1. Issues in Trustworthiness
Business Ethics

2. Trustworthiness Trustworthiness requires: Honesty Integrity
Promise-keeping
Loyalty

3. Trustworthiness There are two types of honesty: In communication
In conduct

4. Trustworthiness
Honesty in Communication
Truthfulness
Sincerity
Candor

5. Trustworthiness
Truthfulness

6. Trustworthiness
Sincerity

7. Trustworthiness
Candor

8. Trustworthiness Deceptive Advertising Ambiguous Ads Concealed Facts
Exaggerations
Psychological Manipulations
Bait and Switch Ads

9. Ambiguous Ads
Sara Lee released a new line of products called Light Classic desserts. The natural implication was that "light" meant fewer calories. However, Sara Lee admitted that light referred to the texture and not the calories.

10. Ambiguous Ads
Often advertisers use "weasel" words that are used to evade or retreat from a direct claim.
Some commonly used weasel words are: "helps," (helps stop), "up to" (provides relief up to eight hours), "as much as" (saves as much as one gallon of gas).

11. Ambiguous Ads
A consumer need not actually be confused or misled if the ad is found to have the capacity to mislead or deceive. Literally true claims and photographs can be deceptive if the surrounding representations and circumstances make them deceptive.

12. Ambiguous Ads
Advertisers have an obligation to provide clear information in order to fulfill. their obligations under the requirements of trustworthiness.

13. Concealed Facts
Tylenol advertised that hospitals dispensed ten times as much Tylenol as the next four brands conbined. They did'n say that the sold the products to hospitals at a cost substantially below what consumers pay.

14. Concealed Facts
Campbell soup ads depicted a think, rich soup. However, marbles were placed in the bowl to give the solid appearance.

15. Concealed Facts
When consumers are deprived of comprehensive information about a product, their choices are limited and distorted.
Concealing facts misleads people and undermines truth.

16. Concealed Facts
Under the obligation of trustworthiness, businesses have an obligation to provide clear, accurate, and adequate information.
Consumers should have access to the objective pros and cons of each product.

17. Exaggerations
Nabisco advertises its 100-percent bran cereal as being "flavored with two naturally sweet fruit juices" when there are the least significant ingredients.

18. Exaggerations
Much advertising relies on "puffery," the use of harmless superlatives such as "best," "finest", or "most.“
In determining the difference between puffery and deception, one must look at the intent of the advertiser and the likely interpretation of the ad made by the consumers.

19. Psychological Manipulations
Ads that appeal to subtle implications and psychological nuances appeal to our subconscious mind.
They appeal to power, prestige, sex, masculinity, femininity, acceptance, and approval.

20. Psychological Manipulations
It shows a lack of respect to act upon another without that person’s knowledge or consent.

21. Bait and Switch Ads Bait and Switch involves:
an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell.
Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser.

22. Standards of Deceptive Advertising
Two standards have been put forth:
The reasonable-person standard
The ignorant-consumer standard

23. Deceptive Ads The reasonable-person standard states that:
the law is obligated only to protect reasonable, intelligent consumers
who conduct themselves reasonably in the marketplace.

24. Deceptive Ads
The ignorant-consumer standard protects consumers who are careless or gullible in their purchases.

25. Trustworthiness Accounting manipulations may use:
Misrepresenting revenues
Misrepresenting costs

26. Trustworthiness Honesty in action is fraud.
Fraud not only seeks to deceive but to take advantage of those who are not cheating.
It is a violation of both trust and fairness.

27. Trustworthiness Fraud in common law involves:
the existence of a false representation of a material fact
the person making the claim knows the falsity of the claim
the claim is made for the purpose of another to act

28. Trustworthiness Fraud involves:
the person intends to obtain an advantage, avoid an obligation or cause loss to another
the person defrauded relied upon the representation as true and acted upon it to his detriment

29. Trustworthiness Types of fraud include: deception bribery forgery
extortion
corruption

30. Trustworthiness Types of Fraud include: theft conspiracy embezzlement
misappropriation
false representation
concealment of material facts and collusion

31. Trustworthiness
example

32. Trustworthiness
Integrity requires one to stick to one’s principles under hardships.

33. Trustworthiness
Promise-keeping requires one to make reasonable efforts to fulfill one’s commitments.

34. Promise-Keeping Avoid bad-faith excuses.
Interpret your promises fairly and honestly.
Don’t try to rationalize noncompliance.

35. Promise-Keeping Avoid unwise commitments.
Before making a promise consider carefully whether you are willing and likely to keep it.
Think about unknown or future events that could make it difficult, undesirable or impossible.

