Consumer Issues Objective 5.01C

Students will understand consumer protection agencies.

Rights of consumers were first identified by President John F. Kennedy in a message to Congress in 1962. Later presidents have added additional rights to this “Consumer Bill of Rights.”

Activist against corporate carelessness and greed, Ralph Nader brought attention to products that were not safe for consumers. He gained national attention in 1965 with his book, “Unsafe at Any Speed”. Known as “Father of the Consumer Movement”

What Laws Protect Consumers?

Brainstorm with a partner.

Federal Laws/Agencies That Protect• Clayton Antitrust Act• Clean Air Act• Clean Water Act • CPSA-Consumer Product

Safety Act• EEOC-Equal Employment

Opportunity Commission• EPA- Environmental

Protection Agency• FCC- Federal

Communications Commission

• FDA – Food and Drug Administration

• FLSA – Fair Labor Standards Act

• FPLA -Fair Packaging & Labeling Act

• FTC -Federal Trade Commission

• ICC -Interstate Commerce Commission

• NLRB - National Labor Relations Board

• OSHA - Occupational Safety and Health Administration

• Patent and Trademark Office

• Robinson-Patman Act• IRS -Internal Revenue

Service• TILA - Truth in Lending Act• UCC –Uniform Commercial

Code• USDA - United States Dept

of Agriculture• USPS – United States

Postal Service

Federal Trade Commission (FTC)

Prohibits deceptive and unfair trade practices among businesses

Very broad act that created numerous laws and agencies to regulate special areasHave you ever been deceived?

Key concept: FAIR TRADE PRACTICES

ADVOCATE for every US consumer

http://ftc.gov/

What are Unfair and Deceptive Trade Practices?Includes:

Price fixing on goods/services

Deceptive prices on service contracts

Door-to-Door Sales

Fraudulent Misrepresentation

Telemarketing Fraud

Work at home schemes

Illegal Lotteries

Scams

Gambling

Antitrust Laws

Purpose: To foster competition and fair trade To eliminate restraint of trade caused by

MonopoliesPrice fixingPrice discrimination

Q: Are all monopolies a bad thing for consumers?

Q: Why are some monopolies, such as utility companies, legal?

Antitrust ActsSherman Antitrust Act - 1890

First antitrust law

Evolved from the “Robber Baron” historical period

Clayton Antitrust Act - 1914 Clarifies laws, adds penalties for monopolies, fair trade, price fixing and price discrimination

Robinson-Patman Act-1936

Protects small businesses from price discrimination

United States Postal Service (USPS)

Established to provide a federal system of mail

Protects consumers from mail fraud* with federal USPS regulations

* Example: chain letters

https://www.usps.com/

Federal Communications Commission

Licenses and regulates the operation of airwaves that are utilized in:

Television

Radio

Telephone

Telegraph

http://www.fcc.gov/

Policies banning nudity, expletives and other indecent content on broadcast radio and televisionEx: Janet Jackson 2004 Super bowl Expose

Environmental Protection Agency (EPA)

Responsible for environmental protectionGoverns the environmental laws for air, water, solid waste, toxic substances, pesticides, and noise pollution

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http://www.epa.gov Boston’s “Green” Project

Environmental Protection Agency (EPA)

Manages all federal antipollution programs

Handles air, solid waste, toxic substances, and pesticides

Sets guidelines for program

Monitors programs

Establishes grants to help eliminate pollution

Researches and sets national standards for programs

Issues permits

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Record Setting 300 +mpg

Standards for Lead in Paint

Clean Water ActPurpose: Protects water

qualityRegulates water quality standards for rivers, lakes, streams, and oceans

Helps to reduce pollution in waterways, rivers, oceans, wetlands, wastewater treatment plants, and controls runoff pollutionProtects the water for swimming, fish, shell fish, and wildlife in water

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Clean Air Act

Established to protect public health and the environment

Created by the US EPA to authorize the National Ambient Air Quality Standards (NAAQS) to assist in the creations of law to protect the atmospheric environmentSets quality standards for factories and auto emissionsHandles problems such as acid rain, ground-level ozone, smog, and air toxinsWeather channel gives air quality info daily- “air particulates”

