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Consumer Protection. St. Cloud Times 11/18/10. Should we ban alcoholic drinks that also contain caffeine?. Lead and phthalate free products. Consumer Health and Safety. The Federal Food, Drug and Cosmetic Act FDA Safe and effective medical devices Consumer Product Safety Act - PowerPoint PPT Presentation
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Consumer Consumer ProtectionProtection
Should we ban alcoholic drinks that also contain caffeine
What about not selling cigarettes to people under age 21 – current St. Cloud proposal?
Chapter Objectives
1. Summarize the major consumer protection laws.
2. Explain how the government protects consumers who are involved in credit transactions.
3. List and describe the major statutes that protect consumer health and safety.
Reebok to pay $25 million for EasyTone and RunTone Shoes Sept 2011• 28% more strength and tone in buttock muscles•11% more strength and tone in hamstring muscles•11% more strength and tone in calf musclesThan regular walking shoes.
False Advertising
Deceptive Advertising. Generally, an advertising claim will be deemed deceptive if it would mislead a reasonable consumer.
– Puffery– Appear to be based in Fact -- but is not
Bait-and-Switch – Refuses to show item– Fails to have a reasonable stock of item
FTC. Federal Trade Commission (FTC) Actions Against Deceptive Advertising
– Cease-and-Desist Order– Couteradvertising– Multiple Product Orders
Case 20.1 – FTC v. QTIonized Bracelet• Miraculous cure for chronic pain•“immediate, significant or complete pain relief”…•Benefits wear off in a year or two and a “memory cycle specific to each individual wearer.”
Link to FTC News Page
Aspercreme Company sells a cream that is applied to the skin to help with aches and pains. In a commercial a spokesperson holds up a bottle of aspirin and says that Aspercreme contains the healing power of aspirin.…
Expanded to restaurants, Good idea? Potential Problems?
Labeling and Packaging Laws
Manufacturers must comply with labeling or packaging requirements for their specific products.
In general, all labels must be accurate and not misleading.
“Fresh” “Organic” “Low Fat”
Single Ingredient organic 95%-100% organic >70% Organic <70% Organic
20 or more locations Same name
(franchises) Sell same items Sell restaurant type
foods
Chain Restaurant Calorie Disclosure – Delayed Until May 2018
Start ehre tues
Chain Restaurant Calorie Disclosure – Delayed Until May 2018
Buffets are tough
Recent Examples
• Contains 4% maple• Says “All Natural”• Contains: Caramel color, xanthan gum• Spokesperson “The FDA does not define “Natural”
New Seal for “natural” products•Whole Foods and Clorox support
Telemarketing and Electronic Advertising
1. The Telephone Consumer Protection Act of 1991 prohibits:
• telephone solicitation using an automatic telephone dialing system or a prerecorded voice, as well as the transmission of
• advertising materials via fax without first obtaining the recipient’s permission to do so.
2. Do Not Call List – Started Sept 15, 2002 – names expire after five years
Fax at 3:00 am – DO NOT SPAM
Consumer Health and Safety
The Federal Food, Drug and Cosmetic Act– FDA– Safe and effective– medical devices
Consumer Product Safety Act– Flammable Fabrics Act– Consumer Product Safety Act– Can ban products– Can force recalls
State Consumer Protection Laws
Mattel voluntarily recalled this toy in because the Chinese company that made it used lead paint to save money
An estimated 6,100 people have been treated in hospital emergency rooms for injuries involving lawn darts from 1978 through present. At least 80 percent of the victims were younger than 15 years old, and more than 50 percent were ten years old or younger. More than half of the victims had injuries to the skull, eye, ear or face.
Lead and phthalate free products
Sales
door-to-door sales. The FTC requires all door-to-door sellers to give consumers three days (a “cooling-off” period) to cancel any sale.
mail-order sales unsolicited receipt of merchandise
End-of-Chapter Q 20-1, p. 685. •Andrew received an advertising circular for a new line of regional cookbooks and threw it away•Later, Andrew received an introductory cookbook : Lower Mongolian Regional Cookbook – on a trial basis.•Andrew did not return the cookbook and was charged $20.95.
End-of-Chapter Q 20-3, p. 685. •A salesperson for Renowned Books called on the Gonchars at their home•Gonchars agreed to purchase a 21 volume set of encyclopedias for $299•Two days later the Gonchars contacted the book company and cancelled.•Renowned said it had a deal and would not cancel.
Fair Credit Reporting Act
Free Verification Fix Mistakes Right to Include Rebuttal
Free Annual Credit Report
2017
The Truth-in-Lending Act
Disclosure Law. A disclosure law that requires sellers and lenders to disclose credit terms or loan terms in certain transactions, including:
– retail and installment sales and loans – car loans – home improvement loans – certain real estate loans
Purtle v. Eldridge Auto Sales, IncPurtle v. Eldridge Auto Sales, Inc•Purtle purchased a Blazer from Eldridge and misrepresented her employment status.Purtle purchased a Blazer from Eldridge and misrepresented her employment status.•In the credit contract, Eldridge did not fulfill the TILA and its regulations.In the credit contract, Eldridge did not fulfill the TILA and its regulations.•When Purtle defaulted and Eldridge repossessed the car, Purtle sued alleging violations of TILA. Court When Purtle defaulted and Eldridge repossessed the car, Purtle sued alleging violations of TILA. Court awarded Purtle damages and Eldridge appealed.awarded Purtle damages and Eldridge appealed.•Do you think that the greatest number of consumers are protected by strict enforcement of consumer Do you think that the greatest number of consumers are protected by strict enforcement of consumer laws?laws?
“Reg Z” box – Required for Loans Subject to TILA
The Truth-in-Lending Act
The TILA provides for the following:– Equal credit opportunity —Creditors are prohibited from
discriminating on the basis of race, religion, marital status, gender, and so on.
– Credit-card protection—Credit-card users may withhold payment for a faulty product sold, or for an error in billing, until the dispute is resolved; liability of cardholders for unauthorized charges is limited to $50, providing notice requirements are met; consumers are not liable for unauthorized charges made on unsolicited credit cards.
Fair Debt Collection Practices Act
Contacting the debtor at the debtor’s place of business
Contacting the debtor at an inconvenient time Contacting third parties Using harassment or intimidation Communicating with the debtor at any time after
receiving notice that the debtor is refusing to pay the debt
Validation Notice (30 days to dispute)Only applies to specialized debt collection agencies
Start ehre tues aftetr break 11000