Unit B
The Consumer’s Impact on
Business
Section 2.01
The Government’s Role in
Consumer Protection
Consumer Rights & Responsibilities
 The federal government has created
agencies to make sure the rights of
consumers are enforced so goods and
services purchased in the marketplace are
safe and fair.
 These agencies were created to protect the
following rights and responsibilities of
American consumers:
Consumer Rights & Responsibilities
 The right to be informed.
– Consumers should be given the facts
needed to make informed choices
– Consumers should compare brands when
shopping
– Consumers should be protected from:
• Unfair or misleading advertising.
• Incorrect product labels.
• Fraudulent sales practices.
Consumer Rights & Responsibilities
 The right to safely choose products
and services.
– Consumers should have access to a variety
of goods and services at competitive prices.
 The right to use products safely.
– Consumers should be protected against
products the are hazardous to life or health.
Consumer Rights &
Responsibilities
 The right to speak out and be heard.
– Consumers should be assured their
interests will be considered in the making
of laws that might affect them.
 The right to seek remedy and have
problems corrected.
– Consumers should be entitled to quick
and fair remedies for consumer problems.
Consumer Rights & Responsibilities
 The right for consumer education
– Consumers should be taught to use their
rights and responsibilities to the greatest
satisfaction for the money.
Federal Consumer
Protection Agencies
Consumer Information Center
 This agency provides information on
government publications on many topics
that concern consumers:
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66 Ways to save money
Heating &cooling your home
Fraudulent web sites
Current scams
 http://www.pueblo.gsa.gov/links.htm
Consumer Product Safety
Commission
 This agency promotes safety from
unreasonable risk of injury from
products, sets safety requirements, tests
products, conducts research, and
provides consumer safety education
programs.
 http://www.cpsc.gov/
Consumer Product Safety
Commission
 The CPSC is charged with protecting
the public from unreasonable risks for
more than 15,000 products: toys, cribs,
power tools, lighters, and household
chemicals.
 This agency is responsible for a 30%
decline in consumer injuries or death
over the last 30 years.
Federal Trade Commission (FTC)
 The FTC works to ensure the nations
financial markets are vigorous,
efficient, and free of restrictions that
harm customers.
 One of the primary areas of focus is
enforcing laws and regulations
concerning unfair advertising.
Federal Trade Commission (FTC)
 Some additional responsibilities of the
FTC:
– Enforce federal antitrust laws.
– Enforce consumer protection laws that
prevent fraud, deception, and unfair
business practices.
– Conducts economic research.
www.ftc.gov
Department of Transportation
(DOT)
 Established in 1966 to:
– Serve the United States by ensuring a
fast, safe, efficient, accessible and
convenient transportation system that
meets our vital national interests and
enhances the quality of life of the
American people, today and into the
future
www.dot.gov
Department of Transportation
 The DOT supervises the following:
– Federal Aviation Administration
– Federal Highway Administration
– Federal Railroad Administration
– Federal Transit Administration
– Maritime Administration
– National Highway Traffic Administration
 The USDA assists the following:
– America’s farmers and ranchers
– USDA leads the Federal anti-hunger effort with
the Food Stamp, School Lunch, School
Breakfast, and the WIC Programs.
• USDA is the steward of our nation's 192 million
acres of national forests and rangelands
– USDA brings housing, modern communications,
and safe drinking water to rural America
www.usda.gov
USDA
• USDA is the country's largest conservation
agency, encouraging voluntary efforts to protect
soil, water, and wildlife on the 70 percent of
America's lands that are in private hands.
• USDA is responsible for the safety of meat,
poultry, and egg products.
• USDA is a research leader in everything from
human nutrition to new crop technologies that
allow us to grow more food and fiber using less
water and pesticides.
 The FDA sets and maintains purity &
safety standards for foods, drugs,and
cosmetics.
– Researches contents of new health and
drug products.
– Inspects food and health aid manufacturing
plants.
– Ensures accurate product labeling.
– Removes unsafe products from the market.
www.fda.gov
Food and Drug Administration
 The FDA regulates the following:
– Safety of the nations blood supply
– Cosmetics
– Drugs
• Product approvals
• Over the counter (OTC) prescription drug
labeling
• Drug manufacturing standards
Food and Drug Administration
– Foods
• Labeling
• Safety of all food products, except meat and
poultry. Who does this?
• Bottled water
– Medical devices
– Veterinary products
• Livestock feeds
• Pet foods, veterinary drugs, veterinary devices
United States Postal Service
 The USPS performs the following:
– Delivers mail to over 142 million homes,
businesses and post office boxes.
