Chapter 30: Consumer Protection

1. Chapter 30: Consumer Protection

2. Who is Protected? • Consumer protection statutes originally were meant to protect persons of limited means and knowledge. • Now, a consumer may be defined as any person or entity that uses goods or services. • Some consumer protection statutes have been expanded to protect all consumers.

3. The Defendant The Consumer Legal Environment of the Consumer General Law Contract Tort Administrative Consumer Protection Law Advertising Seals of Approval Labeling Selling Methods The Consumer Contract Credit Cards Payments Defense Preservation Product Safety Credit, Collection, and Billing Methods Credit Standing and Reputation ProtectionReal Estate Sales Service Contracts Franchises

4. What is Prohibited? • Consumer protection laws focus on: • false and misleading advertising; • misleading or false use of seals of approval • misleading or false labels; and • some methods of selling, through: • requiring the disclosure of terms, • regulating telemarketing sales, • permitting consumer cancellation of home-solicited sales, and, • in some states, prohibiting referral sales

5. Consumer Remedies • When a consumer protection statute is violated, an action may sometimes be brought by the consumer against the wrongdoer. • More commonly, an action is brought by an administrative agency or by the state attorney general.

6. Consumer Protection Laws • Included in consumer protection laws: • Payments must be applied to the oldest debts first. • Consumers may not waive their right to defenses in a a contract. • Standards for product safety are set. • Discrimination in the issuance of credit and improper collection methods are outlawed. • Consumer has the right to privacy and protection from false information in credit reports.

7. Credit, Collection & Billing Methods

8. Types of Protections • The consumer is protected in a contract agreement by: • regulation of its form, • prohibition of unconscionable terms, and • limitation of the credit that can be extended to a consumer. • Credit card protections include: • prohibition of the unauthorized distribution of credit cards, • prohibition of surcharge for use of credit cards, • limited liability of the cardholder for the unauthorized use of a credit card.

9. Newer Consumer Protections • In some cases of real estate development sales, stricter standards of disclosure apply. • Some service contracts are treated like a consumer sale of goods. • Franchisors must give prospective franchisees a disclosure statement before contracting. • Lemon laws provide special protection to buyers of automobiles for personal, household, or family use.