Consumer Rights Consumer Rights and and

ResponsibilitiesResponsibilitiesChapters 3.1 and 3.4Chapters 3.1 and 3.4

SafetySafety

Right to safetyRight to safety Products must not endanger consumers’ lives Products must not endanger consumers’ lives

or healthor health Responsibility to use products safelyResponsibility to use products safely

Consumers are responsible for following Consumers are responsible for following directions for proper use and maintenance of directions for proper use and maintenance of productsproducts

Information Information

Right to be informedRight to be informed Business must provide accurate information in Business must provide accurate information in

advertising, labeling, and sales practices.advertising, labeling, and sales practices. Responsibility to use informationResponsibility to use information

Consumers are responsible for using the Consumers are responsible for using the information to evaluate product choices.information to evaluate product choices.

ChoiceChoice

Right to ChooseRight to Choose Consumers should have a variety of goods Consumers should have a variety of goods

and services from which to choose.and services from which to choose. Responsibility to choose carefullyResponsibility to choose carefully

Consumers should take advantage of product Consumers should take advantage of product variety by considering many opinions and variety by considering many opinions and making rational choices.making rational choices.

HeardHeard

Right to be heardRight to be heard The government must consider consumer The government must consider consumer

interests when creating laws.interests when creating laws. Responsibility to express satisfaction or Responsibility to express satisfaction or

dissatisfactiondissatisfaction Consumers should tell their elected officials Consumers should tell their elected officials

their opinions on consumer issues, and inform their opinions on consumer issues, and inform them of improper business practices.them of improper business practices.

RedressRedress

Right to redressRight to redress Consumers should be able to obtain fair Consumers should be able to obtain fair

remedies to consumer problems.remedies to consumer problems. Responsibility to seek redressResponsibility to seek redress

Consumers should inform businesses of Consumers should inform businesses of product defects and unfair practices and product defects and unfair practices and pursue remedies.pursue remedies.

Consumer EducationConsumer Education

Right to consumer educationRight to consumer education Sufficient information should be available Sufficient information should be available

for consumers to make rational decisions.for consumers to make rational decisions. Responsibility to be an educated Responsibility to be an educated

consumerconsumer Consumers should take advantage of Consumers should take advantage of

opportunities to gather information and opportunities to gather information and learn how to make rational buying learn how to make rational buying decisions.decisions.

Healthy EnvironmentHealthy Environment

Right to a healthy environmentRight to a healthy environment Businesses should avoid polluting the Businesses should avoid polluting the

environment and should contribute to the environment and should contribute to the welfare of the community in which they welfare of the community in which they operate.operate.

Responsibility to contribute to a healthy Responsibility to contribute to a healthy environmentenvironment Consumers should support businesses that Consumers should support businesses that

operate responsibly and report environmental operate responsibly and report environmental abuses to authorities.abuses to authorities.

Why?Why?

Consumer movementConsumer movement Seeks to protect and inform consumers of Seeks to protect and inform consumers of

requiring such practices as honest requiring such practices as honest advertising, product warranties, and improved advertising, product warranties, and improved safety standards.safety standards.

Who can help?Who can help?

Federal Trade Commission (FTC)Federal Trade Commission (FTC) Most important federal consumer protection Most important federal consumer protection

agencyagency Responsible for protecting consumers from Responsible for protecting consumers from

unfair or deceptive business practices such as unfair or deceptive business practices such as misleading information in advertising or on misleading information in advertising or on product labelsproduct labels

Cease-and-desist order – stops deceptive Cease-and-desist order – stops deceptive advertisingadvertising

Who else?Who else?

Consumer Product Safety Commission Consumer Product Safety Commission (CPSC)(CPSC) Protects consumers from dangerous products.Protects consumers from dangerous products.

Environmental Protection Agency (EPA)Environmental Protection Agency (EPA) State and local governmentsState and local governments

WarrantiesWarranties

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

WarrantiesWarranties

Magnuson-Moss Warranty ActMagnuson-Moss Warranty Act Full warranty – VERY specific, written Full warranty – VERY specific, written

guaranteeguarantee

Limited warranty – limitations explained in Limited warranty – limitations explained in detaildetail

Implied vs. Expressed Implied vs. Expressed

Implied warranty Implied warranty unwritten guaranteeunwritten guarantee

*Express warranty *Express warranty statement which presents a specific quality of statement which presents a specific quality of

performance feature of a productperformance feature of a product

Misc.Misc.

Consumer’s UnionConsumer’s Union tests products and tests products and reports on the results in Consumer reports on the results in Consumer Reports.Reports.

Underwriter’s LaboratoriesUnderwriter’s Laboratories checks checks products for safety from fire, electric products for safety from fire, electric shock, and other hazards.shock, and other hazards.

