Ch. 39 Consumer and Environmental Law

Fair Debt Collection Practices Act (FDCPA)

A Collection agency may not do any of the following: 1. Contact the debtor at the debtor's place of employment if the debtor's employer objects. 2. Contact the debtor at inconvenient or unusual times (such as three o'clock in the morning), or at any time if the debtor is being represented by an attorney. 3. Contact third parties other than the debtor's parents, spouse, or financial adviser about payment of a debt unless a court authorizes such action. 4. Harass or intimidate the debtor (by using abusive language or threatening violence, for instance) or make false or misleading statements (such as posing as a police officer). 5. Communicate with the debtor at any time after receiving notice that the debtor is refusing to pay the debt except to advise the debtor of further action to be taken by the collection agency.

Toxic Torts

A civil wrong arising from exposure to a toxic substance such as asbestos, radiation, or hazardous waste.

Nuisance

A common law doctrine under which persons may be held liable for using their property in a manner that unreasonably interferes with others' rights to use or enjoy their own property.

Environmental Impact Statement (EIS)

A formal analysis required for any major federal action that will significantly affect the quality of the environment to determine the action's impact and explore alternatives. Analyzes the following: 1. The impact that the action will have on the environment. 2. Any adverse effects on the environment and alternative actions that might be taken. 3. Irreversible effects the action might generate.

Regulation Z

A set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth-in-Lending Act. Applies to any transaction involving an installment sales contract that calls for payment to be made in more than four installments.

Amendments to TILA's Credit-Card Rules

Added the following protections: 1. A company may not retroactively increase the interest rates on existing card balances unless the account is sixty days delinquent. 2. A company must provide forty-five days' advance notice to consumers before changing its credit-card terms. 3. Monthly bills must be sent to cardholders twenty-one days before the due date. 4. The interest rate charged on a customer's credit-card balance may not be increased except in specific situations, such as when a promotional rate ends. 5. A company may not charge fees for being over the credit card's limit except in specified situations. 6. When the customer has balances at different interest rates, payments in excess of the minimum amount due must be applied first to the balance with the highest rate (for instance, a higher interest rate is commonly charged for cash advances). 7. A company may not compute finance charges based on the previous billing cycle (a practice known as double-cycle billing, which hurts consumers because they are charged interest for the previous cycle even if they have paid the bill in full.)

Bait-and-Switch Advertising

Advertising a product at an attractive price and then telling the consumers that the advertised product is not available and encouraging them to purchase a more expensive item.

Deceptive Advertising

Advertising that misleads consumers, either by making unjustified claims about a product's performance or by omitting a material fact concerning the product's composition or performance.

Consumer Laws

All statues, agency rules, and common law judicial decisions that attempt to protect the interests of consumers.

Equal Credit Opportunity Act (ECOA)

Amended the TILA, prohibits the denial of credit solely on the basis of race, religion, national origin, color, gender, marital status, or age. Prohibits credit discrimination on the basis of whether an individual receives certain forms of income, such as public assistance benefits.

Cease-and-Desist Order

An administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.

Multiple Product Order

An order requiring a firm that has engaged in deceptive advertising to cease and desist from false advertising in regard to all the firm's products.

FTC Guidelines for Online Businesses

Basic Requirements: 1. All advertisements both online and offline, must be truthful and not misleading. 2. The claims made in an ad must be substantiated - that is, advertisers must have evidence to back up their claim. 3. Ads cannot be unfair, which the FTC defines as "likely to cause substantial consumer injury that consumers could not reasonably avoid and that is not outweighed by the benefit to consumers or competition." 4. Ads must disclose relevant limitations and qualifying information underlying the claims. 5. Required disclosures must be "clear and conspicuous" because consumers may not read an entire Web page, an online disclosure should be placed as close as possible to the claim being qualified. Generally, hyperlinks to a disclosure are recommended only for lengthy disclosures. If hyperlinks are used, they should be obvious and should be places as close as possible to the information they qualify.

POM Wonderful, LLC v. Federal Trade Commission

Case 39.1 Pg. 897

Lexmark International, Inc. v. Static Control Components, Inc.

