Download Lesson 3-4 Consumer rights and responsibilities

LESSON 3-4 CONSUMER
RIGHTS AND RESPONSIBILITIES
Learning Goals:
-Describe your rights as provided by major consumer
protection laws, and list sources of consumer assistance if
you have a complaint.
-Describe common deceptive practices that defraud
consumers.
-Discuss your responsibilities as a consumer to protect
yourself from consumer fraud.
 The
Consumer Bill of Rights - 1962

Right to safety

Right to be informed

Right to choose

Right to be heard

Right to redress

Right to consumer education
 Airline
Passenger Rights – 1999

Confirmed reservations – you must be given a seat

Refunds – when the ticket is cancelled, you must be given a
refund or your fares must be applied to another trip.

Compensation for hardships – when there are delays and
cancellations, you must be given compensation
LAWS DEFINING CONSUMER RIGHTS

Consumer Technology Bill of Rights

Time-shifting – when you record video or audio for later viewing or
listening

Space-shifting – allows you to copy the contents of a CD or other
media to a portable or other device for personal use, not
commercial purposes

Backup copies – allowed to make backups of purchased CDs, DVDs
and other media in case it is destroyed.

Platform of choice – Allowed to listen to music on whatever device
you choose.

Translation
LAWS DEFINING CONSUMER RIGHTS
 Patients’
Bill of Rights
 Informed
disclosure
 Choice
of providers
 Access
to emergency services
 Treatment
 Respect
decisions
and nondiscrimination
 Confidentiality
LAWS DEFINING CONSUMER RIGHTS
 Food,
Drug, and Cosmetic Act of 1938 – Food be safe,
pure, and wholesome – Drugs and medical devises be
safe and effective – Cosmetics be safe for human use.
Truthful labeling is also required.
 Hazardous
Substances Act of 1960 – Warning labels
must appear on all products that are potentially
dangerous to consumers.
 Kefauver-Harris
Drug Amendment of 1962 – Drug
manufacturers must test drugs for safety and
effectiveness before they are sold to consumers.
 Cigarette
Labeling and Advertising Act of 1965 –
warning labels regarding health hazards must be
clearly visible on products. Warning labels warn
consumers of risks and safety issues.
CONSUMER PROTECTION LAWS
 National
Traffic and Motor Vehicle Safety Act of 1966 –
Testing and inspections are required to be sure they
meet minimum standards for safety.
 Care
Labeling Rule of 1971 – Clothing a fabrics must
be labeled with instructions for cleaning, wash and dry
temperatures, and other care needed to preserve the
product.
 Nutrition
Labeling and Education Act of 1990 – All
foods and drinks must have labels that disclose the
amount of nutrients including the amount of calories,
fat, salt , and other ingredients. In 1993, the act was
extended to restaurants that must comply with health
claims on signs and menus.
CONSUMER PROTECTION LAWS
 Family
Educational Rights and Privacy Act (FERPA) of
1974 – a federal law that protects the right of student
records. Information can not be released without
consent of a parent or guardian. Social Security
numbers cannot be used as student ID numbers.
 Health
Insurance Portability and Accountability Act
(HIPPA) of 1996 – protects your health and billing
information, including information stored on computer
networks, by limiting who can have access to it. Social
Security numbers cannot be used for patient
identification.
CONSUMER PROTECTION LAWS
 Federal
Agencies:

U.S. Department of Agriculture (USDA)

Food and Drug Administration (FDA)

Consumer Product Safety Commission (CPSC)

Federal Communications Commission (FCC)

Federal Trade Commission (FTC)

Federal Aviation Administration (FAA)

Securities and Exchange Commission (SEC)
SOURCES OF CONSUMER PROTECTION
 State
and Local Assistance

State Attorney General

County and Cities may have consumer protection
offices
 Private
Organizations

The Better Business Bureau (BBB)

The Major Appliance Consumer Action Panel (MACAP)

The National Consumers League (NCL)

Consumers Union (CU) – publishes a magazine called
Consumer Reports
 Public
Officials
SOURCES OF CONSUMER PROTECTION
 Marketplace
is full of deceptive and misleading
information. Deception is false or misleading claims
made about the quality, price, or purpose of a
product.
DEFRAUDING CONSUMERS
 Bait
and Switch – an illegal sales technique in which
the business advertises a bargain product with the
intent of persuading consumers to buy a more
expensive product.
 Fake
Sales – A business advertises a big sale but keeps
items at a regular price.
 Low-Balling
– advertising a basic service at an
unusually low price and then claiming additional
repairs or services are needed.
 Pyramid
Schemes – an illegal multilevel marketing
gimmick that promises commissions on one’s own
sales as well as on the sales of recruits
TYPES OF DEFRAUDING
 Ponzi
Schemes – a fraudulent investment operation in
which money collected from new investors is used to
pay off earlier investors.
 Pigeon
Drop – a scam in which a con artist convinces
a person to give up his or her money in return for a
share of a larger sum of money.
 Fraudulent
Representation – telephone or door-todoor solicitation well-known made by people who
claim to represent well-known companies or charities
are another type of swindle
 Health
and Medical Product Frauds – involves
deceptive advertising for expensive “miracle” pills,
creams, or devices to enhance health and beauty.
TYPES OF DEFRAUDING
 An
infomercial is a lengthy paid TV ad that includes
testimonials, demonstrations, and introductory prices.
 Some
infomercial are genuine but not all.
 Infomercials
often make product claims that do not
deliver on their promises.
INFOMERCIALS
 Identify
 Shop
 Stay
 Seek
deceptive practices
smart
informed
redress
PROTECT YOURSELF FROM FRAUD
 You
can get something for nothing
 You
can buy a high-quality product for an incredibly low
price
 To
receive a prize or “free” product or service, you must
supply your credit card or checking account number or
pay a high shipping fee
 You
will receive a free gift if you act now
 You
or your home has been specially selected
 You
can attend a demonstration with no obligation to buy
 If
you don’t decide right now, you will lose the opportunity
IDENTIFY DECEPTIVE PRACTICES
Be aware of prices
 Understand sale terminology











Sale means that goods are offered for sale, not necessarily at a reduced
price
Clearance sale means the business wants to clear out merchandise, it may
not be a reduced price
Liquidation means the business wants to sell everything right away, but not
necessarily at reduced prices
Computer unit prices
Read Labels
Check packages carefully
Read contracts
Keep receipts and warranties
Compute total cost
Research businesses
SHOP SMART
 Educate
 Check
yourself about products and services.
publications such as Consumer Reports
 Analyze
advertisements and assess your needs.
 Be
wary of emotional appeals that are too good to be
true.
 Ask
 Be
questions
aware of the latest scams
 Report
fraudulent practices to consumer protection
agencies.
STAY INFORMED
 Follow
these steps:
1.
Take the product back to the store where you bought
it.
2.
Stay firm but not angry.
3.
Put your complaint in writing.
4.
Send copies of evidence, such as sales receipts,
warranties, previous correspondence, and anything
else that will support your position.
5.
File with consumer protection agencies.
6.
As a last resort, seek legal recourse.
SEEK REDRESS
 Due
Friday, Jan. 30: pg. 111 questions 1-9, 10,
12-14, 16, 18-22
ASSIGNMENT