CONSUMER PROTECTION LAWS Apply to transactions between consumers and businesses. Consumer protection laws do not protect you when you purchase products from another consumer, i.e. a used car

Agencies and Tips The Federal Trade Commission (FTC) is the governmental agency that promotes free trade and fair competition. The Bureau of Consumer Protection safeguards consumers against unfair and deceptive practices. The Consumer Protection Unit of the Attorney General’s Office deals with investigates and prosecutes violations of Vermont’s consumer laws, which prohibits businesses from engaging in unfair or deceptive acts or practices.

“If something sounds too good to be true, it probably is” "If it sounds too good to be true, it usually is” was a catchphrase used by the Better Business Bureau to alert the public to shady business practices. The phrase has been used since at least 1954. The first half of the phrase varies with “If it sounds too good to be true” or “If it looks too good to be true” or “If it seems to good to be true.” The second half of the phrase varies with “it usually is” or “it probably is” or simply “it is.” The phrase “too good to be true” was applied in 2008 to Bernard Madoff, who was accused of running a $50 billion Ponzi scheme. Members of the investment community concluded that Madoff’s “too good to be true” investment returns should have raised red flags. (A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money. A Ponzi scheme entices new investors by offering higher returns than other investments.)

WHAT ARE THE CONSEQUENCES A BUSINESS MIGHT SUFFER IF IT ENGAGES IN UNETHICAL OR DECEPTIVE PRACTICES?

CONSEQUENCES ►Compromised brand or image ►Tarnished reputation ►Loss of business ►Failed consumer confidence ►Lawsuits

“Red Bull Gives You Wings!” Energy drinks company Red Bull was sued in 2014 for its slogan "Red Bull gives you wings.“ The tagline, used for 20 years, went alongside marketing claims that the caffeinated drink could improve a consumer's concentration and reaction speed. Beganin Caraethers was one of several consumers who brought the case against the Austrian drinks company. He said he was a regular consumer of Red Bull for 10 years, but that he had not developed "wings," or shown any signs of improved intellectual or physical abilities. Red Bull settled the lawsuit to avoid the cost and distraction of litigation. Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability. Red Bull released this statement following a class action lawsuit, by agreeing to pay out a maximum of $13 million (including $10 to every US consumer who had bought the drink since 2002.

CONSUMER PROTECTION LAWS Protects consumer against unfair, unsafe, or deceptive selling practices. Have you, your parents or a friend ever purchased a product that was unsafe or if the product they were promised was not delivered?

Homework Due – Thursday, 5/11/17 Bring in a product from your home – be able to demonstrate and answer the following statements about the product: Demo your product Point out the claim or special made on the label Is there a phone # or web address to call with questions, comments, or complaints? Take a closer look at the designs and labeling that are on your product package. Why are these important? Is there a warranty or expiration date on the product? Did these advertising claims influence your buying habits (or that of your parents? Are there any unusual comments or labels on the product? Does the product contain everything advertised?