Case 39.2 Pg. 900

United States v. O'Malley

Case 39.3 Pg. 914

Consumer Product Safety Act

Comprehensive regulatory scheme over consumer safety matters and the Consumer Product Safety Commission. (CPSC)

CPSC

Conducts research on the safety of individual products and maintains a clearinghouse on the risks associated with various products. Authorized to: 1. Set safety standards for consumer products 2. Ban the manufacture and sale of any product that the commission believes poses an "unreasonable risk" to consumers. 3. Remove from the market any products it believes to be imminently hazardous. 4. Require manufacturers to report any products already sold or intended for sale that have proved to be hazardous. 5. Administer other product-safety legislation, including the Child Protection and Toy Safety Act and the Federal Hazardous Substances Act.

Selected Areas of Consumer Law Regulated by Statutes

Exhibit 39-1 Pg. 896

Affordable Care Act

Included provisions aimed at combating the problem of obesity in the united states. All restaurant chains with twenty or more locations are now required to post the caloric content of the foods on their menus so that customers will know how many calories the foods contain.

Cooling-Off Laws

Laws that allow buyers of goods sold in certain transactions to cancel their contracts within three business days. FTC rule requires that consumers be notified in Spanish if the oral negotiations were in Spanish

False Advertising Claims under the Lanham Act

Must Establish: 1. An injury to a commercial interest in reputation or sales. 2. Direct causation of the injury by false or deceptive advertising. 3. A loss of business from buyers who were deceived by the advertising.

Counteradvertising

New advertising that is undertaken to correct earlier false claims that were made about a product.

Astroturfing

Posting fake reviews of products and services online in return for payment.

Telephone Consumer Protection Act (TCPA)

Prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice. Makes it illegal to transmit ads via fax without first obtaining the recipient's permission. Enforced by the Federal Communications Commission (FCC) fine of 11k PER DAY towards companies that violate "junk fax" provisions.

Mail or Telephone Order Merchandise Rule

Protects consumers who purchase goods via mail, telephone, internet, or fax.

Food Safety Modernization Act

Provides greater government control over the U.S. food safety system.

Clean Air Act

Provides the basis for issuing regulations to control multistate air pollution.

Energy Policy and Conservation Act (EPCA)

Requires automakers to attach an information label to every new car. Must include the Environmental Protection Agency's fuel economy estimate for the vehicle.

Nutrition Labeling and Education Act

Requires food labels to provide standard nutrition facts and regulates the use of such terms as Fresh and Low Fat

The Fair Packaging and Labeling Act

Requires that food product labels identify: 1. The product 2. The net quantity of the contents 3. The manufacturer 4. The packager or distributor

Truth-in-Lending Act

Title 1 of the Consumer Credit Protection Act, a disclosure law, administered by the Federal Reserve Board and requires sellers and lenders to disclose credit terms or loan terms so that individuals can shop around for the best financing arrangements.

Fair and Accurate Credit Transactions (FACT) Act

combats identity theft, national fraud alert system so that consumers who suspect that they have been or may be victimized by identity theft can place an alert in their credit files.

Telemarketing and Consumer Fraud and Abuse Prevention Act (TCFAPA)

established rules governing telemarketing and to bring actions against fraudulent telemarketers.

Clean Water Act (used to be FWCPA)

established the following goals: 1. Make waters safe for swimming 2. Protect fish and wildlife. 3. Elminate the discharge of pollutants into the water

Federal Food Drug and Cosmetic Act

protects consumers against adulterated and misbranded foods and drugs.

Fair Credit Reporting Act (FCRA)

protects consumers against inaccurate credit reporting and requires that lenders and other creditors report correct, relevant, and up-to-date information.

Telemarketing Sales Rule (TSR)

requires telemarketer to: .-Identify the seller's name -describe the product being sold -disclose all material facts related to the sale Makes it illegal to: -misrepresent information or facts about their goods or services. Must removes consumer's name from call list if requested. Established National DO NOT CALL registry.

National Environment Policy Act (NEPA)

requires that an environmental impact statement be prepared for every major federal action that significantly affects the quality of the environment.

Safe Drinking Water Act

requires the EPA to set maximum levels for pollutants in public water systems. Requires each supplier of drinking water to send an annual statement describing the source of its water to every household it supplies.

Environmental Protection Agency (EPA)

the primary agency regulating environmental law.