DO NOW: ANSWER THE QUESTIONS ON YOUR DO NOW HANDOUT BASED ON YOUR KNOWLEDGE OF THE LAW A IM : H OW ARE CONSUMERS PROTECTED IN THE MARKETPLACE ?

W OULD YOU EAT THIS ?! Why did Kraft recall 6.5 million boxes of Macaroni and Cheese? What would you do if you were a customer and ate one of the affected boxes of Mac and Cheese? What are some future implications for Kraft due to this situation?

W HAT IS A CONSUMER ? Consumer  Individual who acquires goods that are intended primarily for personal, family, or household use.  A consumer is protected in the marketplace through actions that they take on their own as well as actions that the government takes to ensure this protection. Caveat Emptor  “Let the buyer beware” Caveat Venditor  “Let the seller beware”

C ONSUMER A CTIONS Class Actions  Allows one or several persons to sue not only on behalf of themselves, but also on behalf of many others similarly wronged.

G OVERNMENTAL A CTIONS (R EACTIVE ) Cease- and- Desist Order  An order issued by a governmental agency requiring a company to stop a specified conduct subject to civil penalties if violated Consent Order  A voluntary, court-enforceable agreement to stop an illegal or questionable practice Restitution  The return to customers of money wrongfully obtained Recall (Voluntary by Company or Government Issued)  When a product is removed from the market or a correction is made to the product because it is either defective or potentially harmful

G OVERNMENT P ROTECTION (P ROACTIVE ) Licensing  Licensing and inspections of certain businesses are required in order to protect customers.  i.e. doctors, teachers, lawyers, hospitals, nursing homes Unsafe Products  Consumer Product Safety Act: This act created the Consumer Product Safety Commission which has authority to issue and enforce safety standards for most consumer products

P ROTECTION AGAINST INFERIOR GOODS AND SERVICES Adulterated Food, Drugs and Cosmetics  FDA (Food and Drug Administration)  Requires that the production facilities for food, drugs and cosmetics be clean  Requires that the products be prepared from ingredients fit for human use or consumption  Regulates and approves drugs  Requires labels on all products  Adulterated: a product that does not meet the minimum standards for purity and quality

USDA (U.S. Dept. of Agriculture) Improper Weights and Measures Inspects processors of meat and poultry entering interstate commerce Make sure meat is free of disease and that conditions are sanitary Most states must inspect and test weighing and measuring devices at least once a year P ROTECTION AGAINST INFERIOR GOODS AND SERVICES

L ET ’ S R EVIEW … Name and explain 2 actions a consumer can take if they feel there rights were violated in the marketplace. Name and explain 2 steps the Federal Government has taken in order to protect consumers from inferior goods.

W HAT IS YOUR VERDICT ? Eliza had just purchased a classic sports car but did not like the color. He saw a newspaper advertisement for “car painting, $99.99 complete.” He went to the place of business, contracted for the service, and selected a dark blue metallic finish. However, when the paint job was completed and Eliza examined the car, the color was obviously light blue. Eliza complained, but the manager claimed the color was close enough to the color selected and refused to make any correction.  How can Eliza resolve the problem in his favor?