LAW 2810 Chapter 24

Caloric Content of Restaurant Foods

- All restaurant chains with twenty or more locations are required to post the caloric content of the foods on their menus. - Vending machine foods must be labeled so that their caloric content is visible.

Under the FTC guidelines, bait-and-switch advertising occurs if the seller:

- refuses to show the advertised item. - fails to have a reasonable quantity of the item in stock. - fails to promise to deliver the advertised item within a reasonable time. - Discourages employees from selling the advertised item.

For food labeling, fair packaging and labeling act requires food product labels to identify

- the product - the net quantity of the contents and, if the number of servings is stated, the size of a serving. - the manufacturer - the packager/distributor, plus savings claims, components of nonfood products, and partial filling.

Truth-in-Lending Act

(TILA) is the name given to Title I of the Consumer Credit Protection Act, as amended. The TILA is basically a disclosure law that is administered by the Federal Reserve Board.

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. - the act provides that consumer credit reporting agencies may issue credit reports to users only for specified purposes (such as the extension of credit).

To state a successful claim for false advertising under the Lanham Act, a business must establish each of the following:

- An injury to a commercial interest in reputation or sales. - Direct causation of the injury by false or deceptive advertising. - A loss of busies from buyers who were deceived by the advertising.

Under the FDCPA, a collection agency may not

- contact debtor at his place of employment, if employer objects. - contact debtor during inconvenient or unusual times, or at any time debtor is being represented by an attorney. - contact third parties other than the debtor's parents, spouse, or financial adviser about payment of a debt, unless a court authorizes such action. - harass or intimidate the debtor or make false or misleading statements.

Equal Credit Opportunity

Congress enacted the Equal Credit Opportunity Act (ECOA) as an amendment to the TILA.

Formal Complaint

If the FTC concludes that a given advertisement is unfair or deceptive, it sends a formal complaint to the alleged offender.

Application

It only applies to people who lend funds, sell on credit, or arrange an extension of credit in the ordinary course of business.

Deceptive Advertising

Occurs if a reasonable consumer would be misled by the advertising claim

False Advertising Claims under Lanham Act

The Lanham Act protects trademarks and also covers false advertising claims.

Which departments issue most food label requirements?

The U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).

Fair Debt Collection Practices Act (FDCPA)

attempts to curb abuses by collection agencies. A creditor that is attempting to collect a debt is not covered by the act unless it misrepresent itself as a collection agency to a debtor.

All statutes, agency rules, and common law judicial decisions that serve to protect the interests of consumers are classified as

consumer law

The Consumer Financial Protection Bureau (CFPB) is the agency that

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

Amendments to Credit-Card Rules

- A company may not retroactively increase rate on existing card balances, unless the account is sixty days delinquent. - A company must provide 45 days advance notice to consumers before changing the credit-card terms. - Monthly bills must be sent to cardholders 21 days before the due date. - 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. - A company may not charge over limit fees except in specified situations.

Enforcement of the FDCPA

- A debt collector who does not comply with the act is liable for actual damages, plus additional damages not to exceed $1,000 and attorneys' fees. - Debt collectors who violate the act are exempt from liability if they can show that the violation was unintentional and resulted from a bona fide error.

FTC Orders and Remedies

- If the FTC succeeds in proving that an advertisement is unfair or deceptive, it usually issues a cease-and-desist order to the company. - The FTC may also impose a sanction known as counter advertising that requires the company to inform the public about the earlier misinformation.

Online Deceptive Advertising

- The FTC monitors web sites for deceptive claims involving everything from medical treatments to exercise equipment. - 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."

Regulation Z includes

- any transaction that has four or more payment installments. - transactions that include installment loans, car loans, and home-improvement loans. - all credit instrument terms must be clearly and conspicuously disclosed including the annual percentage rate (APR), finance charge, amount financed, and total payments (loan amount, plus any fees, finance charges, and interest).

Equal Credit Opportunity Act includes

- credit cannot be denied solely on the basis of race, religion, national origin, color, gender, martial status, or age. - prohibits credit discrimination on the basis of whether individual receives certain forms of income. - a creditor may not require a cosigner if the applicant qualifies for the amount and terms of the credit request based on the creditor's standards of creditworthiness.

Fair and Accurate Credit Transactions Act (FACT)

- purpose of the act is to combat identity theft - established a national fraud alert system that allows consumers to place an alert on their credit file. - requires major credit reporting companies to provide consumers with a free credit report every 12 months. - Account numbers on credit-card receipts can no longer obtain the consumers' names and full credit-card numbers.

Claims based on half-truths

A "half-truth" is true but incomplete information that may lead consumers to a false conclusion.

Remedies for Violations of the Fair Credit Reporting Act

A credit reporting agency that fails to comply with the act is liable for actual damages, plus additional damages not to exceed $1,000 and attorney's fees.

Bait-and-Switch Advertising

Advertising a product at an attractively low price to lure customers in to buy more expensive items.

Claims that appear to be based on factual evidence

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

The Federal Trade Commission Act created the ___________________ to carry out the broadly stated goal of preventing unfair and deceptive trade practices, including deceptive advertising.

Federal Trade Commission (FTC)

Consumer Notification and Inaccurate Information

If denied credit, consumer has right to source of any information used by the credit agency, as well as the identity of anyone who has received an agency's report.

Automobile Fuel Economy Labels

The Energy Policy and Conservation Act (EPCA) requires automakers to attach an information label to every new car. Labels must include the Environmental Protection Agency's fuel economy estimate for the vehicle.

Nutritional Content of Food Products

The Nutrition Labeling and Education Act requires food labels to have standard nutrition facts and regulates the use of such terms as fresh and low fat.

Credit Card Rules

The TILA limits consumer liability for credit card debt in cases of stolen cards to $50.

Disclosure Requirements

The TILA's disclosure requirements are contained in Regulation Z.

Puffery

Vague generalities and obvious exaggerations are permissible and not considered deceptive.

Damages When Consumers are Injured

When a company's deceptive ad involves wrongful charges to consumers, the FTC may seek other remedies including damages.

Restitution Possible

When a company's deceptive ad leads to wrongful payments by consumers, the FTC may seek restitution.

Federal Trade Commission Actions

When the FTC receives numerous and widespread complaints about a particular problem, it will investigate.