Chapter 32: Consumer and Environmental Law

Food product labels must identify

(1) the product, (2) the net quantity of the contents, (3) the manufacturer, and (4) the packager or distributor.

Truth-in-Lending Act Credit-Card Rules

1) One TILA provision limits the liability of a cardholder to $50 per card for unauthorized charges made before the creditor was notified of the lost card. 2) Another provision requires credit-card companies to disclose the computation method that is used to determine the outstanding balance and to state when finance charges begin to accrue.

Online Advertising Guidelines

1. All advertisements—both online and offline—must be truthful and not misleading. 2. The claims made in an ad must be substantiated. 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."

Fair Debt Collection Practices Act Requirements: Collection agencies may not

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 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 or make false or misleading statements. 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.

An Environmental impact statement (EIS) must analyze the following

1. Impact action will have on environment 2. Adverse effects/alternative actions 3. Irreversible effects action might generate

Superfund four primary elements

1. It established an information-gathering and analysis system that enables the government to identify chemical dump sites and determine the appropriate action. 2. It authorized the EPA to respond to hazardous substance emergencies and to arrange for the clean-up of a leaking site directly if the persons responsible for the problem fail to clean up the site. 3. It created a Hazardous Substance Response Trust Fund (also called Superfund) to pay for the clean-up of hazardous sites using funds obtained through taxes on certain businesses. 4. It allowed the government to recover the cost of clean-up from persons who were (even remotely) responsible for hazardous substance releases.

Potentially Responsible Parties (PRPs)

1. Person who generated wastes disposed at site 2. Person who transported waste to site 3. Person who owned/operated site 4. Current owner/operator of site

Consumer Product Safety Commission (CPSC) Authority

1. Set safety standards for consumer products. 2. Ban manufacture and sale of any product commission believes poses an "unreasonable risk" to consumers. 3. Remove from market any products it believes imminently hazardous. The CPSC frequently works with manufacturers to voluntarily recall defective products from stores. 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.

State Laws Concerning False Advertising

1. The defendant committed a deceptive or unfair act. 2. The act was committed in the course of trade or commerce. 3. The defendant intended that others rely on the deception. 4. The plaintiff suffered actual damages proximately caused by the deception.

Toxic torts

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

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.

Potentially responsible Party (PRP) Definition

A party liable for the costs of cleaning up a hazardous waste disposal site under the Comprehensive Environmental Response, Compensation, and Liability Act.

Regulation Z

A set of rules issued by the Federal Reserve Board of Governors to implement the provisions of the Truth in Lending Act.

Bait and Switch Advertising

Advertising a product at an attractive price and then telling the consumer that the advertised product is not available or is of poor quality and encouraging her or him to purchase a more expensive item.

Deceptive advertising

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

Federal Action

An action is "federal" if a federal agency has the power to control it.

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.

Fair Credit Reporting Act Remedies for Violations

Credit reporting agencies that fail to comply with the act are liable for actual damages, plus additional damages not to exceed $1,000 and attorneys' fees.

What All Labels Should Have

Labels must be accurate and use words that are understood by the ordinary consumer.

"Cooling-off" laws

Laws that allow buyers of goods sold in certain transactions to cancel their contracts within three (3) business days.

Counteradvertising

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

Environmental Protection Agency (EPA)

Primary agency regulating environmental law.

Fair and Accurate Credit Transactions (FACT) Act

The FACT act combats identity theft. 1) National fraud alert system 2) Free annual credit reports for consumers 3) Truncated credit card numbers on receipts

Negligence and Strict Liability

This action is based on a business's alleged failure to use reasonable care toward a party whose injury was foreseeable and was caused by the lack of reasonable care.

Nuisance

Under this common law doctrine, persons may be held liable if they use their property in a manner that unreasonably interferes with others' rights to use or enjoy their own property.

Consumer Notification and Inaccurate Information

When a consumer is denied credit or insurance on the basis of his or her credit report, the consumer must be notified of that fact.

Federal Trade Commission Actions

When the agency receives numerous and widespread complaints about a particular problem, it will investigate.

Fair Debt Collection Practices Act

attempts to curb abuses by collection agencies. The act applies only to specialized debt-collection agencies and attorneys who regularly attempt to collect debts on behalf of someone else, usually for a percentage of the amount owed.

The Telephone Consumer Protection Act (TCPA)

prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice.

The Equal Credit Opportunity Act (ECOA)

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

The Federal Food, Drug, and Cosmetic Act (FDCA)

protects consumers against adulterated (contaminated) and misbranded foods and drugs.

The 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.

Superfund

regulates the clean-up of disposal sites in which hazardous waste is leaking into the environment.

Truth-in-Lending Act (TILA) Application

requirements apply only to persons who, in the ordinary course of business, lend funds, sell on credit, or arrange for the extension of credit.

Truth-in-Lending Act Disclosure

requirements are found in Regulation Z and apply to any transaction involving an installment sales contract that has more than four installment payments.

Telemarketing Sales Rule (TSR)

requires a telemarketer to identify the seller's name, describe the product being sold, and disclose all material facts related to the sale. It is also illegal for telemarketers to misrepresent information or facts about their goods or services.

Truth-in-Lending Act (TILA)

requires sellers and lenders to disclose credit terms or loan terms so that individuals can shop around for the best financing arrangements.