CH 24 - Consumer Protection

consumer law

the body of statutes, agency rules, and judicial decisions, protecting consumers of goods and services from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and other such practices

deceptive advertising

advertising that misleads consumers, either by making unjustified claims about a product’s performance by omitting a material fact concerning the product’s composition or performance

claims based on factual evidence

advertising that appears to be based on factual evidence but, in fact, is not reasonably supported by evidence will be deemed deceptive

claims based on half-truths

presented information is true but incomplete and may therefore lead consumers to a false conclusion

bait and switch advertising

advertising a product at an attractive price and then telling the consumer that the advertised product is not available or is of poor quality and encouraging them to purchase a more expensive item

cease and desist order

an administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal

counteradvertising

new advertising that is undertaken to correct earlier false claims that were made about a product

multiple product order

an order requiring a firm that has engaged in deceptive advertising to cease and desist from false advertising in regard to all the firm’s products

telephone consumer protection act (TCPA)

prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice

telemarketing and consumer fraud and abuse prevention act

establishes rules governing telemarketing and brings actions against fraudulent telemarketers

cooling off laws

laws that allows buyers of goods sold in certain transactions to cancel their contracts within three business days

energy policy and conservation act

requires automakers to attach information label to every new car that includes the Environmental Protection Agency’s fuel economy estimate for the vehicle

nutrition labeling and education act

requires food labels to provide standard nutrition facts; regulates the use of terms such as “fresh” and “low fat”

food safety modernization act (FMSA)

in response to food contamination; provides government with greater control over the U.S. food safety system; gives FDA authority to directly recall any food products that it suspects are tainted

consumer product safety act

created a comprehensive regulatory scheme over consumer safety matters; established the consumer product safety commission (CPSC)

the truth in lending act

requires sellers and lenders to disclose credit and loan terms so that individuals can shop around for the best financing arrangements

regulation z

a set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth in Lending Act

equal credit opportunity act (ECOA)

prohibits denial of credit solely on the basis of race, religion, etc.; prohibits credit discrimination on the basis of whether an individual receives certain forms of income, such as public-assistance benefits

fair credit reporting act (FCRA)

protects consumers against inaccurate credit reporting; requires that lenders and other creditors report correct, relevant, and up-to-date information

fair debt collection practices act (FDCPA)

attempts to curb perceived abuses by collection agencies; applied to specialized debt-collection agencies and attorneys who regularly attempt to collect debt on behalf of someone else

validation notice

an initial notice to a debtor from a collection agency informing the debtor that they have thirty days to challenge the debt and and request verification