Chapter 32: Consumer Protection

FCC

(Federal Communications Commission) regulates the television and radio industry, grants licenses to television and radio stations, and blocks monopolies; The FCC Declaration of Conformity or the FCC label or the FCC mark is a certification mark employed on electronic products manufactured or sold in the United States which certifies that the electromagnetic interference from the device is under limits approved by the Federal Communications Commission.

Lantham Act

1946 spells out what kind of marks and brandnames can be protected and exact method of protecting them; puffery vs advertising

Unconscionability

A defense that may allow a party to potentially avoid a contract on the grounds that she suffered a grossly unfair burden that shocks the objective conscience.

Ralph Nader

A leftist American politician who promotes the environment, fair consumerism, and social welfare programs. His book Unsafe at Any Speed brought attention to the lack of safety in American automobiles.; concerned of not having enough protection, adequate product testing, adequate warning

Equitable Remedies

A remedy that is available if there has been a breach of contract that cannot be adequately compensated through a legal remedy or to prevent unjust enrichment.; recession and restitution, specific performance, and reformation

Specific Performance

An equitable remedy requiring the breaching party to perform as promised under the contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique (for example, real property).

injunction

An order which legally prevents something

Penalties

Compensatory + Punitive Damages

Consumer

Consumer claiming violation has the burden of proving the statutory definition of consumer has been met

Expansion of Consumer Protection

Consumer may be defined as any person or entity that uses goods or services; statutes provide faster remedies; stautory formula for damages

Franchises

FTC requires franchises to give prospective franchises a disclosure statement

FTC

Federal Trade Commission. Protects consumers from misleading and fraudulent advertising. Reviews advertising claims. Can order a company to change their ad; FTC requires records to support statements made in ads; Corrective advertising; Franchise disclosure statement

Specially Manufactured Goods

Goods that buyers and lessees order that are to be manufactured to the buyer's or lessee's unique specifications

Remedies for Consumers

Government Agency Action Action by Attorney General Action by Consumer Replacement or Refund Invalidation of Consumer's Contract

Selling Methods

Home-Solicited Sales: Over $25 may be set aside within 3 business days

Credit Disclosures

Interest charges & annual percentage rate Truth in Lending Act Fair Credit & Charge Card Disclosure Act Home Equity Loan Consumer Protection Act Credit Card Accountability, Responsibility and Disclosure Act of 2009 New Bureau of Consumer Financial Protection created under the Dodd-Frank Wall Street Reform and Consumer Protection Act

Corrective Advertising

May be required by the FTC following false statements.

Labeling

Must give accurate product information that does not exaggerate or mislead

Deception

Not fraud is the critical element. Breach occurs without proof of intent to defraud or deceive. FTC requires records to support statements made in ads

Liable Under Consumer Protection Stautues

Persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved; i.e deceptive advertising/mortgage lending disclosure

Telemarketing Fraud

Telephone Consumer Protection Act + National Do Not Call Registry

Tort Theories

The weakest of the "at-will" exceptions include the intentional infliction of emotional distress and defamation

The Consumer Contract

a contract for the supply of goods or services, or for a sale or grant of interest in land, to an individual purchasing the goods, services or land for personal, domestic or household use; Form of Contract: regulated Contracts Printed on Two Sides: must include a warning notice Particular Sales and Leases: require specific disclosures Contract Terms: prohibit certain clauses Limitations on Credit: focus on subprime and predatory lending Unconscionability: prohibited

recession and restitution

a court order revoking a contract that would be unduly burdensome to fulfill

Reformation (Remedies in Equity)

court order correcting a written contract to conform with the original intent of the contracting parties

Contract Theory

if a contract exists, whether express or implied, that will control the employment arrangement

Surcharge Prohibited

seller cannot charge more for payment with a credit card

Automobile Lemon Laws

special laws for the protection of consumers buying automobiles that develop numerous defects; 3 TIMES; The Lemon Law in Connecticut covers drivers whose vehicles who suffer the same nonconformity or defect four or more times within the first 24 months or 24,000 miles;

Sale of Goods

transfer of title to tangible personal property for a price.3 This price may be a payment of money, an exchange of other property, or the performance of services.; regulated by Article 8 of the UCC; (2) insurance policies, commercial paper, such as checks, and promissory notes because they are regulated under Articles 3 and 4 of the UCC; and (3) real estate, such as houses, factories, farms, and land itself.

Service Contracts (Consumer Protection)

treated the same as a consumer sale of goods