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15 Cards in this Set

  • Front
  • Back
Major Consumer Protection
-deceptive advertising
-sales (door-to-door, telephone, used cars)
-credit protection
-fair debt collection
-bait and switch
Deceptive Advertising
advertising that misleads consumers, either by making unjustified claims concerning a product's performance or by omitting a material fact concerning the product's composition or performance

Roughly: occurs if a reasonable consumer would be misled by the advertising claim
disclosure law; requires sellers and lenders to disclose credit terms and loan terms so individuals can shop around for the best financing arrangements
--door-to-door: "cooling off" laws that allow buyers of goods sold door-to-door to cancel their contracts within a specified period of time

--Telephone/Mail-Order: protection from mail fraud
*Postal Reorganization Act of 1979 (if you get something in the mail that you didn't pay for you can do whatever you want with it)
*FTC Mail or Telephone Order Merchandise Rule of 1993: requires mail-order merchants to ship orders within the time promised, notify consumers when products won't be shipped on time, and issue a refund within the specified period of time if a consumer cancels an order
Credit Protection
*Consumer leases
*Equal credit opportunity
*Truth-In-Lending Act
*Consumer Credit Protection Act
-Credit card rules (unauthorized charges)
*Fair Credit Reporting: credit reporting agencies can issue credit reports only for specified purposes; consumer must be notified if a consumer is denied credit or insurance on the basis of their credit report
Fair Debt Collection
*Fair Debt Collection Practices Act: prohibits a collection agency from:
-contacting the debtor at their work if their employer objects
-contacting the debtor at inconvenient or unusual times
-contacting third parties other than the debtor's parents, spouse, or financial adviser unless court-authorized
-using harassment or intimidation
-communicating with the debtor at any time after receiving notice that the debtor is refusing to pay the debt
Bait and Switch
advertising a product at a very attractive price and then, once the consumer is in the store, saying that the advertised product either is not available or is of poor quality, then urging the customer to purchase a more expensive item
advertising undertaken after a FTC order for the purpose of correcting earlier false claims that were made about a product
Cease and Desist
an administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal
Multiple Product Orders
When will advertising be deemed deceptive (puffing)?
advertising that would APPEAR to be based on factual evidence but that in fact is scientifically untrue will be deemed deceptive;

advertising that contains an endorsement by a celebrity may be deemed deceptive if the celebrity does not actually use it
How does the Federal Food, Drug, and Cosmetic Act protect consumers?
established food standards, specifies safe levels of potentially hazard food additives, and sets classifications of food and food advertising;

drugs must be shown effective as well as safe

--basically protects consumers against adulterated and misbranded food and drugs
What is the Truth-in-Lending Act and when does it apply?
apply only to persons who, in the ordinary course of business, lend funds, sell on credit, or arrange for the extension of credit

-does not apply to sales or loans made between two consumers
What is the Fair Credit Reporting Act and when does it apply?
consumer credit reporting agencies can issue credit reports only for specific purposes (e.g. extension of credit, issuance of insurance policies, court order, consumer request); also, consumer must be notified when turned down credit because of their credit report;
consumer can request the source of any info being given out by the credit agency
Names of Key Legislation
*Telephone Consumer Protection Act
*Fair Packaging and Labeling Act
*Comprehensive Smokeless Tobacco Health Education Act
*Regulation Z: governs credit provisions associated with sales contracts
*"cooling-off" laws
*FTC Mail or Telephone Order Merchandise Rule
*Federal Food, Drug, and Cosmetic Act (FFDCA)
*Consumer Product Safety Act
**Truth-in-Lending Act
*Consumer Leasing Act
**Fair Credit Reporting Act
**Fair Debt Collection Practices Act