
3.4 Resolve Consumer Problems
CHAPTER 3

2. LESSON 3.1 Consumer Rights and Responsibilities
GOAL
Describe each of your consumer rights and responsibilities.
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3. KEY TERMS competition monopoly redress
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4. KEY TERMS
competition – a contest among sellers to win customers. Competition helps keep prices reasonable.
monopoly – a situation in which there is only one company that sells a specific product or service.
redress – a right to seek and receive a remedy, such as a refund or other compensation.

5. A Consumer Bill of Rights
Right to . . .
Safety
Be Informed
Choose
Be Heard
Redress
Consumer education
A Healthy environment
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6. Rights Carry Responsibilities
Responsibility to . . .
Use products safely
Use information
Choose carefully
Express satisfaction or dissatisfaction
Seek redress
Be an educated consumer
Contribute to a healthy environment
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7. Checkpoint 3.1
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?
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8. Checkpoint 3.1 answer
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
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9. 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.
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10. 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
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11. KEY TERMS
consumer movement – seeks to protect and inform consumers by requiring such practices as _________ advertising, product ___________ and improved _________ standards.
Federal Trade Commission (FTC) – the most important federal ___________ _____________ agency.
cease-and-desist order – Issued by the ______, this order requires a company to stop using a ___________ advertisement.
Consumer Product Safety Commission (CPSC) – Agency created to protect consumers from _____________ products.

12. KEY TERMS
warranty - a company’s promise that a product will meet specific ___________ over a given time period or the company will repair/replace or give a ________ .
full warranty – a written _____________ the promises the company will repair/replace a defective product within a specified time period at no charge.
limited warranty – a written warranty that does not meet the standards of a full warranty because of specified _____________.
implied warranty – an unwritten guarantee that the product is of ____________ ____________ to fulfill the purpose for which it was designed.

13. The Rise of the Consumer Movement
A growing concern
A growing awareness
The consumer movement
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14. Government Protection
Federal Trade Commission
Consumer Product Safety Commission
Environmental Protection Agency
State and local protection
Consumer movement today
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15. Warranties The Magnuson-Moss Warranty Act Implied warranties
Full warranty
Limited warranty
Implied warranties
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16. Checkpoint 3.2
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?
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17. Checkpoint 3.2 answers
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
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18. Checkpoint 3.2 answers
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
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19. Checkpoint 3.2 answers
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
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20. 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.
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21. KEY TERMS trading up loss leader fraud bait and switch pyramid scheme
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22. KEY TERMS
trading up – The practice of pressuring consumers to buy a ______ ____________ product than they had intended.
loss leader – An item priced ______ ______ to attract you to the store.
Fraud - ___________ deception designed to secure unfair or unlawful gain.
bait and switch – The practice of “baiting” consumers with an advertised but nonexistent bargain and then “switching” them to a more expensive product.
pyramid scheme – a type of financial _______ in which people pay to join an organization in exchange for the right to sell memberships to others.

23. Deception
Trading up
Sale price – A sale is only a sale if the price is below the regular price. Sale prices can be deceptive.
Suggested retail price – They are sometimes higher than any retailer expects to actually get for the product.
Loss leader
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24. 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.
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25. Examples of Fraud Bait and switch Pyramid schemes
Internet and telephone fraud – advantageous to con-artists because you can’t see them. Are they legitimate?
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26. 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
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27. 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
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28. Checkpoint 3.3 What is the definition of a deceptive selling practice?
How can you protect yourself against fraudulent selling practices?
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29. Checkpoint 3.3 answers
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
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30. Checkpoint 3.3 answers
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
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31. 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.
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32. KEY TERMS Better Business Bureau arbitration cooling-off period
small claims court
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33. 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
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34. The Complaint Process Start with the seller
Seek help from consumer organizations
Better Business Bureau (BBB)
Arbitration
Media help
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35. Government Efforts to Help Consumers
Truth in information
Enforcement is difficult
Use common sense
Cooling-off periods
Reporting consumer problems
Using small claims court
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36. Checkpoint 3.4
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?
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37. Checkpoint 3.4 answers
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.
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38. Checkpoint 3.4 answers
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
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