Chapter 15 Consumer Protection 11/8/2018 Chapter 15 Consumer Protection 15-1 Protection through Governmental Action 15-2 Protection through Action by the Consumer Chapter 15 LAW

15-1 Protection through Governmental Action GOALS Explain the need for governmental involvement in the marketplace Identify protections against substandard goods Recognize unfair trade practices Chapter 15

GOVERNMENTAL PROTECTION IN TODAY’S MARKETPLACE Chapter 15 11/8/2018 GOVERNMENTAL PROTECTION IN TODAY’S MARKETPLACE Consumer caveats Class actions Governmental procedure Chapter 15 LAW

Define the terms caveat emptor and caveat venditor. Chapter 15

PROTECTION AGAINST INFERIOR SERVICES AND GOODS Licensing Unsafe products Adulterated food, drugs, and cosmetics Improper weights and measures Chapter 15

What commission sets safety standards for most consumer products? Chapter 15

PROTECTION AGAINST UNFAIR TRADE PRACTICES Agreements to control or fix prices False and misleading advertising Illegal lotteries and confidence games Unfair pricing and service Mislabeled goods Other unfair trade practices Chapter 15

List at least six forms of unfair trade practices. Chapter 15

15-2 Protection through Action by the Consumer GOALS Describe the protection afforded consumers by the law of product liability Identify the various warranties that may apply to a sales transaction Chapter 15

WHAT IS PRODUCT LIABILITY? Expansion of product liability Privity of contract Recovering damages Chapter 15

Under what product liability approach is a person injured by a defective product most likely to recover damages? Chapter 15

HOW IMPORTANT ARE WARRANTIES? Requirements of express warranties Opinions v. warranties Express warranties made by all sellers Implied warranties given by all sellers Warranty of title Warranty against encumbrances Warranty of fitness for a particular purpose Continued on the next slide Chapter 15

HOW IMPORTANT ARE WARRANTIES? Implied warranties given only by merchants Warranty against infringement Warranty of merchantability Exclusion of warranties Lemon laws Chapter 15

Distinguish express and implied warranties. Chapter 15

PREVENT LEGAL DIFFICULTIES For your protection as a consumer . . . Be wary of Internet or phone solicitations that offer deals that seem too good to be true. They are often just that. Such offers often involve real estate or precious metals. Fraudulent offers of free gifts and travel also are common. Be cautious of “bargains.” Usually they are authentic, but occasionally they are a part of a bait-and-switch scheme or they are loss leaders surrounded by overpriced goods. Continued on the next slide Chapter 15

PREVENT LEGAL DIFFICULTIES Do not gamble. Remember that even in free and honest gambling contests, the vast majority of participants receive nothing. When you have a valid complaint about a fraudulent or unfair business practice, take action. Complain to the business involved, the Better Business Bureau, the local prosecutor, the state attorney general, the FTC, the CPSC, and any other governmental body with jurisdiction. If all else fails, consider taking legal action. Continued on the next slide Chapter 15

PREVENT LEGAL DIFFICULTIES Try to stay informed about product defects. Watch the stores where you shop for recall announcements. Pay special attention to recall notices you receive in the mail. When in doubt about a product, consult the CPSC. Sign up to receive notices about banned products. Be aware that not every assurance of quality or performance made by a seller is a warranty. Continued on the next slide Chapter 15

PREVENT LEGAL DIFFICULTIES Know the implied warranties for goods you buy and watch for sellers’ statements of limitation. Make certain that any express warranty you receive is in writing to avoid later disputes as to its meaning or existence. Use special care in buying goods “as is.” Inspect the goods to be sure that you are willing to take them without the benefit of warranties. Chapter 15