Chapter 19: Consumer Protection

The FDCPA requires the debt collector to send certain information to the consumer within 5 days of the initial communication

1. Amount of debt 2. Name of the creditor to whom the debt is owed 3. A statement that unless the consumer disputes the validity of the debt within 30 days, the debt collector will assume the debt is valid 4. A statement that the debt collector must show proof of the debt if the consumer advises the debt collector within 30 days of the notification that the consumer disputes the debt

Regulation B

A creditor may not make statements related to a prohibited basis to discourage a person from applying for credit

Standards for Health Claims

Food labels must meet standards for words commonly used so that consumers can learn more about what they are buying

Fair and Accurate Credit Transaction Act (FACT Act)

It requires the major credit reporting services to allow consumers to see their credit reporting services (Experian, TransUnion, and Equifax) to allow consumers to see their credit reports annually for free.

The U.S. Department of Agriculture (USDA)

Primary responsibility for sanitation of meat, poultry, and eggs

"Fresh"

Refers to raw food that has been processed, frozen, or preserved

Fair Credit Reporting Act

Regulates credit bureaus (consumer reporting agencies) It focuses on confidentiality and accuracy in consumer credit reports.

Food Safety Modernization Act (FSMA)

Strengthens FDA food safety control powers. Includes more frequent inspection of food facilities, domestic and foreign, is still a work in progress

Fair Credit Billing Act (FCBA)

The FCBA addresses the following problems: 1. In case of a billing error, a consumer must notify the creditor in writing within 60 days of the billing of a disputed charge. The creditor must answer the complaint within 30 days of receipt and has 90 days to resolve the problem and notify the consumer 2. In prohibits the mailing of unsolicited credit cards 3. It establishes procedures to report lost or stolen credit cards. Liability for unauthorized charges is $50

Restrictions Imposed

The FDCPA regulates the conduct of about 5,000 independent debt collections agencies that collect billions of dollars each year from consumers

Consumer Rights

The FRCA gives consumers the right to see information reported about them that plays a role in credit being denied Credit Bureaus must: 1. Respond to consumer complaints about inaccurate information within 30 days 2. Tell consumers, on request, who has asked for copies of their credit history 3. Provide a toll-free consumer service number 4. Get the consumer's permission before giving a report to an employer or before releasing a report containing medical information

Learned Intermediary Doctrine

The physician - would be liable for misuse of the product. Drugs given to a patient.

Equal Credit Opportunity Act (ECOA)

added to CCPA to prohibit credit discrimination on the basis of race, sex, color, religion, national origin, marital status, receipt of public benefits, the good-faith exercise of the applicant's rights under any part of the CCPA, or age Creditors are prohibited from using such criteria, known as prohibited bases, in determining creditworthiness

Consent decree

contains the terms of a settlement, which frequently include prohibition of certain practices, redress for consumers, and payment of civil penalties

"low calorie"

fewer than 40 calories per serving and per 100 grams of food

Truth-in-Lending Act (TILA)

requires creditors in consumer transactions to disclose basic information about the cost and terms of credit to the consumer-borrower

Nutrition Labeling and Education Act

requires the FDA to issue nutrition labels for hundreds of thousands of products

The Federal Trade Commission (FTC)

to help enforce the antitrust law but also devotes resources to its Bureau of Consumer Protection which handles matters such as deceptive business advertising and marketing practices

"light" or "lite"

used on foods that have one-third fewer calories than comparable products similarly "organic"

Consumer Credit Protection Act (CCPA)

An umbrella law containing several credit-related laws. The laws provide rights for consumers and put requirements on creditors including the following: 1. creditors must disclose all relevant terms in credit transactions (truth in leading) 2. Procedures for correcting inaccurate and disputed bills and charges must be provided (fair credit billing) 3. Credit-reporting agencies must provide accurate information in consumer reports (fair credit reporting) 4. Creditors may not use certain personal characteristics, such as sex or race, in determining a person's creditworthiness (equal credit opportunity) 5. Abusive debt collection techniques are prohibited (fair debt collection practices)

Lanham Act

Any person who, or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device ... or any false designation "of origin, false or misleading description of fact, or any false or misleading representation" of fact, which 1) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or 2) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

Unfair and Deceptive Acts or Practices

Congress ordered the FTC to fight "unfair and deceptive acts or practices"

Fair Debt Collection Practices Act

Creditors have the right to collect debts they are owed. If not repaid, under state law, they may go to court and ask for an order to GARNISH (set aside a portion of) the wages of the debtor to pay . the debt.

