Transcript Consumer Rights and Responsibilities

Consumer Rights and
Responsibilities
Chapters 3.1 and 3.4
Safety
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Right to safety
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Products must not endanger consumers’ lives
or health
Responsibility to use products safely
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Consumers are responsible for following
directions for proper use and maintenance of
products
Information
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Right to be informed
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Business must provide accurate information in
advertising, labeling, and sales practices.
Responsibility to use information
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Consumers are responsible for using the
information to evaluate product choices.
Choice
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Right to Choose
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Consumers should have a variety of goods
and services from which to choose.
Responsibility to choose carefully
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Consumers should take advantage of product
variety by considering many opinions and
making rational choices.
Heard
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Right to be heard
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The government must consider consumer
interests when creating laws.
Responsibility to express satisfaction or
dissatisfaction
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Consumers should tell their elected officials
their opinions on consumer issues, and inform
them of improper business practices.
Redress
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Right to redress
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Consumers should be able to obtain fair
remedies to consumer problems.
Responsibility to seek redress
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Consumers should inform businesses of
product defects and unfair practices and
pursue remedies.
Consumer Education
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Right to consumer education
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Sufficient information should be available for
consumers to make rational decisions.
Responsibility to be an educated
consumer
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Consumers should take advantage of
opportunities to gather information and learn
how to make rational buying decisions.
Healthy Environment
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Right to a healthy environment
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Businesses should avoid polluting the
environment and should contribute to the
welfare of the community in which they
operate.
Responsibility to contribute to a healthy
environment
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Consumers should support businesses that
operate responsibly and report environmental
abuses to authorities.
Why?
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Consumer movement
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Seeks to protect and inform consumers of
requiring such practices as honest
advertising, product warranties, and improved
safety standards.
Who can help?

Federal Trade Commission (FTC)
Most important federal consumer protection
agency
 Responsible for protecting consumers from
unfair or deceptive business practices such as
misleading information in advertising or on
product labels
 Cease-and-desist order – stops deceptive
advertising
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Who else?
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Consumer Product Safety Commission
(CPSC)
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Protects consumers from dangerous
products.
Environmental Protection Agency (EPA)
State and local governments
Warranties
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Company’s promise that the product will
meet specific standards over a given time
period or the company will repair or
replace it, or give a refund
Warranties
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Magnuson-Moss Warranty Act
Full warranty – VERY specific, written
guarantee
Limited warranty – limitations explained in
detail
Implied vs. Expressed
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Implied warranty
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unwritten guarantee
*Express warranty
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statement which presents a specific quality of
performance feature of a product
Misc.
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Consumer’s Union tests products and
reports on the results in Consumer
Reports.
Underwriter’s Laboratories checks
products for safety from fire, electric
shock, and other hazards.
State’s attorney’s office handles frauds
and misleading ad claims
Deception and Fraud
Section 3.3
Deception vs. Fraud
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Deception
Exaggeration
 Legal
 Misleading
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Fraud
Deliberate
 Unlawful extremes
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Deception
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Trading Up – practice of pressuring
consumers to buy a more expensive
product than they intended
Sale Price – must be below usual price
Suggested Retail Price – manufacturers
price is sometime higher then what the
retailer expects to get from it.
Loss Leader – below cost to attract you to
the store
Fraud
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Statement is fraudulent if:
Person making statement KNOWS it’s false
 Purpose of statement causes others to give
up some value
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Proving fraud is difficult
Was it a mistake?
 Was there intent?
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Best advice is to avoid fraud
When it seems too
good to be true…
…it probably is!!
Types of Fraud
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Bait and Switch
Pyramid Schemes
Chain letters
 Memberships, not products
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Telephone (& Internet) Fraud
Pyramid Schemes
Telephone Fraud
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Too good to be true
Request for credit
card or ss#
Buy for something
free
Refusal to send
written confirmation or
information
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Pressure to act now
or offer expires
Refusal to identify
themselves or
company
Refusal to provide
company info (phone,
address)
Telephone Techniques
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Drop famous names
“Having lunch with Michael Jordan was great…”
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Use terms of endearment, emotions
“I lost my mother and you remind me of her.”
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Suggest lack of power
“May I talk to the decision maker?”
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Use guilt trips
“I’ve already spent an hour with you…”
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Pressure to make quick decisions
“We only have two left…”
Telephone Advice
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Ask for time to think about it
Ask for information be sent to you
Ask for their number and call back
Ask for referrals
More Faces of Fraud
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Health-care products that cure
Home improvement charging fees up front
Vacation clubs promising cheap vacations
REALLY inexpensive repair work
Weight loss programs appearing unrealistic
Protect Yourself
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Be skeptical!
Ask questions!
Research companies
Research products
Use your head, not your “heart”
Resolve Consumer
Problems
Section 3.4
Complaint process
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Have your facts straight
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Documentation
Receipts, warranties
 Dates/locations/names
 Product details
 Price and payment method
 Explanation of problem
 Desired resolution
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Be rational, not emotional
Document names, dates, and conversations
Who to talk to?
Customer service rep
Manager
Manufacturer
Consumer group/agency
Lawsuit
Consumer Organizations
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Better Business Bureau
Helps resolve disputes
 Keeps files of complaints
 Educates consumers
 Promotes honest advertising/selling
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Arbitration – consumer board
Media help
Cooling-off Periods
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Allows time to back out of a deal
Generally three days
FTC created for door-to-door sales
Other options
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Report incident to state’s attorney
Small claim courts
Price range ($1- to 10,000)
 No lawyer needed or allowed
 Court fees low
 Quick resolution
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