Chapter 24: Protecting Consumers
Consumer Organizations and Agencies
Finding Solutions to Consumer Problems
- At some point, you may have trouble with a product or service.
- There are things you can do to resolve the matter yourself.
- When faced with a purchasing problem, review your receipts and warranties.
- Consumer organizations may be able to help.
- If you do not get the results you want, you might decide to file a claim in small claims court.
Nongovernmental Consumer Organizations
- There are many organizations that work on behalf of consumers.
- Groups and individuals who work to protect, inform, and defend consumers are called consumer advocates.
- The Consumer Federation of America (CFA) works to inform the public and government about consumer issues.
- The National Consumers League is the nation’s oldest non- profit consumer group with membership open to anyone.
- Consumers Union is a nonprofit organization that publishes the magazine Consumer Reports
- Some industries have consumer assistance panels.
- The Major Appliance Consumer Action Program (MACAP) helps consumers solve problems with large appliances, such as washers, stoves, and freezers.
- Internet sites, radio, TV stations, and newspapers advocate for consumers.
- They often have a consumer reporter who reports on issues that are important to consumers, such as product safety, testing, and shopping.
Government Consumer Organizations
- In the United States, each state has a consumer affairs division.
- Many state and federal agencies have been set up to protect consumers.
- The Federal Trade Commission (FTC) enforces federal antitrust and consumer protection laws by investigating complaints against companies
- The U.S. Department of Agriculture (USDA) inspects foods and grades them.
- Grade labels indicate the level of quality of foods.
- The Food and Drug Administration (FDA) regulates the labeling and safety of food, drugs, cosmetics, dietary supplements, and medical devices sold in the United States.
- The National Highway Traffic Safety Administration is part of the U.S. Department of Transportation.
- A recall is an order to take back and repair or replace a product that has defective parts
- The U.S. Consumer Product Safety Commission is a federal government agency that oversees the safety of products such as toys, cribs, power tools, electronics, and furniture.
- State public utilities commissions regulate the rates charged by electric, gas, and water companies.
- A legal monopoly is a company that is allowed to operate without competition.
- State insurance commissions are the state government bodies responsible for regulating the activities of insurers and health plans.
- State licensing agencies issue licenses, or legal permits to conduct business.
Consumer Protection Laws
Laws that Protect Consumers
- The U.S. government allows businesses to compete in the marketplace with relative freedom.
- However, many laws have been enacted to regulate and restrict business practices.
- Manufacturers of products for the public must become familiar with consumer protection laws.
- Price discrimination is the act of charging more than one price for the same product or service in different markets or to different customers.
- The Clayton Act of 1914 and the Robinson- Patman Act of 1936 are aimed at prohibiting price discrimination.
- The Fair Packaging and Labeling Act requires that manufacturers’ labels truthfully list all ingredients and raw materials used in production.
- The Uniform Commercial Code (UCC) is a group of laws that regulate commercial business transactions.
- The UCC protects the economic interests of buyers and sellers in contracts.
- It also regulates sales warranties.
- The Consumer Credit Protection Act requires those who give credit to reveal all the terms and conditions of their credit agreements.
- The Federal Trade Commission Act protects consumers from false and misleading advertising with truth-in-advertising laws.
How Businesses Protect Consumers
- The business community protects consumers by providing information.
- Labels, brochures, manuals, and online details are some of the ways that businesses educate consumers about their products and services.
- The Better Business Bureau (BBB) is a nonprofit organization that collects information on local businesses and handles complaints.
- Many businesses have a customer service department.
- A customer service representative can answer questions or help resolve problems
- Advertising can be a good source of consumer information.
- Some commercial magazines are good sources of consumer information.