1. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Years ago, caveat emptor, which means “let the buyer beware,” reflected society’s attitude toward consumers. The Development of Consumer Protection Law

2. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability There were few ways to seek compensation for damages and those injured had no recourse due to privity of contract. The Development of Consumer Protection Law

3. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Today, however, society demands that manufacturers be held responsible for foreseeable injuries to people who use their products. The Development of Consumer Protection Law

4. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Caveat venditor, which means “let the seller beware,” now guides consumer transactions. The Development of Consumer Protection Law

5. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal and State Consumer Protection Laws Consumer protection laws apply to transactions between consumers and people conducting business.

6. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal and State Consumer Protection Laws A consumer is someone who buys or leases goods, real estate, or services for personal, family, or household purposes.

7. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal and State Consumer Protection Laws Consumer protection laws do not protect you if: you acquire a product from another consumer you buy a product to use in a business

8. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability State Consumer Protection State consumer protection offices provide information and help enforce state consumer protection laws. Offices may assist consumers with individual problems.

9. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal Consumer Protection Federal consumer protection law applies to businesses that sell real estate, goods, or services in interstate commerce, or business activity that touches more than one state.

10. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal Consumer Protection The Federal Trade Commission (FTC) is the U.S. government agency that promotes free and fair trade competition in the American economy. The Bureau of Consumer Protection safeguards consumers against unfair, deceptive, or fraudulent practices.

11. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Federal Consumer Protection Both organizations investigate violations of federal consumer protection law.

12. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Unfair and Deceptive Practices An unfair and deceptive practice is an act that misleads consumers. Most states have enacted some kind of unfair and deceptive trade practice law.

13. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Unfair and Deceptive Practices Examples include: work-at-home schemes unordered merchandise false advertising

14. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Unfair and Deceptive Practices If you feel you are the victim of an unfair or deceptive practice: Speak to the business owner or manager about the problem Write a complaint letter to the company.

15. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Elements of a Complaint Letter description of purchase product name and serial and model number or service statement and history of problem ask for specific action, state reasonable time for action

16. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Elements of a Complaint Letter copies of documents your address and work and home phone numbers

17. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Fraudulent Misrepresentation A fraudulent misrepresentation is any statement that deceives the buyer. A fraudulent misrepresentation usually occurs when a seller misstates the facts about something that is important to the consumer.

18. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Work-at-Home Schemes Home employment schemes are among the oldest kind of advertising fraud. They often promise big incomes without explaining the costs.

19. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Unordered Merchandise Under state and federal laws, unordered merchandise may be considered a gift, You can keep it without paying for it. It is illegal for anyone who sends free samples to include a bill.

20. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability False Advertising The FTC regulates false advertising on the national level and has the power to issue cease and desist orders. These orders are legally binding orders to stop a practice that would mislead the public.

21. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Bait and Switch One example of false advertising is bait and switch advertising. This happens when a store advertises bargains that do not really exist to lure customers in hopes that they will buy more expensive merchandise.

22. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability FTC Trade Regulation Rules The FTC has established trade regulation rules for interstate commerce to correct wrongdoing in the marketplace.

23. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability FTC Trade Regulation Rules They include: the negative option rule the cooling-off rule the telemarketing sales rule 900-telephone-number rules rules for shopping by mail, telephone, fax or Internet

24. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Negative Option Rule When you subscribe to a magazine or CD club or other plan that sends products regularly, the negative option rule applies. Under such plans, the seller sends you announcements describing the current selection.

25. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Negative Option Rule If you want the selection, you do nothing; the seller will ship it automatically. If you do not want it, you must tell the seller not to send it, and there is a deadline for notification.

26. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability The Cooling-Off Rule The cooling-off rule gives you three days to cancel contracts for most purchases made away from the seller’s regular place of business.

27. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability The Cooling-Off Rule The rule applies to purchases of $25 or more made at the buyer’s home, workplace, or dormitory. It does not apply to contracts for real estate, insurance, securities, or emergency home repairs.

28. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Telemarketing Sales Rule The Telemarketing Sales Rule protects you from abusive telemarketers, the people who try to sell you products by telephone.

29. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability 900-Telephone-Number Rules Unlike 800 telephone numbers, if you dial a 900-area-code telephone number, you are charged for the call. Sometimes consumers are charged excessively for 900-number calls.

30. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Protect Yourself Against 900-Number Scams Deal only with reputable companies. Think twice before calling a 900 number for a “free gift.”

31. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Protect Yourself Against 900-Number Scams Know precisely what the 900 call will cost—before you make the call. Don’t confuse 900 numbers with toll-free 800 numbers.

32. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Shopping by Mail, Telephone, Fax, or Internet The FTC has established rules to protect you when ordering goods by mail, telephone, fax, and the Internet.

33. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Shopping by Mail, Telephone, Fax, or Internet Sellers must ship goods within the time they promise in the advertising. If shipping time is not stated, they must ship within 30 days after receiving an order.

34. Understanding Business and Personal Law Consumer Protection Section 15.1 Consumer Protection and Product Liability Shopping by Mail, Telephone, Fax, or Internet You have the right to cancel and get your money back if time limits are not met. Sellers must notify you of any delay in shipment.