1. Consumer Rights and Responsibilities
Chapters 3.1 and 3.4

2. Safety Right to safety Responsibility to use products safely
Products must not endanger consumers’ lives or health
Responsibility to use products safely
Consumers are responsible for following directions for proper use and maintenance of products

3. Information Right to be informed Responsibility to use information
Business must provide accurate information in advertising, labeling, and sales practices.
Responsibility to use information
Consumers are responsible for using the information to evaluate product choices.

4. Choice Right to Choose Responsibility to choose carefully
Consumers should have a variety of goods and services from which to choose.
Responsibility to choose carefully
Consumers should take advantage of product variety by considering many opinions and making rational choices.

5. Heard
Right to be heard
The government must consider consumer interests when creating laws.
Responsibility to express satisfaction or dissatisfaction
Consumers should tell their elected officials their opinions on consumer issues, and inform them of improper business practices.

6. Redress Right to redress Responsibility to seek redress
Consumers should be able to obtain fair remedies to consumer problems.
Responsibility to seek redress
Consumers should inform businesses of product defects and unfair practices and pursue remedies.

7. Consumer Education Right to consumer education
Sufficient information should be available for consumers to make rational decisions.
Responsibility to be an educated consumer
Consumers should take advantage of opportunities to gather information and learn how to make rational buying decisions.

8. Healthy Environment Right to a healthy environment
Businesses should avoid polluting the environment and should contribute to the welfare of the community in which they operate.
Responsibility to contribute to a healthy environment
Consumers should support businesses that operate responsibly and report environmental abuses to authorities.

9. Why?
Consumer movement
Seeks to protect and inform consumers of requiring such practices as honest advertising, product warranties, and improved safety standards.

10. Who can help? Federal Trade Commission (FTC)
Most important federal consumer protection agency
Responsible for protecting consumers from unfair or deceptive business practices such as misleading information in advertising or on product labels
Cease-and-desist order – stops deceptive advertising

11. Who else? Consumer Product Safety Commission (CPSC)
Protects consumers from dangerous products.
Environmental Protection Agency (EPA)
State and local governments

12. Warranties
Company’s promise that the product will meet specific standards over a given time period or the company will repair or replace it, or give a refund

13. Warranties Magnuson-Moss Warranty Act
Full warranty – VERY specific, written guarantee
Limited warranty – limitations explained in detail

14. Implied vs. Expressed Implied warranty *Express warranty
unwritten guarantee
*Express warranty
statement which presents a specific quality of performance feature of a product

15. Misc.
Consumer’s Union tests products and reports on the results in Consumer Reports.
Underwriter’s Laboratories checks products for safety from fire, electric shock, and other hazards.
State’s attorney’s office handles frauds and misleading ad claims

16. Deception and Fraud
Section 3.3

17. Deception vs. Fraud Deception Fraud Exaggeration Legal Misleading
Deliberate
Unlawful extremes

18. Deception
Trading Up – practice of pressuring consumers to buy a more expensive product than they intended
Sale Price – must be below usual price
Suggested Retail Price – manufacturers price is sometime higher then what the retailer expects to get from it.
Loss Leader – below cost to attract you to the store

19. Fraud Statement is fraudulent if: Proving fraud is difficult
Person making statement KNOWS it’s false
Purpose of statement causes others to give up some value
Proving fraud is difficult
Was it a mistake?
Was there intent?
Best advice is to avoid fraud

20. When it seems too good to be true…

21. …it probably is!!

22. Types of Fraud Bait and Switch Pyramid Schemes
Chain letters
Memberships, not products
Telephone (& Internet) Fraud

23. Pyramid Schemes

24. Telephone Fraud Too good to be true Request for credit card or ss#
Buy for something free
Refusal to send written confirmation or information
Pressure to act now or offer expires
Refusal to identify themselves or company
Refusal to provide company info (phone, address)

25. Telephone Techniques Drop famous names
“Having lunch with Michael Jordan was great…”
Use terms of endearment, emotions
“I lost my mother and you remind me of her.”
Suggest lack of power
“May I talk to the decision maker?”
Use guilt trips
“I’ve already spent an hour with you…”
Pressure to make quick decisions
“We only have two left…”

26. Telephone Advice Ask for time to think about it
Ask for information be sent to you
Ask for their number and call back
Ask for referrals

27. More Faces of Fraud Health-care products that cure
Home improvement charging fees up front
Vacation clubs promising cheap vacations
REALLY inexpensive repair work
Weight loss programs appearing unrealistic

28. Protect Yourself Be skeptical! Ask questions! Research companies
Research products
Use your head, not your “heart”

29. Resolve Consumer Problems
Section 3.4

30. Complaint process Have your facts straight Be rational, not emotional
Documentation
Receipts, warranties
Dates/locations/names
Product details
Price and payment method
Explanation of problem
Desired resolution
Be rational, not emotional
Document names, dates, and conversations

31. Consumer group/agency
Who to talk to?
Customer service rep
Manager
Manufacturer
Consumer group/agency
Lawsuit

32. Consumer Organizations
Better Business Bureau
Helps resolve disputes
Keeps files of complaints
Educates consumers
Promotes honest advertising/selling
Arbitration – consumer board
Media help

33. Cooling-off Periods Allows time to back out of a deal
Generally three days
FTC created for door-to-door sales

34. Other options Report incident to state’s attorney Small claim courts
Price range ($1- to 10,000)
No lawyer needed or allowed
Court fees low
Quick resolution