Consumer Protection: Governmental Action

Chapter 15: Consumer Protection

15-1 Protection through Governmental Action

  • Book Title: Law for Business and Personal Use

  • Printed By: David Charles (c2363228@katyisd.org)

  • Copyright: © 2017 South-Western, Cengage Learning

  • All rights reserved: © 2026 Cengage Learning Inc. No part of this work may be reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.

Goals

  • Explain the need for governmental involvement in the marketplace:

    • Government involvement is necessary to ensure fairness and protect consumers from fraud, deception, and unfair business practices.

  • Identify protections against substandard goods:

    • Government enforces standards and regulations to protect consumers from harmful or inferior products.

  • Recognize unfair methods of competition:

    • Consumers should be informed about methods that prioritize profit over fairness, leading to diminished consumer rights and market manipulation.

Legal Vocabulary

  • Consumer:

    • An individual who acquires goods primarily for personal, family, or household use.

  • Caveat Emptor:

    • A Latin phrase meaning "let the buyer beware." This emphasizes the principle that the buyer assumes the risk for the quality of goods purchased.

  • Caveat Venditor:

    • A Latin phrase meaning "let the seller beware." This indicates that the seller must be aware of their goods and practices to ensure compliance with the law.

  • Class Actions:

    • A court procedure allowing a party to bring suit on his or her behalf and for those similarly situated, enabling multiple victims of the same issue to join together in a single case.

  • Cease-and-Desist Order:

    • A governmental order requiring that certain improper conduct be stopped. This often relates to unfair business practices identified by regulatory agencies.

  • Consent Order:

    • A voluntary, court-enforceable agreement between the government and an offender requiring the termination of an illegal or questionable practice. It typically does not admit wrongdoing but agrees to cease certain actions.

  • Restitution:

    • Permits a party to a contract to recover money or property (or the value thereof) given to the other party. This reinforces the idea of fairness in business transactions.

  • Unfair Method of Competition:

    • Any method of doing business that is characterized by bad faith, deception, fraud, or a tendency to inhibit competition or monopolize a market. Such methods are viewed negatively by regulatory bodies.

  • Bait and Switch:

    • An improper business practice involving luring buyers to the store with an understocked, low-priced good and then redirecting them to a more expensive product. This practice is considered deceptive and illegal under consumer protection laws.