State’s attorney’sState’s attorney’s office handles frauds office handles frauds and misleading ad claims and misleading ad claims

Deception and FraudDeception and Fraud

Section 3.3Section 3.3

Deception vs. FraudDeception vs. Fraud

DeceptionDeception ExaggerationExaggeration LegalLegal MisleadingMisleading

FraudFraud DeliberateDeliberate Unlawful extremesUnlawful extremes

DeceptionDeception

Trading Up – practice of pressuring Trading Up – practice of pressuring consumers to buy a more expensive consumers to buy a more expensive product than they intended product than they intended

Sale Price – must be below usual priceSale Price – must be below usual price Suggested Retail Price – manufacturers Suggested Retail Price – manufacturers

price is sometime higher then what the price is sometime higher then what the retailer expects to get from it. retailer expects to get from it.

Loss Leader – below cost to attract you to Loss Leader – below cost to attract you to the storethe store

FraudFraud

Statement is fraudulent if:Statement is fraudulent if: Person making statement KNOWS it’s falsePerson making statement KNOWS it’s false Purpose of statement causes others to give Purpose of statement causes others to give

up some value up some value Proving fraud is difficultProving fraud is difficult

Was it a mistake?Was it a mistake? Was there intent?Was there intent?

Best advice is to avoid fraudBest advice is to avoid fraud

When it seems too When it seems too good to be true…good to be true…

……it probably is!!it probably is!!

Types of FraudTypes of Fraud

Bait and SwitchBait and Switch Pyramid SchemesPyramid Schemes

Chain lettersChain letters Memberships, not productsMemberships, not products

Telephone (& Internet) FraudTelephone (& Internet) Fraud

Pyramid SchemesPyramid Schemes

Telephone FraudTelephone Fraud

Too good to be trueToo good to be true Request for credit Request for credit

card or ss#card or ss# Buy for something Buy for something

freefree Refusal to send Refusal to send

written confirmation or written confirmation or informationinformation

Pressure to act now Pressure to act now or offer expiresor offer expires

Refusal to identify Refusal to identify themselves or themselves or companycompany

Refusal to provide Refusal to provide company info (phone, company info (phone, address)address)

Telephone TechniquesTelephone Techniques

Drop famous namesDrop famous names““Having lunch with Michael Jordan was great…”Having lunch with Michael Jordan was great…”

Use terms of endearment, emotionsUse terms of endearment, emotions““I lost my mother and you remind me of her.”I lost my mother and you remind me of her.”

Suggest lack of powerSuggest lack of power““May I talk to the decision maker?”May I talk to the decision maker?”

Use guilt tripsUse guilt trips““I’ve already spent an hour with you…”I’ve already spent an hour with you…”

Pressure to make quick decisionsPressure to make quick decisions““We only have two left…”We only have two left…”

Telephone AdviceTelephone Advice

Ask for time to think about itAsk for time to think about it Ask for information be sent to youAsk for information be sent to you Ask for their number and call backAsk for their number and call back Ask for referralsAsk for referrals

More Faces of FraudMore Faces of Fraud

Health-care products that cureHealth-care products that cure Home improvement charging fees up frontHome improvement charging fees up front Vacation clubs promising cheap vacationsVacation clubs promising cheap vacations REALLY inexpensive repair workREALLY inexpensive repair work Weight loss programs appearing unrealisticWeight loss programs appearing unrealistic

Protect YourselfProtect Yourself

Be skeptical!Be skeptical! Ask questions!Ask questions! Research companiesResearch companies Research productsResearch products Use your head, not your “heart”Use your head, not your “heart”

Resolve Consumer Resolve Consumer ProblemsProblems

Section 3.4Section 3.4

Complaint processComplaint process

Have your facts straightHave your facts straight Documentation Documentation

Receipts, warrantiesReceipts, warranties Dates/locations/namesDates/locations/names Product detailsProduct details Price and payment methodPrice and payment method Explanation of problemExplanation of problem Desired resolutionDesired resolution

Be rational, not emotionalBe rational, not emotional Document names, dates, and conversationsDocument names, dates, and conversations

Who to talk to?Who to talk to?

Customer service repCustomer service rep

Manager Manager

Manufacturer Manufacturer

Consumer group/agency Consumer group/agency

Lawsuit Lawsuit

Consumer OrganizationsConsumer Organizations

Better Business BureauBetter Business Bureau Helps resolve disputesHelps resolve disputes Keeps files of complaints Keeps files of complaints Educates consumersEducates consumers Promotes honest advertising/sellingPromotes honest advertising/selling

Arbitration – consumer boardArbitration – consumer board Media helpMedia help

Cooling-off PeriodsCooling-off Periods

Allows time to back out of a dealAllows time to back out of a deal Generally three daysGenerally three days FTC created for door-to-door salesFTC created for door-to-door sales

Other optionsOther options

Report incident to state’s attorneyReport incident to state’s attorney Small claim courtsSmall claim courts

Price range ($1- to 10,000)Price range ($1- to 10,000) No lawyer needed or allowedNo lawyer needed or allowed Court fees lowCourt fees low Quick resolutionQuick resolution