THE POWER OF THE
CONSUMER
Chapter 1
Section 1
You’re a Consumer
 As a consumer you use goods and services.
 Goods– physical objects that are produced.
 Services—actions that are performed for
someone, such as repairing a car, serving a meal,
or caring for a child.
You each play three key
roles!
 Consumer
 Worker—the producer of goods and services.
 Citizen—You use public services such as
schools and roadways. You pay taxes in order
to pay for these services, and you have the
right to vote for elected leaders.
The Power of the Consumer
 Individually the power of each consumer may
seem small, but collectively, the purchasing
decisions made by consumers have a huge
impact.
 Consumers buy a businesses product leading to
profit for the business, the business then pays
current works and hired new one. These workers
in turn become consumer spending money and
continuing the growth of the economy. During
this time the business focus on developing new
and better products to please the consumers.
Teenage Consumers
 Have played a very vital role in the economy.
Teens are now estimated to spend of $170
billion dollars each year.
 Because of this marketing often targets
teenagers.
 School
Technology and the Consumer
 Technology has change the way consumers
buy.
 Consumers are able to get information at a faster
rate and greater amount through TV and the
internet.
 Consumers are also faced with more decisions and
easier methods for purchase, leading to more
impulse buying.
What makes an Effective
Consumer!
 Effect consumers set goals—they decide
what they want and how to best carry out this
plan.
 Effect consumers think critically—They
make decisions based on careful
consideration of the alternatives and their
possible outcomes.
 Effective consumers do their research—they
read, observe and ask question.
What makes an Effect
Consumer!
 Effective consumers manage everyday
finances—they handle their income,
expenses, taxes, banking, and credit in a
responsible way.
 Effective consumers plan for financial
security—They set up savings, investing and
insurance plans.
SAFEGUARDING YOUR
PRIVACY
Section 1.3
Identity Theft
 One of the most significant threats to
personal security is IDENTY THEFT!!!
 SOCIAL SECURITY NUMBER: this a unique nine
digit number that is used by the SS administration
to keep track of what you earn.
 It can be used to access bank and credit card records as
well as other personal information
How it Happens!!!
HOW INFORMATION IS OBTAINED
HOW THEY USE THAT INFORMATION
*Stolen wallets and purses
*Stolen Mail
*They change your mailing address
*Information taken from your garbage
*Finding and stealing personal information
from your home.
*Stolen information from the internet.
*They pose as those you should trust with
the information.
*Looking over your shoulder
*They open a bank account in your name,
and write bad checks.
*They forge checks and drain your bank
account
*They order phones and wireless services
in your name.
*They run up bills for which you become
responsible.
Preventing Identity Theft
 Handle mail with care
 Keep items with personal information in a safe place
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or locked drawer.
Safeguard sensitive information on your computer
or online with passwords that include both numbers
and letters.
Don’t give out personal information through unsafe
means.
Use only secure website; shttp:// or https://
Ask service provides for safeguards.
Before you discard receipts and other personal
information shred it.
If Your Identity is Stolen
 File a report with the police
 Notify your bank and credit card company
 Call the three major credit reporting
agencies—Equifax, Experian, and TransUnion
 Call the FTC
How Companies Use the
Information You Provide
 Reputable business keep credit card numbers
secure and don’t share them with anyone.
 Your name, address, and purchasing history
in its customer database for its own
marketing purpose.
 The company might sell your name and
address t other retailers, either directly or
through data-collection companies.
 Your responses to product survey’s may be
used in future mailings.
Protecting Your Privacy
 Financial Services Modernization Act:
 Passed in 1999
 Requires companies involved in financial activities
to send privacy notices to customers.
 These notices must explain company policy
regarding the sharing of customers’ personal
information with other business.
Online Profiling
 A practice in which companies collect
information about the Web sites people visit,
and then use that information to predict what
the consumers may buy in the future.
 Cookies, small files that are stored on your
computer's hard drive when you visit a site.
Protecting Your Privacy
 Children’s Online Privacy Protection Act of
1998
 IT requires website directed at children under 13 to
post their privacy policy through a link on their
home page and anywhere personal information is
being collected.
Internet Safety
 Taking steps to prevent online harassment and
to deal with it if it occurs .
 Reveal as little personal information as possible.
 Share your primary e-mail address with trusted friends
and family.
 Watch what you say online. Avoid creating enemies.
 Use the preference options to block transmission of
mail, chat or instant messages from anyone who
persists in bothering you.
 If someone is harassing or threatening you, save the
communications as proof.
RECOGNIZING
DECEPTION AND FRAUD
Section 1.4
Deceptive Advertising
 This is advertising that is likely to mislead
consumers through false statements, omitted
information, or other unfair means.
Deceptive advertising is illegal, and the FTC is
empowered to stop it.
 Bait and Switch
 False promise of free gifts
 Deceptive pricing
 Hidden catches.
Fraud
 Fraud is deceitful conduct designed to
manipulate another person for some gain.
Pyramid scheme
 A common example of fraud is the pyramid
scheme, an illegal get-rich-quick plan.
Chain Letters
 This is a message sent via postal mail or e-
mail that instructs the recipient to send
copies to a certain number of other people.
Reporting Deception and
Fraud
 If you suspect deception or fraud rather or not
you actually fall victim report the situation.
Resolving Consumer Conflict
 Step to consumer conflict:
 Contact the merchant verbally
 Write a letter of complain with a follow-up if
needed.
 Move to dispute resolution: Mediation and
Arbitration. (Binding Arbitration.)
 Next seek legal action if neccessary
Legal steps to resolution
 Small claims court—This is a court where you can
settle disputes of small dollar amounts. These
cases are handled my a judge. (Think Judge
Judy), in Illinois these courts handle disputes
under $10000.
 Lawsuit—These actions are sought when the
amount of damage or goods reaches over the
amount small claims courts can handle.
 Class Action Suits—A lawsuit filed on behalf of a
group of people who all have the same
complaint. (Erin Brockovich)
Review Assignment
 Reviewing Key Terms and Ideas #1-15
 Thinking Critically #3 (Make sure this one appears in proper
sentence and paragraph form. It will require thought and I expect answers
that show that.)