MGT 220 Exam 4 (Chapter 19)

Under Section 43 of the Lanham Act

"any person who, in connection with any goods or services, ... in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of ... another person's goods or 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."

The FTC defines deception as

(i) a misrepresentation or omission of information in a communication to consumers (ii) that is likely to mislead a reasonable consumer and (iii) is material.

No prescription drugs

(those that can be obtained only with a physician's permission) may be marketed without FDA approval. The approval process is lengthy (14-15 years), expensive (costing more than $1 billion), and risky (only about 1 in 50,000 new drug compounds ever make it to market).

Food and Drug Administration

The FDA monitors and regulates food and drug safety. Note: the U.S. Department of Agriculture (USDA) works with the FDA and has primary responsibility for the sanitation of meat, poultry and eggs.

The FDA also performs enforcement activities

and can force products off the market for safety reasons or for misleading claims (hundreds every year).

Fair Credit Reporting Act (FCRA)

focusing on the accuracy and confidentiality of consumer credit reports.

Congress has passed numerous laws to regulate consumer credit, and a number of different agencies oversee the regulations

including the FTC and the Federal Reserve Board.

Consumer Leasing Act,

regulating consumer leases of personal property like cars and appliances.

Fair Credit Billing Act (FCBA)

requiring creditors to correct inaccurate or unauthorized charges.

In regulating advertising,

the FTC requires that advertisements be truthful and nondeceptive, have evidence to back up their claims, and not be unfair.

All states' attorney generals are also empowered by their states

to bring lawsuits against those involved in scams and fraudulent business practices.

Equal Credit Opportunity Act (ECOA

to prohibit unlawful discrimination in determining creditworthiness.

Fair Debt Collection Practices Act (FDCPA)

to reduce abusive, deceptive and unfair debt collection practices.

The FTC investigates trade practices that are claimed to be

unfair and deceptive.

Truth-in-Lending Act (TILA)

which requires creditors to disclose basic information about the cost and terms of credit.