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Understanding Consumer Protection Part I

Learn about consumer rights, government agencies, and key terms in consumer protection, including warranties and agencies like BBB, FDA, CPSC, and FTC.

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Understanding Consumer Protection Part I

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  1. Consumer ProtectionPart I in a three part series on Consumerism. Created by Cynthia Thomas and Dr. Frank Flanders

  2. Key Terms • Better Business Bureau • Food and Drug Administration • Consumer Product Safety Commission • Federal Trade Commission • Coercive Monopoly • Advertisement • Bureau of Consumer Protection • Warranty • Full Warranty • Limited Warranty • Implied Warranty of Merchantability • Implied Warranty of Fitness

  3. The 3 Aspects of Consumerism 1. Protection of Consumers’ Rights: The movement seeking to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards. 2. Belief in Benefits of Consumption: The theory that a progressively greater consumption of goods is economically beneficial. 3. Materialistic Attitude: Attachment to materialistic values or possessions.

  4. Consumer Protection The protection of the rights’ and interests of consumers, especially with regard to price, quality, and safety.

  5. Consumer protection covers a wide range of topics, including but not necessarily limited to product liability, privacy rights, unfair business practices, fraud, misrepresentation, and other consumer/business interactions.

  6. Government protection of consumer rights • There are several government agencies designed to protect different aspects of consumer rights.

  7. Better Business Bureau (BBB) • The BBB was founded in 1912. It is a corporation consisting of several private business franchises of local BBB organizations • The BBB goal is to foster a fair and effective marketplace, so that buyers and sellers can trust each other ("Start With Trust").

  8. BBB (continued) • BBBs gather and report information on business reliability, alert the public to frauds against consumers and businesses, provide information on ethical business practices, and act as mutually trusted intermediaries between consumers and businesses to resolve disputes. • News media frequently turn to the BBB as an expert source of news about scams and consumer issues.

  9. Food and Drug Administration (FDA) • An agency of the United States Department of Health and Human Services, created in 1918. • Responsible for protecting and promoting public health through the regulation and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs (medications),vaccines,  biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices (ERED), veterinary products, and cosmetics.

  10. Consumer Product Safety Commission (CPSC) • An independent US agency created in 1972 through the Consumer Product Safety Act to protect “against unreasonable risks of injuries associated with consumer products." • The CPSC is an independent agency that does not report to nor is part of any other department or agency in the federal government.

  11. Federal Trade Commission (FTC) • Established in 1914 by the Federal Trade Commission Act. • Its principal mission is the promotion of "consumer protection" and the elimination and prevention of what regulators perceive to be harmfully "anti-competitive" business practices, such as coercive monopoly. • Coercive Monopoly: business concern that prohibits competitors from entering the field, with the natural result being that the firm is able to make pricing and production decisions independent of competitive forces.

  12. FTC (continued) • Also protect consumers against false advertising, illegal sales schemes, and all unfair trade practices. • Advertising: a message to persuade consumers to buy something. • We can be confident in most of the things we buy because the FTC regulates advertising!

  13. Bureau of Consumer Protection • Part of the FTC, to protect consumers against unfair or deceptive acts or practices in commerce. • Have you ever heard of the US National Do Not Call Registry? This gives consumers the opportunity to limit the telemarketing calls they receive. • This registry is the responsibility of the Bureau of Consumer Protection.

  14. How else are you protected? • WARRANTY: This is a statement made by a manufacturer or seller of a product or service concerning the responsibility for quality, characteristics, and performance of the product or service. • FULL WARRANTY: Repair or replacement must be free, in a reasonable amount of time, without placing unreasonable demands on the consumer. • LIMITED WARRANTY: May require the consumer to pay labor fees or handling charges and may require the consumer to ship the product to the seller or an authorized service dealer for repairs. • IMPLIED WARRANTY OF MERCHANTABILITY: The product actually is what it is called and does what its name implies. • IMPLIED WARRANTY OF FITNESS: The product is fit for any performance or purpose promised by the seller and that there are no defects in the product at the point of sale.

  15. Warranties What type of warranties have you heard of? What products or services typically have warranties?

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