Enforcement Activities

FDA can force existing products to be removed from the market if claims are misleading or if new information becomes available that indicates the product is not as safe as previously thought

Medical Devices

FDA is responsible for oversight of medical devices Medical device is an instrument, machine, implant, or other article used in the diagnosis or treatment of a disease in humans or animals Class I devices present minimal potential for harm to the user and are usually simply such as bandages and gloves Class II devices are subject to special controls. Devices are generally noninvasive, including X-ray machines, wheelchairs, and surgical materials Class III Devices like heart valves and bone implants

Nutrients by Serving Size

FDA regulations list over 100 categories of food, from soup to nuts, whose nutrients must be listed by standard serving size as defined in the regulation. The following must be listed per serving portion on labels as percentage of Daily Values (DV) based on a 2,000 or 2,500-calorie diet

Advertising Substantiation Program

It requires adverting and advertising agencies to have a reasonable basis before they make claims FTC considers the following factors to determine what a reasonable basis is: 1. The kind of product 2. The type of claim 3. The consequences of a false claim and the benefits of a truthful claim 4. The cost of developing substantiation for the claim 5. The amount of substantiation that experts believe is reasonable

Consumer Credit Card Act

It restricts certain practices by credit card companies: 1. Issuers may not raise interest rates on an existing balance and promotional (low) rates must be last at least six months 2. When companies raise rates, they must give cardholders 45 days' notice 3. Restrictions are placed on late fees and when they are imposed; no more than one fee may be charged in a billing cycle if a debtor goes over the card limit; and there may not be charges for Internet or telephone access when making payments 4. Cards may not be issued to consumers under age 21 unless they have independent means of income or get someone over 21 to consign on the account 5. Finance charges may not be imposed on both the current and previous balance (double- cycle billing) 6. Payments made on a credit card must be applied to the highest interest rate portion of the debt first. 7. Statements must be sent at least 21 days before a payment is due Gift cards may not expire at least five years

"low fat"

Means three or fewer grams of fat per serving and per 100 grams of the food

Kefauver Amendment

Requires the FDA to approve drugs based on their proven effectiveness - not just on their safety

Trade Regulation Rules

Section 18 of the FTC ACT, the Commission may issue trade regulation rules that set boundaries for practices when problems are common Proposed rule must be published in the Federal Register so it becomes the part of the Code of Federal Regulations

Electronic Fund Transfer (EFT)

Services are available to consumers. Such transfers are larger in volume than are the funds transferred by check and cash. They include: 1. ATM deposits or other transactions 2. Direct deposits of paychecks 3. Debit cards used to buy goods or services 4. Automatic bill-paying services 5. Telephone transfers to credit cards (presuming a written agreement exists)

Food Quality Protection Act

States that FDA is to ensure a "reasonable certainty of no harm"

Deception policy statement

Summarizes a three part test for deciding whether a particular act or practice is deceptive. The following are true: 1. There is a misrepresentation or omission of information in a communication to consumers 2. The deception is likely to mislead a reasonable consumer 3. The deception is material it is likely to be misleading to the detriment of consumers

Regulating Advertising Claims

The FTC policy about advertising states that: 1. Advertising must be truthful and non deceptive 2. Advertisers must have evidence to back up their claims 3. Advertisements cannot be unfair

Food and Drug Administration (FDA)

is charged with monitoring food and drug safety

Dodd-Frank Act

legislation passed in 2010 aimed at reforming the banking industry and offering consumers greater protection