Chapter 24

Amendments to the TILA's credit-card rules

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 over-limit fees 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. 7. A company may not compute finance charges based on the previous billing cycle (a practice known as double-cycle billing).

online requirements to prohibit deceptive advertising

1. All ads must be truthful and not misleading. 2. Advertisers must have evidence to back up their 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." 4. Ads must disclose relevant limitations and qualifying information concerning the claims advertisers are making. 5. Required disclosures must be "clear and conspicuous." If hyperlinks are used, they should be obvious and should be placed as close as possible to the relevant information it qualifies.

Under the 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 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.

bait-and-switch advertising occurs if the seller does any of the following:

1. Refuses to show the advertised item. 2. Fails to have a reasonable quantity of the item in stock. 3. Fails to promise to deliver the advertised item within a reasonable time. 4. Discourages employees from selling the advertised item.

CPSC's capabilities

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 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 ActFootnote and the Federal Hazardous Substances Act.

Fair Packaging and Labeling Act requires that food product labels identify

1. the product, 2. the net quantity of the contents (and, if the number of servings is stated, the size of a serving), 3.the manufacturer, and 4. the packager or distributor.

elements required to establish the Lanham Act

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.

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 (puffery)

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.

aimed at combating obesity. established by obamacare

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

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.

validation notice

An initial notice to a debtor from a collection agency informing the debtor that he or she has thirty days to challenge the debt and request verification.

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.

Truth-in-Lending Act (TILA)

It is administered by the Federal Reserve Board and requires sellers and lenders to disclose credit terms and loan terms so that individuals can shop around for the best financing arrangements.

"cooling off" laws

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

counteradvertising

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

Food Safety Modernization Act (FSMA)

The act gives the FDA authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.

Consumer law

The body of statutes, agency rules, and judicial decisions protecting consumers of goods and services from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and other such practices.

Fair Debt Collection Practices Act

attempts to curb perceived 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 Consumer Product Safety Act

created a comprehensive regulatory scheme over consumer safety matters and established the Consumer Product Safety Commission (CPSC).

Federal Trade Commission Act

created to carry out the broadly stated goal of preventing unfair and deceptive trade practices, including deceptive advertising.

Energy Policy and Conservation Act (EPCA)

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

Fair and Accurate Credit Transactions (FACT) Act

established a national fraud alert system to combat identity theft

Telephone Consumer Protection Act (TCPA)

prohibits telephone solicitation using an automatic telephone dialing system or a prerecorded voice. also makes it illegal to transmit ads via fax without first obtaining the recipient's permission

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

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.

FTC Mail or Telephone Order Merchandise Rule

protects consumers who purchase goods via mail, Internet, phone, or fax. Merchants are required to ship orders within the time promised in their advertisements and to notify consumers when orders cannot be shipped on time. If the seller does not give an estimated shipping time, it must ship within thirty days. Merchants must also issue a refund within a specified period of time when a consumer cancels an order.

The Lanham Act

protects trademarks and covers false advertising claims

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