– Adds 1.8 million new addresses annually.
– Serves over 7 million customers daily at
38,000 post offices.
– Delivers over 206 billion pieces over mail
annually.
United States Postal Service
 The USPS regulates by enforcing laws
against fraud by mail:
• Receives complaints.
• Helps recover money.
• Provides information on common mail fraud
schemes.
www.usps.com
Department of Justice
 The mission of the Department of Justice is
to:
– Enforce the law and defend the interests of the
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United States
Ensure public safety
Control crime
Punish those guilty of unlawful behavior
Enforce immigration laws
Ensure fair justice for all Americans
Department of Justice
 The following are departments are
supervised by the DOJ.
– Attorney General
– Office on Violence Against Women
– Civil Rights Division
– Federal Bureau of Investigation
– Criminal Division
Department of Justice
– Drug Enforcement Administration
– Federal Bureau of Prisons
– United States Marshall Service
– Bureau of Alcohol, Tobacco, Firearms,
and Explosives
– United States Attorneys
www.usdoj.gov
Occupational Safety & Health
Administration (OSHA)
 OSHA's mission is to assure the safety and
health of America's workers by setting and
enforcing standards; providing training,
outreach, and education; establishing
partnerships; and encouraging continual
improvement in workplace safety and
health.
www.osha.gov
 The EPA was established by the White
House and congress in July of 1970.
 The EPA was created in response for
the public’s demand for cleaner water,
air, and land.
 The EPA’s mission is to protect human
health and the environment.
www.epa.gov
Securities Exchange Commission
 The primary mission of the SEC is to
protect investors and maintain the
integrity of the securities, stocks and
bonds, markets.
– Promoting disclosure of information.
– Enforcing securities laws.
– Protecting investors in the marketplace.
– Creating a “level playing field.”
Securities Exchange Commission
 The SEC oversees:
– Stock exchanges.
– Broker / Dealers.
– Investment advisors.
– Mutual Funds.
– Public Utility Holding Companies.
www.sec.gov
State Consumer Protection
Agencies
Public Utilities Commission
 The purpose of regulation of public utilities
is to ensure that adequate service may be
provided at reasonable rates.
 In fixing rates, the commission must be fair
to public utilities and their customers.
 The commission regulates more than 1,791
utility companies in North Carolina.
http://www.ncuc.commerce.state.nc.us/
Public Utilities Commission
 The Public Utility Commission regulates:
– Electric companies
– Telephone companies
– Natural gas companies
– Motor freight carriers
– Motor passenger carriers
– Water and sewer companies
– Ferryboat operators
Licenses
 All businesses operating in the state of
North Carolina must possess a business
license.
 The North Carolina Department of
Commerce administers the program.
 The purpose is to ensure all businesses
are registered for taxation purposes.
http://www.nccommerce.com/servicenter/blio/faq/
Private Consumer Protection
Organizations
 The Consumer Report Mission:
– Test
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We buy all the products we use as test samples.
We receive no special treatment
We accept no free samples.
More than 100 testing experts work in seven
major technical departments
• We also survey our millions of readers to bring
you information on numerous products.
Consumer Reports
– Inform
• Consumer Reports magazine has about 4 million
subscribers.
• We reach millions more consumers through
ConsumerReports.org,
– Protect
• Our research and testing uncovered dangers that
led to the Flammable Fabrics Act, the Child
Protection and Toy Safety Act, and many
product recalls, government standards, and
regulations.
www.consumerreports.org
 The BBB exists to persuade businesses
to remedy problems, or fulfill promises,
for a product or service in question.
 The BBB gets involved with consumer
problems when a significant number of
complaints are made about a product or
service.
http://www.bbb.org/
Better Business Bureau
 The BBB's Core Services include:
– Business Reliability Reports
– Dispute Resolution
– Truth-in-Advertising
– Consumer and Business Education
– Charity Review
Conclusion
 Should consumers use the rights and
responsibilities provided by the
government?
 Do we need consumer protection
agencies in our country?
 What might happen without consumer
protection agencies?
Vocabulary Review
 Consumer Protection
Agencies
 Consumer Information
Center
 Consumer Product Safety
Commission
 FTC
 DOT
 USDA
 Consumer Reports
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FDA
USPS
DOJ
OSHA
EPA
SEC
Public Utilities
Commission
 Licenses
 Better Business
Bureau