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Toxic Substance Control Act

Tracks industrial chemicals produced and imported into the US

Governed by EPA Screens, tests, and reports chemicals that pose a threat to the environmentEPA can prohibit the manufacture or import of chemicals thought to be hazardous

Labor Laws

Fair Labor Standards Act:

Restricts child labor

Identifies dangerous jobs

Minimum wage

Time and a half overtime

Equal Pay Act: equal pay for equal work

Social Security:Contributions by employee and employer for benefits

Worker’s Compensation Act:

provides income or health care

if illness caused by job or injured on the job

Labor LawsCivil Rights Act of 1964:

Prohibits discrimination in employment practices

Complain to the Equal Employment Opportunity Commission (EEOC)

Link: Civil Rights Act and the EEOC

Laws Protecting Debtors

Set maximum interest rates

Usury- state laws that regulate the maximum interest rate legally chargeable to consumers

Truth in Lending Act

Requires full disclosure of interest and finance charges over life of loan

Limits chargeable items on lost/stolen credit cards to $50

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Laws Protecting Debtors

Equal Credit Opportunity Act

When applying for credit, decisions must be made on:

*Ability to repay, based on evaluation of application, including:

Income, current debt obligations, credit rating, dependents

*Cannot legally discriminate based on gender, age, ethnicity, or religion

*Acceptance and rejection Based on income, current debts, or poor credit

record If denied, applicant may request reasons in writing

Product Liability

Consumer Product Safety Act of 1972Created the Consumer Product Safety Commission (CPSC) Sets product standards for hazardous productsRequires manufacturer or seller to test quality and reliability before marketing productCan require recall, repair, replacement or refunding of the purchase price, of unsafe products Examples:

Children’s toys with dangerous parts Defective vehicle tires that cause accidents

http://www.cpsc.gov/

Food, Drug and Cosmetic Act

Created the Food and Drug Administration (FDA)Passed in 1903 after President Teddy Roosevelt read “The Jungle” by Upton SinclairProhibits adulteration or mislabeling of foods, drugs or cosmeticsCreates standards for packaged foods, drugs and cosmeticsApproves new pharmaceuticals (prescription drugs)

http://www.fda.gov/

Food and Drug Administration

FDA regulates packaged Food, Drugs, Cosmetics including:

Inspecting production facilities for cleanliness

Setting standards of purity and quality

Approving ingredient lists as to fitness for human consumption or use

Requiring labeling with manufacturer, packager, distributor, weight & nutritional information to assist consumer in informed decision making

Food and Drug Administration

FDA discourages the sale of harmful products through:

Imposing high taxes. Issuing label or package warning.Prohibiting the sale of the product.

Examples: tobacco, alcohol, saccharin, red food dye

Can you name other examples?

United States Department of Agriculture (USDA)

Regulates preparation and sale of fresh produce, meats and dairy products

Inspects canners, packers and processors and distributors for sanitary conditions and handling

Inspects products to ensure freedom from disease and fit for human consumption

http://www.usda.gov/wps/portal/usda/usdahome

What could you do with 90 Gatorade bottles?

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National Energy Conservation Policy Act - How can we be more efficient?

Weights and Measures Division of the National Institute of Standards

Promotes uniformity in weights and measures laws, regulations, and standards

Allows consumers to make comparison shopping decisions such as unit pricing

Examples: gas pumps, dispensing of pharmaceuticals, measurement by nurses, food weights and measurements

http://www.nist.gov/index.html

Division of Weights and Measures

The correct way to weigh yourself:

“I can't believe I was doing it wrong all these years.WE MUST SPREAD THE WORD!”

Better Business Bureau (BBB)

A private, non-government agency available at local and state levels

Logs complaints from consumers Passes complaint information to businesses that are

members, frequently resolving issue Makes complaints available for public viewing Tries to steer consumers to reliable businesses that conduct

business ethically

http://nwnc.bbb.org/