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Personal Personal FinanceFinance
Chapter 12Chapter 12
© EMC Publishing, LLC
Consumer AwarenessConsumer Movement
• Began in the late 1800s – Meatpacking plants
– The Jungle
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• Have you read The Jungle, by Upton Sinclair? What did you think?
• What impact did that book have on government and the rights of the people?
• Are there any books today that have had that type of impact on society and government? If no, why not?
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer– Advertise
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer– Advertise
– Provide toll-free numbers
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer– Advertise
– Provide toll-free numbers
– Provide warranties
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer– Advertise
– Provide toll-free numbers
– Provide warranties
– Use Energy Star label
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer– Advertise
– Provide toll-free numbers
– Provide warranties
– Use Energy Star label
– Get Seal of Approval (Good Housekeeping)
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer
• Consumer– Make informed choices
• Find product information
• Do product comparisons
• Ask for recommendations
© EMC Publishing, LLC
Consumer AwarenessThree Roles• Producer• Consumer
– Make informed choices– Communicate opinions
• Write letters• Tell retailers• Return surveys
© EMC Publishing, LLC
Consumer AwarenessThree Roles• Producer• Consumer
– Make informed choices– Communicate opinions– Work together
• Boycott • Use lobbyists• Form consumer interest groups
© EMC Publishing, LLC
Consumer AwarenessThree Roles
• Producer
• Consumer
• Citizen– Vote
– Communicate with elected officials
– Learn about government agencies
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies
• Federal Trade Commission (FTC)
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal CommunicationsCommission (FCC)
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal CommunicationsCommission (FCC)
• Food and DrugAdministration (FDA)
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal CommunicationsCommission (FCC)
• Food and Drug Administration (FDA)
• Surface Transportation Board
© EMC Publishing, LLC
Consumer AwarenessGovernment Agencies• Federal Trade Commission (FTC)• United States Postal Service• Federal Communications
Commission (FCC)• Food and Drug Administration (FDA) • Surface Transportation Board• Consumer Product Safety Commission
(CPSC)
© EMC Publishing, LLC
Consumer AwarenessGovernment Regulation
• Debate for– Protects against price gouging
– Promotes product standards
– Supports consumer safety
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Consumer AwarenessGovernment Regulation
• Debate against– Impedes caveat emptor
– Limits competition
– Hurts economy (companies lose money)
– Deregulation cuts “red tape”
© EMC Publishing, LLC
Which of the following government agencies regulates the safety of our food?
A. FTC
B. FDA
C. CPSC
D. FCC
E. FEC
© EMC Publishing, LLC
Which of the following government agencies regulates the safety of our food?
A. FTC
B. FDA
C. CPSC
D. FCC
E. FEC
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• Do state governments as well as the federal government regulate commerce? What is the difference?
• How do consumers know what rights they have?
• Should the government increase or decrease regulation? Why?
© EMC Publishing, LLC
Consumer RightsLegislation
• Consumers’ Bill of Rights – 1962– Right to safety
– Right to be informed
– Right to choose
– Right to be heard
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Consumer RightsRight to Safety
• Safe cars– Car seats
© EMC Publishing, LLC
Consumer RightsRight to Safety
• Safe cars– Car seats
• Safe water
© EMC Publishing, LLC
Consumer RightsRight to Safety
• Safe cars– Car seats
• Safe water
• Safe food
© EMC Publishing, LLC
Consumer RightsRight to Safety
• Safe cars– Car seats
• Safe water
• Safe food
• Protection against lead and toxins
© EMC Publishing, LLC
Consumer RightsRight to Be Informed
• Home shopping– Internet
– Catalogs
– TV
– 30-day rule
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Consumer RightsRight to Be Informed
• Telemarketing– Do Not Call
(http://fin.emcp.net/donotcall)
© EMC Publishing, LLC
Consumer RightsRight to Be Informed
• Contract– Mutual assent
– Consideration
– Competent parties
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Consumer RightsRight to Be Informed
• Consumer fraud– Pyramid schemes
– Internet
Consumer RightsRight to Choose
• Competition (markets)– Competitive
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Consumer RightsRight to Choose
• Competition (markets)– Competitive
– Oligopolistic
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Consumer RightsRight to Choose
• Competition (markets)– Competitive
– Oligopolistic
– Monopolistic
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Consumer RightsRight to Be Heard
• Government import policy– Tariffs
– Quotas
– NAFTA
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Dear Better Business Bureau:
Recently I purchased a newwashing machine from …
Consumer RightsRight to Be Heard
• Better Business Bureau
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Consumer RightsRight to Be Heard
• Better Business Bureau• Lodging a complaint (advance to see sample)
© EMC Publishing, LLC
© EMC Publishing, LLC
Consumer RightsRight to Be Heard
• Next step after letter of complaint– Legal / Court
• Consumer action panels
• Arbitration
• Small-claims court
• Lawsuit
• Class-action suit
© EMC Publishing, LLC
Consumer RightsFraud on the Internet
• Phishing – identity theft
• E-mail scams
• Redirecting to another site
© EMC Publishing, LLC
Consumer RightsFraud on the Internet
• Tips– Hot spot – WiFi (theft is easier)
– Use secure site for data (shttp or https)
– Make sure company is reputable, if possible
– Print copy of all transactions
– Report phishing to [email protected]
© EMC Publishing, LLC
Which of the following is not a right from the Consumers’ Bill of Rights passed in 1962?
A. Right to be informed
B. Right to safety
C. Right to be heard
D. Right to choose
E. Right to freedom of religion
© EMC Publishing, LLC
Which of the following is not a right from the Consumers’ Bill of Rights passed in 1962?
A. Right to be informed
B. Right to safety
C. Right to be heard
D. Right to choose
E. Right to freedom of religion
What do you think?Discussion
© EMC Publishing, LLC© EMC Publishing, LLC
• Do you use eBay or any other online auction site? How does it work?
• What tips do you have for shopping on the Internet?
• Have you ever had a bad experience online? Explain.
© EMC Publishing, LLC