Consumer Protection: Against Inferior Services and Goods

Introduction: The chapter discusses the various protections in place for consumers against inferior goods and services.

Scenario: Government officials recently learned about a cleaning solution for soft contact lenses linked to a rare eye infection.
- Possible Actions for the Government: Assess the safety and effectiveness of the product, issue safety alerts, regulate distribution, potentially recall the product.

Importance of Licensing: Licensing suppliers helps protect consumers by ensuring that only qualified professionals provide essential services.
- Professions Requiring Licenses:
- Health Services: Doctors, Nurses, Laboratory Technicians, and Pharmacists.
- Other Professions: Teachers, Lawyers, Accountants, Construction Workers, Realtors, Insurance Agents, and Beauticians.
- Inspections for Businesses: Certain businesses must undergo inspections to obtain operating licenses, including Hospitals, Rest Homes, Private Schools, Check-Cashing Services, and Insurance Companies.
- Consequences of Violations: Failure to maintain standards can lead to suspension or cancellation of licenses.

Written Estimates and Bills: Service businesses like auto repairs and electronics must provide written estimates and detailed bills.
Regulation of Special Sales: States regulate retail business sales, e.g., special licenses for bankruptcy sales. Non-compliance can lead to accusations of fraud.

Statistics and Impact: A significant number of injuries and fatalities occur due to hazardous products.
- Legislation: The Consumer Product Safety Act was enacted in 1972, leading to the creation of the Consumer Product Safety Commission (CPSC).
- Authority of CPSC: To issue and enforce safety standards for most consumer products.
- Case Study - CCA Treated Wood:
- Background: In 2002, due to research indicating varying levels of arsenic leaching from treated wood, CCA (Chromated Copper Arsenate) was banned for use in construction post-December 31, 2003.
  - Composition: CCA contains 22% arsenic which poses severe health risks.
  - Health Risks: Potential leaching into water supplies, toxic exposure from burning, cutting, or splintering the material.

Reporting Requirements: Manufacturers and distributors must report product failures to the CPSC.
Product Recall Procedures: If a product is deemed hazardous, the CPSC mandates notification and options for recall, repair, replacement, or refunds.
Voluntary Recalls: The threat of CPSC actions often encourages voluntary product recalls by manufacturers.
Consumer Recourse: Consumers may sue in federal court if they believe CPSC isn't acting appropriately, potentially recovering reasonable attorney fees and costs if they win.
Public Engagement: The CPSC provides resources for consumers to report unsafe products and keep informed about recalls.

Building Codes and Safety Regulations: Laws govern various aspects of public buildings: construction, accessibility, occupancy rates.
- Safety Features: Regulations cover fire escapes, elevators, parking facilities, sprinkler systems, and sanitary facilities to ensure public safety.

FDA Oversight: The Food and Drug Administration enforces standards for cleanliness and safe production in food and drug manufacturing.
- Definitions: Products that fail to meet standards are considered adulterated and may be seized by the government.
Inspection Responsibilities: The U.S. Department of Agriculture oversees food products, ensuring they are disease-free and processed hygienically.
Labeling Requirements:
- Manufacturers must include: Name and address, quantity sold (weight or volume), and nutritional content (including calories, fat, sodium, etc.).
- Regulation Effectiveness: Legislation passed in March 2010 mandates calorie information displays at chain restaurants to combat obesity trends, which increased from 15.9% in 1995 to over 26% in 2008.
Enforcement Measures: State and local inspections ensure ongoing compliance in food handling businesses.

FDA's Role: The FDA ensures drug safety and effectiveness, regulating sales to differentiate prescription drugs from over-the-counter drugs.
Implications for Consumer Products: In potential consumer scenarios like the contact lens cleaner issue, the FDA could order cessation of marketing and product recalls based on safety assessments.