Consumer Issues
Objective 5.01C
Students will understand
consumer protection agencies.
Rights of consumers were first identified by
President John F. Kennedy in a message to
Congress in 1962. Later presidents have added
additional rights to this “Consumer Bill of Rights.”
Activist against corporate carelessness and greed,
Ralph Nader brought attention to products that were
not safe for consumers. He gained national attention
in 1965 with his book, “Unsafe at Any Speed”. Known
as “Father of the Consumer Movement”
What Laws Protect Consumers?
Brainstorm with a partner.
Federal Laws/Agencies That Protect
Clayton Antitrust Act
Clean Air Act
Clean Water Act
CPSA-Consumer Product
Safety Act
EEOC-Equal Employment
Opportunity Commission
EPA- Environmental
Protection Agency
FCC- Federal
Communications
Commission
FDA – Food and Drug
Administration
FLSA – Fair Labor
Standards Act
FPLA -Fair Packaging &
Labeling Act
FTC -Federal Trade
Commission
ICC -Interstate Commerce
Commission
NLRB - National Labor
Relations Board
OSHA - Occupational
Safety and Health
Administration
Patent and Trademark
Office
Robinson-Patman Act
IRS -Internal Revenue
Service
TILA - Truth in Lending Act
UCC –Uniform Commercial
Code
USDA - United States Dept
of Agriculture
USPS – United States
Postal Service
Federal Trade Commission (FTC)
http://ftc.gov/
Prohibits deceptive and unfair trade
practices among businesses
Very broad act that created
numerous laws and agencies to
regulate special areas
Have you ever been deceived?
Key concept: FAIR TRADE PRACTICES
ADVOCATE for every US consumer
What are Unfair and Deceptive
Trade Practices?
Includes:
Price fixing on goods/services
Deceptive prices on service contracts
Door-to-Door Sales
Fraudulent Misrepresentation
Telemarketing Fraud
Work at home schemes
Illegal Lotteries
Scams
Gambling
Antitrust Laws
Purpose:
To foster competition and fair trade
To eliminate restraint of trade caused
by
Monopolies
Price fixing
Price discrimination
Q: Are all monopolies a bad thing for consumers?
Q: Why are some monopolies, such as utility companies, legal?
Sherman Antitrust Act - 1890
First antitrust law
Evolved from the “Robber
Baron” historical period
Clayton Antitrust Act - 1914
Clarifies laws, adds
penalties for monopolies,
fair trade, price fixing and
price discrimination
Robinson-Patman Act-1936
Protects small
businesses from price
discrimination
Antitrust Acts
United States Postal Service
(USPS) https://www.usps.com/
Established to
provide a
federal system
of mail
Protects
consumers from
mail fraud* with
federal USPS
regulations
* Example: chain letters
Federal Communications
http://www.fcc.gov/
Commission
Licenses and regulates
the operation of
Policies banning nudity,
expletives and other indecent
airwaves that are content on broadcast radio and
television
utilized in:
Ex: Janet Jackson 2004 Super
Television
Radio
Telephone
Telegraph
bowl Expose
Environmental Protection Agency
(EPA)
Boston’s “Green” Project
Responsible for
environmental
protection
Governs the
environmental laws
for air, water, solid
waste, toxic
substances,
pesticides, and
noise pollution
http://www.epa.gov
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Environmental Protection Agency
(EPA)
Manages all federal
antipollution programs
Handles air, solid waste,
toxic substances, and
pesticides
Sets guidelines for
program
Monitors programs
Establishes grants to help
eliminate pollution
Researches and sets
national standards for
programs
Issues permits
Standards for Lead in Paint
Record Setting 300 +mpg
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Clean Water Act
Purpose: Protects water
quality
Regulates water
quality standards for
rivers, lakes,
streams, and oceans
Helps to reduce
pollution in waterways,
rivers, oceans,
wetlands, wastewater
treatment plants, and
controls runoff
pollution
Protects the water for
swimming, fish, shell
fish, and wildlife in
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water
Clean Air Act
Established to protect public health and the
environment
Created by the US EPA to authorize the National
Ambient Air Quality Standards (NAAQS) to assist in
the creations of law to protect the atmospheric
environment
Sets quality standards for factories and auto
emissions
Handles problems such as acid rain, ground-level
ozone, smog, and air toxins
Weather channel gives air quality info daily- “air
particulates”
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Toxic Substance Control Act
Tracks industrial chemicals produced
and imported into the US
Governed by EPA
