pp. 384-397

1. Chapter 24 Protecting Consumers pp. 384-397

2. Learning Objectives After completing this chapter, you’ll be able to: • Describe what consumers can do when they have problems with products. • Identify groups and individuals that act as consumer advocates. continued

3. Learning Objectives After completing this chapter, you’ll be able to: • Explain how government protects consumers. • Name ways in which businesses help and inform consumers.

4. Why It’s Important As a consumer, you’re empowered by the establishment of resources and organizations.

5. Key Words refund small claims court consumer advocates consumer reporter grade labels recall continued

6. Key Words legal monopolies licenses Better Business Bureau (BBB)

7. Your Power as a Consumer Every time you buy a good or service, you send a message to the company that you like its product. You and other consumers are responsible for the company’s success or failure.

8. Figure 24.1 CONSUMERS’ CHOICES REQUIRE CAUTION Make exercising more than a New Year’s resolution. Before joining a health club, carefully consider your options. How is this information useful to the consumer?

9. Customer Satisfaction When you return a defective product, the store will usually give you a refund (return the cost of a product to you), fix the item, or replace it.

10. Legal Action Small claims court settles cases involving relatively small amounts of money. In most states, a consumer can go to small claims court with little cost and without a lawyer.

11. Legal Action In small claims court, the size of claims varies from state to state but can be as low as $25 or as high as $5,000.

12. Fast Review • If you return a faulty product to a store, what are the three things the store might do to satisfy you? • What is the range of claims in small claims court?

13. Consumer Organizations Groups and individuals that work to protect, inform, and defend consumers are called consumer advocates.

14. Consumer Federation of America The Consumer Federation of America (CFA) works to promote laws that help consumers.

15. Consumer Federation of America The CFA’s six major areas are: • Financial services • Utilities • Product safety continued

16. Consumer Federation of America • Transportation • Health care • Food safety

17. National Consumers League The National Consumers League provides government, businesses, and other agencies with the consumer’s point of view.

18. National Consumers League One of the National Consumers League’s services is a national fraud information center. It also monitors the Internet to prevent consumer fraud.

19. Consumers Union Consumers Union is the nonprofit publisher of the magazine ConsumerReports.

20. Consumers Union Consumers Union tests products in its laboratories and reports the findings in its magazine. The magazine doesn’t advertise products or allow its findings to be used in advertisements.

21. Major Appliance Consumer Action Program The Major Appliance Consumer Action Program (MACAP) helps consumers solve problems with large appliances such as washers, stoves, and freezers.

22. Radio and Television Local radio and TV stations often have a consumer reporter, who reports on issues important to consumers, such as product safety, testing, and shopping.

23. Fast Review • What is Consumer Reports’ policy about advertising? • If you have problems with a new stove or washer, what organization can help you?

24. Government Organizations Many federal, state, and local governments provide consumer information. They also pass laws to protect consumers.

25. Federal Agencies The Consumer Information Center in Pueblo, Colorado is a good source for publications from government agencies.

26. Federal Agencies The Federal Trade Commission (FTC) enforces laws about business practices.

27. Federal Agencies The U.S. Department of Agriculture (USDA) inspects foods such as meat and gives them grade labels that indicate the level of quality.

28. Federal Agencies The Food and Drug Administration (FDA) tests and approves all drugs before they can be offered to consumers.

29. Federal Agencies The National Highway Traffic Safety Administration can order automakers to recall, or take back and repair or replace cars with defective parts.

30. Figure 24.2 THE IMPORTANCE OF LABELS Labels provide information to consumers. If you were buying a pair of gloves, what are three types of information on the label you would find helpful?

31. State Agencies Each state has a consumer affairs division. In some states, the attorney general’s office handles consumer affairs.

32. State Agencies States have laws about credit card interest rates, health care businesses, banking and mortgage rates, and other consumer services.

33. Public Utilities Public utilities are legal monopolies, or companies that are allowed to operate without competition.

34. Public Utilities A state public utilities commission regulates the rates charged by electric, gas, and water companies. In some areas, they also regulate local telephone services.

35. Public Utilities If a utility plans a rate increase, the commission usually holds a public meeting where consumers and consumer groups can speak out.

36. Licenses To prevent people from practicing occupations they’re not qualified to do, states issue licenses, or legal permits to conduct business.

37. Licenses Doctors, teachers, roofers, hair stylists, architects, and even professional wrestlers are required to have a license.

38. Licenses When you hire someone to provide a special service, you should first check to see if that person has a license.

39. Graphic Organizer Graphic Organizer How the Government Protects Consumers Inform Consumers Require Licenses Regulate Business FEDERAL AND STATE GOVERNMENTS Test Drugs Enforce Laws Inspect Food

40. Fast Review • What does the U.S. Department of Agriculture do to protect consumers? continued

41. Fast Review • How does a state public utilities commission protect consumers? • What are some occupations that require a license?

42. Customer Service Representatives When you buy a product, the package often lists the address, telephone number, or Web site for a customer relations representative.

43. Customer Service Representatives A company might also provide you with consumer booklets about its products at little or no cost.

44. Customer Service Representatives Some companies have specialists to help you select the best product for your needs.

45. Business Building Blocks Customer Service Have you ever wanted to buy something in a store and the salesperson wasn’t around? Or maybe you have worked as a salesperson and had to deal with cranky customers. continued

46. Business Building Blocks Customer Service For a business to succeed, everyone involved needs to be treated with respect. continued

47. Business Building Blocks Tips for Good Customer Service • Pay attention to what’s happening around you. • Look for clues. How are people interacting? continued

48. Business Building Blocks Tips for Good Customer Service • When someone is acting inappropriately, ask yourself what might be motivating such behavior. • Keep lines of communication open. • Everyone deserves respect.

49. The Better Business Bureau The Better Business Bureau(BBB) is a nonprofit organization that collects information on local businesses and handles complaints.

50. The Better Business Bureau The BBB doesn’t enforce laws and it won’t recommend one local business over another.