Consumer Protection Government & Consumer Action

1. Consumer ProtectionGovernment & Consumer Action Chapter 15

2. Consumer Protection • Caveat Emptor: Let the buyer beware! The government will try to help out when they can. • Caveat Venditor: Let the seller beware! Seller can be sued by customer and fined by government.

3. Consumer Protection • Consumer Product Safety Commission: Problems must be reported by companies and hospitals. Consumers can also report issues. • FDA (Food & Drug Administration): Inspect cosmetics, foods, and drugs, and makes sure items are labeled correctly • FTC (Federal Trade Commission): Prevent false and misleading advertising

4. Bait and Switch • Advertisement that advertises something very cheap to get people to come into the store. When the people come in the product is miraculously sold out. So the store leads the buyer to a more expensive item.Not illegal if ad states how many are available or says supply is limited.Rain checks

5. Deceptive Service Estimates • Most states require businesses to provide consumers with written estimates before the work is performed • Problems occur when the actual price comes in much higher than the estimated price • More problems occur when the repair service charges the consumer for repairs that were not authorized • Most places must be properly licensed

6. Door to Door Solicitation • In a door to door solicitation they are required to let you know that you have 3 days to cancel contracts for purchases of $25 or more. • The law is also there to protect you from fraudulent misrepresentations

7. Other Unfair Trade Practices • Mislabled Goods – includes packaging • Similar brand name or trademark • “Under the counter” or “push money” • Unfair pricing – deals must be legitimate

8. Usury and ID Theft Laws • Usury: Lending out money at interest rates higher than the state allows • ID Theft: If you collect people’s info, you must store it safely

9. Class Action Law Suit • If lots of people are affected by someone or a business that broke the law they may all go together and file a class action law suit. • This helps because some things aren’t worth your time or money alone.

10. Liability • No liability if the injury was suffered while the product was used for a purpose for which it was not intended, the product has been altered, or improper maintenance. • Read “Hot Debate” on page 264 • Read “What’s Your Verdict” on page 272 • Read “Economic Impact” on page 274

11. Adjustment to the Statute of Frauds • According to the Statute of Frauds any sale over $500 must be in writing. • What if the sale occurs online where there is no paper/writing? • The UCITA (Uniform Computer Information Transactions Act) would hold that those transactions are valid as long as authentication is available • Also allowed for e-signatures

12. Implied Warranty • Unstated warranties that all contracts must have - they are implied • Warranty of Title: Unless otherwise agreed, each sales contract includes a warranty that the buyer will receive good title to the goods. • Warranty Against Encumbrances: No claims to the goods can be made by a third party. (Read “In This Case” on page 276) • Warranty of Fitness: You need the goods for a purpose and tell the seller, he then recommends a product.

13. Express Warranty • Express warranty means that the goods tendered by the seller must match the statements, descriptions, samples or models which were part of the “basis of bargaining” • Read “Requirements of Express Warranties” on page 274-275 – Full Warranty and Limited Warranty • Puffing: opinions that salesmen use “You’re gonna love this car; this Super Glide V-8 is the best car on the road; you can’t go wrong.”

14. Disclaimer: a notice of exclusion • Lemon Laws: exist at both state and federal levels – chronically defective vehicles (generally)

15. Read “Think Critically About Evidence” on page 279 # 6, 8, 9 • Read “Think Critically About Evidence” on page 281 #26, 27, 28