Chapter 3 Combined

8/12/2019 Chapter 3 Combined

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Consumer Rights and

ResponsibilitiesChapters 3.1 and 3.4


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Safety

Right to safety

Products must not endanger consumers lives

or health

Responsibility to use products safely

Consumers are responsible for followingdirections for proper use and maintenance of

products


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Information

Right to be informed

Business must provide accurate information inadvertising, labeling, and sales practices.

Responsibility to use information

Consumers are responsible for using theinformation to evaluate product choices.


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Heard

Right to be heard

The government must consider consumerinterests when creating laws.

Responsibility to express satisfaction ordissatisfaction

Consumers should tell their elected officials

their opinions on consumer issues, and informthem of improper business practices.


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Redress

Right to redress

Consumers should be able to obtain fairremedies to consumer problems.

Responsibility to seek redress

Consumers should inform businesses ofproduct defects and unfair practices and

pursue remedies.


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Consumer Education

Right to consumer education

Sufficient information should be available for

consumers to make rational decisions.

Responsibility to be an educated

consumer

Consumers should take advantage of

opportunities to gather information and learnhow to make rational buying decisions.


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Healthy nvironment Right to a healthy environment

Businesses should avoid polluting theenvironment and should contribute to the

welfare of the community in which theyoperate.

Responsibility to contribute to a healthyenvironment Consumers should support businesses that

operate responsibly and report environmentalabuses to authorities.


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Why?

Consumer movement

Seeks to protect and inform consumers ofrequiring such practices as honest

advertising, product warranties, and improvedsafety standards.


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Who can help?

Federal Trade Commission (FTC)

Most important federal consumer protectionagency

Responsible for protecting consumers fromunfair or deceptive business practices such asmisleading information in advertising or on

product labels Cease-and-desist orderstops deceptive

advertising


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Who else?

Consumer Product Safety Commission(CPSC)

Protects consumers from dangerous

products.

Environmental Protection Agency (EPA)

State and local governments


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Warranties

Companys promise that the product will

meet specific standards over a given timeperiod or the company will repair or

replace it, or give a refund


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Warranties

Magnuson-Moss Warranty Act

Full warrantyVERY specific, writtenguarantee

Limited warrantylimitations explained in

detail


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Implied vs. Expressed

Implied warranty

unwritten guarantee

*Express warranty

statement which presents a specific quality ofperformance feature of a product


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Misc.

Consumers Uniontests products andreports on the results in ConsumerReports.

Underwriters Laboratorieschecksproducts for safety from fire, electricshock, and other hazards.

States attorneysoffice handles fraudsand misleading ad claims


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Deception and Fraud

Section 3.3


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Deception vs. Fraud

Deception

Exaggeration

Legal

Misleading

Fraud

Deliberate

Unlawful extremes


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Deception

Trading Uppractice of pressuringconsumers to buy a more expensiveproduct than they intended

Sale Pricemust be below usual price Suggested Retail Pricemanufacturers

price is sometime higher then what the

retailer expects to get from it. Loss Leaderbelow cost to attract you to

the store


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Fraud

Statement is fraudulent if:

Person making statement KNOWS its false

Purpose of statement causes others to give

up some value

Proving fraud is difficult

Was it a mistake?

Was there intent?

Best advice is to avoid fraud


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When it seems too

good to be true


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it probably is!!


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Types of Fraud

Bait and Switch

Pyramid Schemes

Chain letters

Memberships, not products

Telephone (& Internet) Fraud


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Pyramid Schemes


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Telephone Fraud

Too good to be true

Request for creditcard or ss#

Buy for somethingfree

Refusal to send

written confirmation orinformation

Pressure to act nowor offer expires

Refusal to identify

themselves orcompany

Refusal to providecompany info (phone,address)


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Telephone Advice

Ask for time to think about it

Ask for information be sent to you

Ask for their number and call backAsk for referrals


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More Faces of Fraud

Health-care products that cure

Home improvement charging fees up front

Vacation clubs promising cheap vacations REALLY inexpensive repair work

Weight loss programs appearing unrealistic


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Protect Yourself

Be skeptical!

Ask questions!

Research companies Research products

Use your head, not your heart


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Resolve Consumer

ProblemsSection 3.4


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Complaint process

Have your facts straight

Documentation

Receipts, warranties

Dates/locations/names

Product details

Price and payment method

Explanation of problem

Desired resolution

Be rational, not emotional

Document names, dates, and conversations


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Who to talk to?

Customer service rep

Manager

Manufacturer

Consumer group/agency

Lawsuit


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Consumer Organizations

Better Business Bureau

Helps resolve disputes

Keeps files of complaints

Educates consumers

Promotes honest advertising/selling

Arbitrationconsumer board

Media help


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Cooling-off Periods

Allows time to back out of a deal

Generally three days

FTC created for door-to-door sales


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Other options

Report incident to states attorney

Small claim courts

Price range ($1- to 10,000)

No lawyer needed or allowed

Court fees low

Quick resolution

Chapter 3 Combined

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