Chapters 3.1 and 3.4

 Right to safety

Products must not endanger consumers’ lives or health
 Responsibility to use products safely
 Consumers are responsible for following directions for proper use and maintenance of products

 Right to be informed
 Business must provide accurate information in advertising, labeling, and sales practices.
 Responsibility to use information
 Consumers are responsible for using the information to evaluate product choices.

 Right to Choose
 Consumers should have a variety of goods and services from which to choose.
 Responsibility to choose carefully
 Consumers should take advantage of product variety by considering many opinions and making rational choices.

 Right to be heard
 The government must consider consumer interests when creating laws.
 Responsibility to express satisfaction or dissatisfaction
 Consumers should tell their elected officials their opinions on consumer issues, and inform them of improper business practices.

 Right to redress
 Consumers should be able to obtain fair remedies to consumer problems.
 Responsibility to seek redress
 Consumers should inform businesses of product defects and unfair practices and pursue remedies.



Right to consumer education

Sufficient information should be available for consumers to make rational decisions.
Responsibility to be an educated consumer

Consumers should take advantage of opportunities to gather information and learn how to make rational buying decisions.

 Right to a healthy environment
 Businesses should avoid polluting the environment and should contribute to the welfare of the community in which they operate.
 Responsibility to contribute to a healthy environment
 Consumers should support businesses that operate responsibly and report environmental abuses to authorities.

 Consumer movement
 Seeks to protect and inform consumers of requiring such practices as honest advertising, product warranties, and improved safety standards.

 Federal Trade Commission (FTC)
 Most important federal consumer protection agency
 Responsible for protecting consumers from unfair or deceptive business practices such as misleading information in advertising or on product labels
 Cease-and-desist order – stops deceptive advertising

 Consumer Product Safety Commission
(CPSC)
 Protects consumers from dangerous products.
 Environmental Protection Agency (EPA)
 State and local governments


Company’s promise that the product will meet specific standards over a given time period or the company will repair or replace it, or give a refund

 Magnuson-Moss Warranty Act
 Full warranty – VERY specific, written guarantee
 Limited warranty – limitations explained in detail

 Implied warranty
 unwritten guarantee
 *Express warranty
 statement which presents a specific quality of performance feature of a product


Consumer’s Union tests products and reports on the results in Consumer
Reports.

Underwriter’s Laboratories checks products for safety from fire, electric shock, and other hazards.

State’s attorney’s office handles frauds and misleading ad claims

Section 3.3

 Deception
 Exaggeration
 Legal
 Misleading
 Fraud
 Deliberate
 Unlawful extremes





Trading Up – practice of pressuring consumers to buy a more expensive product than they intended
Sale Price – must be below usual price
Suggested Retail Price – manufacturers price is sometime higher then what the retailer expects to get from it.
Loss Leader – below cost to attract you to the store

 Statement is fraudulent if:

Person making statement KNOWS it’s false
 Purpose of statement causes others to give up some value
 Proving fraud is difficult
 Was it a mistake?
 Was there intent?
 Best advice is to avoid fraud

 Bait and Switch
 Pyramid Schemes
 Chain letters
 Memberships, not products
 Telephone (& Internet) Fraud

 Too good to be true
 Request for credit card or ss#
 Buy for something free
 Refusal to send written confirmation or information
 Pressure to act now or offer expires
 Refusal to identify themselves or company
 Refusal to provide company info (phone, address)

 Drop famous names
“Having lunch with Michael Jordan was great…”
 Use terms of endearment, emotions
“I lost my mother and you remind me of her.”
 Suggest lack of power
“May I talk to the decision maker?”
 Use guilt trips
“I’ve already spent an hour with you…”
 Pressure to make quick decisions
“We only have two left…”

 Ask for time to think about it
 Ask for information be sent to you
 Ask for their number and call back
 Ask for referrals

 Health-care products that cure
 Home improvement charging fees up front
 Vacation clubs promising cheap vacations
 REALLY inexpensive repair work
 Weight loss programs appearing unrealistic

 Be skeptical!
 Ask questions!
 Research companies
 Research products

Use your head, not your “heart”

Section 3.4

 Have your facts straight
 Documentation
 Receipts, warranties
 Dates/locations/names
 Product details
 Price and payment method
 Explanation of problem
 Desired resolution
 Be rational, not emotional
 Document names, dates, and conversations

Customer service rep
Manager
Manufacturer
Consumer group/agency
Lawsuit

 Better Business Bureau
 Helps resolve disputes
 Keeps files of complaints
 Educates consumers
 Promotes honest advertising/selling
 Arbitration – consumer board
 Media help

 Allows time to back out of a deal
 Generally three days
 FTC created for door-to-door sales


Report incident to state’s attorney
 Small claim courts
 Price range ($1- to 10,000)
 No lawyer needed or allowed
 Court fees low
 Quick resolution