I. CONSUMER LAW

1. I. CONSUMER LAW 1. Consumer= one who buys goods and services from a seller 2. Contract = Legal agreement to pay for goods or services 3. Caveat emptor = “Let the buyer beware” a. In the old days consumers had no protections from unscrupulous sellers A. Influences on Consumers 4. Advertising= information provided by the seller regarding their products (can be useful, but also can be misleading) NEXT

6. B. How Laws Protect the Consumer 1. Federal laws a. Prohibit misleading ads, prices and labels b. Set standards for safety and quality c. Create agencies to enforce standards d. Create laws to regulate marketplace e. Protect those with disabilities 2. State laws a. Similar to federal laws b. Terms: class action= more than one plaintiff takes a defendant to court remedy= making up for harm done cease and desist order= court orders a company to stop an illegal practice restitution= having to repay money that was illegally obtained NEXT

10. C. Protecting Your Rights as a Consumer 1. What to do before buying a product a. Research products (Consumer Reports) b. Compare prices c. Consider a store’s reputation -service/delivery charges? d. Read the warranty e. Read the contract (if applicable) 2. What to do after buying a product a. Inspect the product (save receipts) b. Read the instructions c. If there’s a problem: -contact seller first (be polite but firm) -contact the manufacturer -contact a government agency NEXT

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16. 3. Consumer protection agencies a. Consumer groups b. Business and trade associations c. Media (publicity) d. Professional associations e. State and local government f. Federal government 4. Taking your case to court a. Criminal court fraud= salesmen who knowingly lie in order to make a sale b. Civil court damages= money won as a result of an injury or loss rescission and restitution= court orders contract cancelled and money refunded specific performance= the seller is forced to carry out the contract NEXT

19. Way advertisers “get” you Buy our product receive what you see Pop ups on the internet Puffing “World’s Best Fries” Fine print, fast talking

20. D. Deceptive Sales Practices 1. Door-to-door and telephone sales a. Be very wary to give your credit card number on the phone b. donotcall.gov – good for 5 years 2. Phony contest and referral sales • Advertising and the consumer a. Some ads are illegal (tobacco adson tv, radio.) b. Can be helpful/informative c. Ads must be truthful -except “puffing” (opinion statements) d. Bait and switch -luring customers into a store and then trying to sell them more expensive items

21. e. Mail order sales -companies must ship products quickly -read the contract carefully f. Repairs and estimates -always get a written estimate

22. E. CONTRACTS • Elements of a contract • a. Offer • b. Acceptance • c. Consideration= something of value must • be exchanged (usually money) 2. Minors and contracts a. Minors may enter contracts, but generally can’t be forced to carry them out -generally they must have a cosigner 3. Written and oral contracts a. Either type are legal -the law favors written contracts 4. Illegal contracts a. Contracts contrary to the law (drugs, etc.) b. Unconscionable contracts -contracts that are unfair NEXT

26. F. Warranties • Warranty= a guarantee from the seller as to the • quality of the product a. Breach= if the seller does not live up to the conditions of the warranty 2. Types of warranties a. Express warranty= statements of facts about a products performance b. Implied warranty= the law says that all products should do what they’re supposed to do -applies to stores/dealers only -only if product is used properly c. Disclaimer= a seller’s attempt to limit their responsibility -ie. “as is” or “with all faults” NEXT

29. G. Credit • Credit= buying things, promising to pay in • the future a. Creditors= those who lend money (banks, loan sharks, etc.) b. Debtors= those who borrow money c. Finance charge= money paid by debtors for the right to borrow money 2. Types of credit a. Unsecured credit= money borrowed with only the promise to repay (no collateral) b. Secured credit= debtor must provide collateral to obtain loan c. Default credit= if debtor does not make payments they lose their collateral (pawn shops) NEXT

33. 3. Credit cards and charge accounts a. Credit cards make it easy to borrow money to purchase items -APR= Annual Percentage Rate b. If you lose your card, just report it missing c. Debit cards= look/act like credit cards, but money comes directly out of ones bank account 4. When should you use credit? a. Using credit makes the item cost more, so use it sparingly (home, education, business and possibly car) b. If possible pay credit card bills in full each month NEXT

37. 5. The cost of credit a. Interest rates-very high on credit cards b. Loan sharking-very, very high interest rates c. Balloon payments= the last payment is much larger d. Acceleration clause= if one payment is missed the entire loan comes due immediately e. Bill consolidation= all bills are combined into one payment (often costs the consumer more than original loans) 6. Truth in lending a. Creditors must provide the debtor with accurate information -must be in writing NEXT

40. 7. What to do if you’re denied credit a. Ask the creditor why you were turned down b. Check your credit file H. Default and collection practices 1. Default= when a debtor can’t make his payments a. How to avoid default - put yourself on a budget - ask the creditor for more time - get financial counseling - get help from family or friends b. Bankruptcy -if you’re out of choices, declaring bankruptcy may be best option -it will be on your credit report for 10 years!! NEXT

43. Cars and the Consumer 1. Buying a new car- things to consider a. Safety (airbags, design strength, etc.) b. Price c. Quality d. Warranty e. Fuel economy 2. Buying a used car a. Always have a mechanic check it out b. Some used cars come with warranties 3. Financing a car a. Shop around for the lowest rates b. Read the contract carefully c. Consider the costs of owning a car -insurance, gas, repairs/maintenance, licenses, registration

46. Checking Accounts • 8 parts to an actual check 1. Number of check 2. Your name 3. Date of check 4. Payee’s name 5. Amount of check written in numerals 6. Amount of check written in words 7. Your signature 8. Number of your checking account

47. Two types of Checking Accounts Service Charge Free Checking You’re checking account is free if you stay above a minimum number of dollars in your account • No interest being charged to you but… • $.50 a month and $.10 each check written are charged to you

48. Mechanics of Checking Balance – amount in your account Deposit – putting money into your account Withdrawal – taking money out of account Canceled Checks – checks that people (the payees) have turned in in order to get cash

49. Mechanics of Checking cont Statement – bank’s sheet telling you how much is in your account, service charges, # and amount of checks written for that particular month, etc Checkbook- contains your checks and…. Check Register – an organized way to keep your balance right on the spot and compare your balance to your banks balance