Screens, tests, and reports chemicals
that pose a threat to the environment
EPA can prohibit the manufacture or
import of chemicals thought to be
hazardous
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Labor Laws
Fair Labor Standards
Act:
Restricts child labor
Identifies
dangerous jobs
Minimum wage
Time and a half
overtime
Equal Pay Act: equal
pay for equal work
Social Security:
Contributions by
employee and
employer for
benefits
Worker’s
Compensation Act:
provides income or
health care
if illness caused by
job or injured on
the job
Labor Laws
Link: Civil Rights Act and the EEOC
Civil Rights Act of 1964:
Prohibits discrimination in employment
practices
Complain to the Equal Employment Opportunity
Commission (EEOC)
Laws Protecting Debtors
Set maximum
interest rates
Usury- state laws
that regulate the
maximum interest
rate legally
chargeable to
consumers
Truth in Lending Act
Requires full
disclosure of
interest and finance
charges over life of
loan
Limits chargeable
items on lost/stolen
credit cards to $50
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Laws Protecting Debtors
Equal Credit Opportunity Act
When applying for credit, decisions must be
made on:
*Ability to repay, based on evaluation of
application, including:
Income, current debt obligations, credit rating, dependents
*Cannot legally discriminate based on gender,
age, ethnicity, or religion
*Acceptance and rejection
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Based on income, current debts, or poor credit
record
If denied, applicant may request reasons in writing
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Product Liability
http://www.cpsc.gov/
Consumer Product Safety Act of 1972
Created the Consumer Product Safety
Commission (CPSC)
Sets product standards for hazardous products
Requires manufacturer or seller to test quality
and reliability before marketing product
Can require recall, repair, replacement or
refunding of the purchase price, of unsafe
products
Examples:
Children’s toys with dangerous parts
Defective vehicle tires that cause accidents
Food, Drug and Cosmetic Act
Created the Food and Drug Administration
(FDA)
Passed in 1903 after President Teddy
Roosevelt read “The Jungle” by Upton
Sinclair
Prohibits adulteration or mislabeling of
foods, drugs or cosmetics
Creates standards for packaged foods,
drugs and cosmetics
Approves new pharmaceuticals
(prescription drugs)
http://www.fda.gov/
Food and Drug Administration
FDA regulates packaged Food, Drugs,
Cosmetics including:
Inspecting production facilities for cleanliness
Setting standards of purity and quality
Approving ingredient lists as to fitness for
human consumption or use
Requiring labeling with manufacturer,
packager, distributor, weight & nutritional
information to assist consumer in informed
decision making
Food and Drug Administration
FDA discourages the sale of harmful
products through:
Imposing high taxes.
Issuing label or package warning.
Prohibiting the sale of the product.
Examples: tobacco, alcohol, saccharin, red
food dye
Can you name other examples?
United States Department of
Agriculture (USDA)
Regulates
preparation and sale of fresh produce,
meats and dairy products
Inspects
canners, packers and processors and
distributors for sanitary conditions and
handling
Inspects
products to ensure freedom from
disease and fit for human consumption
http://www.usda.gov/wps/portal/usda/usdahome
What could you do
with 90 Gatorade
bottles?
National Energy Conservation Policy Act - How can we be more efficient?
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Weights and Measures Division of
the National Institute of Standards
Promotes uniformity in weights and
measures laws, regulations, and
standards
Allows consumers to make
comparison shopping decisions such
as unit pricing
Examples: gas pumps, dispensing of
pharmaceuticals, measurement by
nurses, food weights and measurements
http://www.nist.gov/index.html
Division of Weights and Measures
The correct way to
weigh yourself:
“I can't believe I was
doing it wrong all
these years.
WE MUST SPREAD
THE WORD!”
Better Business Bureau (BBB)
http://nwnc.bbb.org/
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A private, non-government agency available at
local and state levels
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Logs complaints from consumers
Passes complaint information to businesses that are
members, frequently resolving issue
Makes complaints available for public viewing
Tries to steer consumers to reliable businesses that
conduct business ethically