1. 45 - 1 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Consumer Protection

2. 45 - 2 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Consumer Protection Laws Government statutes and regulations that promote product safety and prohibit abusive, unfair, and deceptive practices.

3. 45 - 3 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Federal Food, Drug, and Cosmetic Act Provides the basis for the regulation of much of the testing, manufacture, distribution, and sale of foods, drugs, cosmetics, and medicinal products and devices in the United States. Administered by the Food and Drug Administration (FDA). The FDA is empowered to regulate food, food additives, drugs, cosmetics, and medicinal devices.

4. 45 - 4 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Food Labeling Nutrition Labeling and Education Act –Requires food manufacturers to place labels on foods that discloses nutritional information about the food. Number of calories Amount of fat Dietary fiber Cholesterol

5. 45 - 5 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Regulation of Drugs (continued) The law requires all users of prescription and nonprescription drugs to receive: –Proper directions for use –Including method and duration of use –Adequate warnings about any related side effects

6. 45 - 6 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Regulation of Cosmetics The FDA has issued regulations that require cosmetics: –To be labeled –To disclose ingredients –To contain warnings if they are carcinogenic or otherwise dangerous to a person’s health The manufacture, distribution, or sale of adulterated or misbranded cosmetics is prohibited. The FDA may remove from commerce cosmetics that contain unsubstantiated claims. –Preserving youth –Growing hair

7. 45 - 7 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Regulation of Medicinal Devices The Medicinal Device Amendment to the FDCA gives the FDA authority to regulate medicinal devices and equipment. The mislabeling of medicinal devices is prohibited. The FDA is empowered to remove “quack” devices from the market.

8. 45 - 8 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Consumer Product Safety Act Federal statute that regulates potentially dangerous consumer products. Created the Consumer Product Safety Commission (CPSC).

9. 45 - 9 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Consumer Product Safety Commission Independent federal regulatory agency empowered to: 1.Adopt rules and regulations to interpret and enforce the Consumer Product Safety Act. 2.Conduct research on safety. 3.Collect data regarding injuries.

10. 45 - 10 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Unfair and Deceptive Practices Prohibits unfair and deceptive practices including: –False and deceptive advertising –Bait and Switch

11. 45 - 11 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman False and Deceptive Advertising –Containing misinformation or omitting information that is likely to mislead a reasonable consumer, or –Makes an unsubstantiated claim. –Proof of actual deception not required.

12. 45 - 12 © 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Bait and Switch Seller advertises low-cost item to attract customers. Seller pressures buyers to upgrade. –Often refuses to show advertised merchandise. –Discourages employees from selling advertised merchandise. –Fails to have adequate quantities on hand.