FIN 240-chapter 21

CPSC (Consumer Product Safety Commission)

-Conducts research on the safety of individual consumer products -Maintains a clearinghouse on the risks associated with various products (under consumer product safety act)

Labeling and packaging laws

-Labels must be accurate -Labels must use words that are easily understood by the ordinary consumer

Which of the following actions can the Federal Trade Commission (FTC) employ against unfair and deceptive advertising?

-counteradvertising sanction -cease and desist order

The remedies available to injured consumers under federal and state consumer protection laws may include:

-damages for actual injury or harm caused -attorney's fees and costs -punitive damages

What are two functions of the Consumer Product Safety Commission (CPSC)?

-to ban the manufacture and sale of hazardous products -to set the safety standards for consumer products

Which of the following actions are associated with the Consumer Financial Protection Bureau (CFPB)?

-writing and enforcing rules for financial institutions -collecting and tracking consumer complaints

Federal Trade Commission Act

A banner accomplishment of Woodrow Wilson's administration, this law empowered a standing, presidentially appointed commission to investigate illegal business practices in interstate commerce like unlawful competition, false advertising, and mislabeling of goods. (created Federal Trade Commission 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.

Claims that appear to be based on factual evidence:

Advertising that appears to be based on factual evidence but, in fact, is not reasonably supported by evidence will be deemed deceptive

The Affordable Care Act

All restaurant chains with twenty (20) 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.

Consumers Legal Remedies Act

CLRA declares unlawful several "methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer".

The agency that oversees the credit practices of banks, mortgage lenders, and credit card companies is called the:

Consumer Financial Protection Bureau

The Fair Credit Reporting Act

Consumers are permitted to access the information about them contained in a credit reporting agency's files

Which of the following consumer credit acts examines lenders' practices regarding race, religion, national origin, color, gender, marital status, or age?

Equal Credit Opportunity Act (ECOA)

Federal Food, Drug, and Cosmetic Act-Recalls of tainted foods

In response to the problem of food contamination, congress enacted and added the Food Safety Modernization Act (FSMA) to the FDCA to provide greater government control over the U.S. food safety system

Counteradvertising

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

The Fair Debt Collection Practices Act

Prohibits unfair, abusive, and deception methods of collecting debt

Federal Food, Drug, and Cosmetic Act-FOOD

Protects consumers against adulterated (contaminated) and misbranded foods and drugs

Claims based on half-truths:

Some advertisements contain "half-truth", meaning that the presented information is true but incomplete and may therefore lead consumers to a false conclusion

Federal Food, Drug, and Cosmetic Act-Drugs and medical devices

The FDA is responsible under the FDCA for ensuring that drugs are safe and effective before they are marketed to the public

Online deceptive advertising

The FTC actively monitors online advertising and has identified hundreds of websites that have made false or deceptive claims for products and services

Which of the following consumer credit acts helps potential borrowers understand the cost of a loan?

Truth-in-Lending Act (TILA)

Consumer Financial Protection Bureau (CFPB)

agency that oversees the credit practices of banks, mortgage lenders, and credit-card companies

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

When a product is advertised for sale at a greatly reduced price, but the salesperson tries to get customers to buy a more expensive item instead, this is called:

bait and switch

Deceptive practices

deceptive pricing, deceptive promotion, deceptive packaging (Advertising products as "Made in the U.S.A." when substantial parts of the product come from another country)

The role of a state's attorney general in handling complaints about potential violations of consumer protection laws is to:

ensure a safe and fair marketplace for the citizens of the state

A consumer product is any article, or its component parts, produced or distributed for sale to a consumer:

for the consumer's own use or enjoyment

Puffery

promotional statements and claims that express subjective rather than objective views, which no 'reasonable person' would take literally" (seattle's best coffee)

Consumer law

protects consumers from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and other such practices