36. Promise-Keeping Avoid unclear commitments.
Be sure that, when you make a promise, the other person understands what you are committing to do.

37. Trustworthiness
Loyalty is a responsibility to promote the interests of certain people, organizations or affiliations.
The duty of confidentiality requires us to keep some information confidential.
Conflicts of interest should be avoided.

38. Bankruptcy
There are two types of bankruptcy:
Chapter 13
Chapter 7

39. Bankruptcy
A Chapter 13 bankruptcy gives you the chance to reduce the amount you pay on debts.
It allows you to keep property that you otherwise might not be able to afford to keep
It protects you from your creditors.

40. Bankruptcy
In Chapter 7 bankruptcy, most debts are wiped out and you never have to pay them.
The law allows certain property to be exempt.

42. Bankruptcy Most bankruptcies result from medical emergencies job loss
divorce

43. Bankruptcy
According to Bush, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 will:
“will protect those who legitimately need help, stop those who try to commit fraud and bring greater stability and fairness to our financial system.”

44. Fairness
The financial services industry argued that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.

45. Fairness
Those who fought the bill’s passage said the change will fall especially hard on low-income working people, single mothers, minorities and the elderly and will remove a safety net for those who have lost their jobs or face crushing medical bills.

46. New Law
Those with insufficient assets or income could still file a Chapter 7 bankruptcy.
A judge must approve the plan.
If it is approved, all debts are entirely erased after certain assets are forfeited.

47. New Law
Limitations on “exemptions barring creditors from going after a debtor’s home” were established.
Filers must submit to a two-point “means test” to determine whether they qualify for Chapter 7 liquidation.

48. New Law
Those who fail can then apply for Chapter 13 to establish a debt repayment plan over the course of three to five years.
Filing fees and legal expenses will be significant.
Each debtor will be required to pay the cost of a mandatory “credit counseling” course.

49. New Law
Those whose income is above their state’s median income who can pay at least $6,000 over five years — $100 a month — would be forced into Chapter 13
A judge would then order a repayment plan.

50. New Law
A debtor's reasonable monthly expenses will be subtracted from estimated monthly income.
If the remainder, known as discretionary income, is below $100 a month, the debtor can file for Chapter 7.
If not, the debtor might not be allowed to file for Chapter 7.

51. New Law
If a consumer's disposable income is between $100 and $166 a month and
If his or her credit card debt is $24,000 or less,
the debtor can't file under Chapter 7 and must instead file under Chapter 13.

52. New Law Amendments rejected
special homestead exemptions for the elderly
Exemptions for those with significant medical expenses for illness that force them to file for bankruptcy
Would have allowed them to keep $150,000 of the equity in their primary residence
If medical bills exceeded 25 % of the person's income, the person would have been exempt from the new means test

53. New Law
Between 30,000 and 210,000 people - from 3.5 percent to 20 percent of those who dissolve their debts in bankruptcy each year - would be disqualified from doing so under the legislation, according to the American Bankruptcy Institute.

54. New Law
About 70 percent of the people who file for bankruptcy now do so under Chapter 7, while the other 30 percent or so fall under Chapter 13, according to the American Bankruptcy Institute.

55. New Law
Currently, 70 percent of the people who file Chapter 13 bankruptcy are unable to complete their original repayment plan

56. New Law This has been called the Deflation Guarantee Act of 2005.
This supposed "consumer protection act" the most anti-consumer act in the entire history of Congress.

57. New Law The new law may discourage entrepreneurs from taking risks.
Fewer companies starting up equals fewer jobs to fill, which has potentially catastrophic consequences for the entire U.S. economy

58. New Law It does not cap interest rates cap fees
make allowances for loss of jobs, medical expenses or anything else

59. New Law
The Senate rejected a measure to cap credit-card interest rates at 30 percent.

60. New Law
If ever there were a case for needed reform, it would be in usury laws that might restrain the insane growth in credit.

61. New Law The Millionaire’s Loophole: asset protection trusts
since 1997, lawmakers in five states - Alaska, Delaware, Nevada, Rhode Island and Utah - have passed legislation exempting assets held domestically in such trusts from the federal bankruptcy code.

62. Bankruptcy
The legislation does not address the real problems of the debt society:
declining real wages
job insecurity
long-term unemployment
rising health care costs

63. New Law
The new law will siphon more money away from these families and put it into the deep pockets of the credit card industry
The credit card companies made profits of $30 billion, much of it from increasing penalty fees and sky-high interest charges.