Consumer Rights and Responsibilities

1. Consumer Rights and Responsibilities Chapters 3.1 and 3.4

2. Safety • Right to safety • Products must not endanger consumers’ lives or health • Responsibility to use products safely • Consumers are responsible for following directions for proper use and maintenance of products

3. Information • Right to be informed • Business must provide accurate information in advertising, labeling, and sales practices. • Responsibility to use information • Consumers are responsible for using the information to evaluate product choices.

4. Choice • Right to Choose • Consumers should have a variety of goods and services from which to choose. • Responsibility to choose carefully • Consumers should take advantage of product variety by considering many opinions and making rational choices.

5. Heard • Right to be heard • The government must consider consumer interests when creating laws. • Responsibility to express satisfaction or dissatisfaction • Consumers should tell their elected officials their opinions on consumer issues, and inform them of improper business practices.

6. Redress • Right to redress • Consumers should be able to obtain fair remedies to consumer problems. • Responsibility to seek redress • Consumers should inform businesses of product defects and unfair practices and pursue remedies.

7. 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 learn how to make rational buying decisions.

8. Healthy Environment • Right to a healthy environment • Businesses should avoid polluting the environment and should contribute to the welfare of the community in which they operate. • Responsibility to contribute to a healthy environment • Consumers should support businesses that operate responsibly and report environmental abuses to authorities.

9. Why? • Consumer movement • Seeks to protect and inform consumers of requiring such practices as honest advertising, product warranties, and improved safety standards.

10. Who can help? • Federal Trade Commission (FTC) • Most important federal consumer protection agency • Responsible for protecting consumers from unfair or deceptive business practices such as misleading information in advertising or on product labels • Cease-and-desist order – stops deceptive advertising

11. Who else? • Consumer Product Safety Commission (CPSC) • Protects consumers from dangerous products. • Environmental Protection Agency (EPA) • State and local governments

12. Warranties • Company’s promise that the product will meet specific standards over a given time period or the company will repair or replace it, or give a refund

13. Warranties • Magnuson-Moss Warranty Act • Full warranty – VERY specific, written guarantee • Limited warranty – limitations explained in detail

14. Implied vs. Expressed • Implied warranty • unwritten guarantee • *Express warranty • statement which presents a specific quality of performance feature of a product

15. Misc. • Consumer’s Union tests products and reports on the results in Consumer Reports. • Underwriter’s Laboratories checks products for safety from fire, electric shock, and other hazards. • State’s attorney’s office handles frauds and misleading ad claims

16. Deception and Fraud Section 3.3

17. Deception vs. Fraud • Deception • Exaggeration • Legal • Misleading • Fraud • Deliberate • Unlawful extremes

18. Deception • Trading Up – practice of pressuring consumers to buy a more expensive product than they intended • Sale Price – must be below usual price • Suggested Retail Price – manufacturers price is sometime higher then what the retailer expects to get from it. • Loss Leader – below cost to attract you to the store

19. Fraud • Statement is fraudulent if: • Person making statement KNOWS it’s 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

20. When it seems too good to be true…

21. …it probably is!!

22. Types of Fraud • Bait and Switch • Pyramid Schemes • Chain letters • Memberships, not products • Telephone (& Internet) Fraud

23. Pyramid Schemes

24. Too good to be true Request for credit card or ss# Buy for something free Refusal to send written confirmation or information Pressure to act now or offer expires Refusal to identify themselves or company Refusal to provide company info (phone, address) Telephone Fraud

25. Telephone Techniques • Drop famous names “Having lunch with Michael Jordan was great…” • Use terms of endearment, emotions “I lost my mother and you remind me of her.” • Suggest lack of power “May I talk to the decision maker?” • Use guilt trips “I’ve already spent an hour with you…” • Pressure to make quick decisions “We only have two left…”

26. Telephone Advice • Ask for time to think about it • Ask for information be sent to you • Ask for their number and call back • Ask for referrals

27. 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

28. Protect Yourself • Be skeptical! • Ask questions! • Research companies • Research products • Use your head, not your “heart”

29. Resolve Consumer Problems Section 3.4

30. 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

31. Who to talk to? Customer service rep Manager Manufacturer Consumer group/agency Lawsuit

32. Consumer Organizations • Better Business Bureau • Helps resolve disputes • Keeps files of complaints • Educates consumers • Promotes honest advertising/selling • Arbitration – consumer board • Media help

33. Cooling-off Periods • Allows time to back out of a deal • Generally three days • FTC created for door-to-door sales

34. Other options • Report incident to state’s attorney • Small claim courts • Price range ($1- to 10,000) • No lawyer needed or allowed • Court fees low • Quick resolution