Personal Finance Ch. 6
When using the research-based approach for purchasing described in this chapter, which actions do you believe are overlooked by most shoppers?
, not seeking information from several sources, not comparison shopping, not identifying several alternatives, and not carefully analyzing the alternatives.
How does a service contract differ from a warranty?
A service contract is a paid agreement for repairs. A warranty is a feature offered by a manufacturer or distributor.
A consumer wants to settle a dispute out of court with the use of a legally-binding third party.
ARBITRATION
A group of telephone customers were overcharged by $1.10 a month over the past 22 months.
CLASS ACTION SUIT
In what situations can comparing prices help in purchasing decisions?
Comparing prices can be helpful when buying expensive or complex items, when competing brands are available, when different package sizes are available, and when product quality varies.
What maintenance activities could increase the life of your vehicle?
Frequent oil changes, regular tune-ups, and checking belts, hoses, and fluids regularly can minimize major repairs and maximize vehicle life.
What actions are appropriate when buying a used car?
Identify sources of used vehicles, research and compare prices, determine the condition of vehicle, and decide which options are desired.
Describe situations in which you might use the services of a lawyer.
If a consumer situation is complicated or involves a large sum of money, the use of a lawyer may be appropriate. Situations might include a product injury case, settling an estate, purchase of real estate, adoption of a child, or a divorce.
A low-income person wants to obtain the services of a lawyer to file a product-liability suit.
LEGAL AID SOCIETY
When might leasing a motor vehicle be appropriate?
Leasing may be appropriate for business use or when a new vehicle is desired every few years.
How does arbitration differ from mediation?
Mediation is the involvement of a third party to suggest solutions in a dispute; arbitration is a legally binding decision by a third party made once the two parties in dispute agree to the process.
How can most consumer complaints be resolved?
Most consumer complaints are solved by contacting the store or company
What are common causes of consumer problems and complaints?
Not being informed in advance of factors such as warranties, service availability, prices at various stores, or cost of installation can result in consumer complaints. Also, not asking questions and not obtaining details in writing are common causes of consumer problems.
A person is attempting to obtain a $150 deposit for catering that was never returned.
SMALL CLAIMS COURT
In what types of situations would small claims court and class-action suits be helpful?
Small claims court is helpful for minor consumer problems that require legal action. Class action suits can provide legal assistance to a group with the same consumer complaint.
What are potential concerns associated with obtaining furniture, appliances, and other items from a rent-to-own business?
These businesses typically charge very high prices when buying the item over time with "easy, low" payments.
What is a "certified preowned" vehicle?
These reconditioned vehicles receive extensive servicing that brings their quality above the typical used car.
What are the benefits and drawbacks of a certified preowned vehicle?
While these are more expensive, the assurance of quality is a benefit
What types of brands are commonly available to consumers?
brand name, store brand, and private-label products.
covers only aspects of the item purchased
express warranty
covers fixing or replacement of a product for a set time period
full warranty
covers a product's intended use; may not be in writing
implied warranty
usually in a written form
limited warranty
What are the major sources of consumer information?
personal contacts, business organizations, media information, independent testing organizations, online sources, and government agencies
While fraud usually involves deceptions against consumers, what are some "frauds" that consumers commit against business?
returning purchases as new after using the item or wearing the clothing, using expired coupons, eating food items in stores without paying for the item, buying an item in one store at a low price and returning at another store for a higher price, shoplifting.
commonly referred to as an extended warranty
service contact
