Consumer Economics Copyright©2009 Taylor & Francis Group, an informa business Chapter 4 Consumer Protection and Law

Learning Objectives Identify the major consumer complaintsExplain consumer responsibilitiesDiscuss consumer service problemsList the steps to follow to complain effectivelyDescribe the steps to follow before buying Discuss how small claims courts work

Introduction The responsibilities of consumersInstances of fraudConsumer protection

Top Consumer Fraud Complaints 1.Identity theft (18 percent) 2.Debt Collection (10 percent) 3.Banks and lenders (6 percent) 4.Shop-at-home and catalog sales (6 percent) 5.Prizes, sweepstakes, and lotteries (5 percent) 6.Imposter Scams (4 percent) 7.Internet scams (4 percent) 8.Auto-related complaints (4 percent) 9.Telephone and mobile services (4 percent) 10.Credit cards (3 percent)

Consumer Responsibilities A consumers may be referred to as a client, patient, expert by experience, customer, or user Bottom Line: Use common sense, be aware of surroundings, business dealings, and potential victimization.

Customer Service Customer service includes the entire shopping experience Consumer complaints Corporate Reputation

Steps to Take Before Buying Gather information from many sources Find out about return and refund policies Get receipts in writing; keep credit card receipts Be suspicious of sales person tactics

Steps to Follow After Buying Consumer redress Ways to complain effectively The manufacturer Self-regulatory organizations Government consumer protection agencies Small claims courts or civil courts

Going to the Law Consumer law Licensing boards Warranties and guarantees Civil vs. criminal cases Contracts

Consumer Legal Terms Action – a judicial proceeding; a lawsuit contested in court Adversary proceeding - a legal procedure involving opposing parties, such as a plaintiff and a defendant Adversary system – a system with a trial where the truth will emerge (the system we are used to in the United States) Answer – the defendant’s written response to the plaintiff Breach of contract – the failure (without legal excuse) to fulfill any promise the is part of a contract

Chapter Summary Top ten consumer fraud complaintsConsumer responsibilitiesSteps to follow before and after buyingConsumer complaints