Ch. 44 (Consumer Law)

Fair Packaging and Labeling act

1) ID the food product itself 2) The net quantity of the contents (and, if the number of servings is stated) the size of each serving) 3) The Manufacturer 4) The Packager or distributor (by knowing this it makes it easier for the consumer or FDA to go pursue a lawsuit)

The Fair debt collection Practices Act (Pg. 873)

Attempts to curb perceived abuses by collection agencies. A collection agency may not do 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 (for example, at three o'clock in the morning) or at any time, if the debtor is being represented by an attorney. 3) Contract 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 example) 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 at any time after receiving notice that the debtor is refusing to pay the debt expect to advise the debtor of further action to be taken by the collection agency.

CAN-SPAM Act

Congress passed the federal CAN-SPAM Act to combat the problems associated with unsolicied commercial e-mails, commonly referred to as spam

The Federal Trade Commission Act

Created the FTC to carry out the broadly stated goals of preventing unfair and deceptive trade practices, including deceptive ads.

Consumer Credit Proteciton Act

Disclosure law that reuires sellers and lenders to disclose credit terms and loan terms so that individuals can shop around for the best finacning arrangemetns.

The Fair and Accurate Credit Transactions Act

Effort to combat ID theft

The Consumer Product Safety Act

Established the Consumer Product Safety Commission (CPSC). Which conducts research on the safety of individual consumer products and maintains a clearinghouse on the risks associated with various products. 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. The CPSC frequently works in conjunction with manufacturers to voluntarily recall defective products from stores. 4) Require manufacturers to report on any products already sold or intended for sale if the products have proved to be hazardous. 5) Administer other Product-Safety Legislation, including the Child Protection and Toy Safety Act of 1969 and the Federal Hazardous Substances Act of 1960.

Half truths

Failure to tell the full picture. Ex: Cample soup advertised that it was low and fat in cholesterol which is good for preventing heart disease, but failed to tell that it was high in sodium, which is bad for cholesterol

Bait and Switch

One of the most important rules, is from the FTC's "Guides Against Bait Advertising" Advertising a very low price for a particular item that will likely be unavailable to the consumer, who will then be encouraged to purchase a more expensive item.

The FTC's "cooling-off" laws

Permits the buyers of goods sold door to door to cancel their contracts within three business days. The FTC rule further requires that consumers be notified in Spanish of this right if the oral negotiations for the sale were in that language.

Telephone Consumer Protection Act (TCPA)

Prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice. True or False, it doesn't matter as along as it is unsolicited.

TheNutrition Labeling and Education Act

Requires standard nutrition facts (including the amount and type of fat that the food contains) to be listed on food labels and regulates the use of such terms as fresh and low fat.

Regulation Z

Requires terms of must be clearly and conspicuously disclosed A lender must disclose the APR, finance charge, amount financed, and total payments (the sum of the amount loaned, plus any fees, finance charges, and interest at the end of the loan) The TILA provides for rescission (cancellation) if a creditor fails t follow the exact procedures required by the act.

Hypertouch, Inc. v. ValueClick, Inc.

The California statute is not pre-empted by the CAN-SPAM Act and The Sup court reversed the lower court's decision and remanded the case for trial.

Online Sales

The FTC and other federal agencies have brought numerous enforcement actions against those who perpetrate online fraud (see the discussion of wire fraud in Chapter 10).

The Federal Food, Drug, and Cosmetic Act.

The act protects consumers against adulterated (contaminated) and misbranded foods and drugs. -Food safety -Tainted Foods - Modernization Legislation -Drugs

Online Deceptive Advertising

Three basic rules 1) all ads - both online and offline - must be truthful and not misleading 2) The claims made in an ad must be substantiated that is ads must have evidence to back up claims 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."

Usury

When a lender charges a rate of interest highwer then what is legally permissable

Backgroung: Paduano v. American Honda Motor Co.

in 2004 Gaetano Paduano bought a new Honda Civic Hybrid in CA. The info label on the car stated that the fuel economy estimates from the EPA were 47 MPG for city driving and 48 MGP for highway driving. Honda had a sales brochure that said "Just drive the Hybrid like you would a conventional car and save on fuel bills" Paduano got angry when he found that the car's fuel economy was less than half of the EPA's estimate When Handa refused to take the car back Paduano filed a suit in a CA State court against the automaker, alleging deceptive advertising in violation of CA's consumer legal remedies act Handa argued that the federal energy policy and conservation act prescribed the EPA's fuel economy estimate. The court ruled in Handa's Favor. **Decision: the state intermediate appellate court concluded that the federal law did not preempt Paduano's claim concerning Hand'a ads. The court reversed the lower court's judgment and remanded the case.

Deceptive Ads

occurs if a reasonable consumer would be misled by the ads claim. vague generalities and obvious exaggerations where permissible. "Puffery"