Unit 7: Consumer Skills

early termination

under certain conditions a tenant may leave his or her rented residence before the lease ends

Consumer Groups

(n) people who buy the same thing, considered as a group (nhóm mua)

externality

(or transaction spillover) is a cost or benefit of a product that affects a person other than the buyer.

consumer rights

- The consumer has the right to be informed. -The consumer has the right to be safe. -The consumer has the right to choose. - The consumer has the right to voice complaints and have avenues for resolution.

Q: What if I cannot pay my rent on time?

A: Check your lease. It tells you the latest date each month you can pay your rent and the late fee you might have to pay. However, the landlord cannot remove you or your property from the unit without filing a lawsuit and getting a judgment from the court to do so. This judgment is called an eviction. As a tenant, you must be notified of such a lawsuit. You also have the right to explain to the court why you should not be evicted.

Q: I am having problems with my roommate. If I move out, am I still responsible for the lease?

A: Again, check your lease. Most likely you and your roommate both signed the lease and you are both responsible for it. Roommates should always discuss their individual responsibilities before signing a lease. You will probably have to talk to your landlord about your situation. He or she may allow you to have someone else take over your part of the lease.

consumer responsibilities and skills

- checking receipts and statements - contesting an incorrect bill - maintaining consumer vigilance - using consumer protection laws - using government consumer protection agencies - using private consumer protection groups

A lease is a written document that includes the following:

- the address and description of the rental unit - the dates the lease begins and ends (Six-month and one-year leases are common.) - information about the security deposit (This sum of money, usually equal to one month's rent, is held by the landlord during the lease. It is refunded to you when the lease ends and you move out, if you have not damaged the property.) - the amount of your rent, when it is due, and what it includes (Sometimes rent includes utilities, like electricity and gas. Other times the tenant must pay these bills in addition to rent.) - any restrictions, such as whether the landlord allows pets in the rental unit

a four-step process for consumers to address complaints

1) The first step is to return to the place of purchase. Go there with a polite but firm approach. This will usually solve the problem. 2) The second step is to contact the main office. Write a letter or e-mail. Most complaints to the company are resolved immediately. 3) If there is still no resolution, consumers can get help from a government or private consumer protection agency. 4)Once these other options have been tried, the consumer can take legal action, possibly in small-claims court.

Module 135:

3. Overview of Consumer Rights

Module 137: Understanding Contracts

A contract is a binding legal agreement that is enforceable by law. With many services or memberships, there will be a contract. It is important to read a contract so that you know what is included in it as well as your rights under the contract. Virginia law requires contracts to have certain components to be legal. The Federal Trade Commission helps prevent deceptive business practices. Individuals are also protected from deceptive business practices by state laws.

Copies

A copy of the health spa contract must be delivered to the buyer at the time of execution.

Q: I think my landlord may be refusing to renew my lease because of my disability. Is that legal?

A: Definitely not. Housing discrimination based on any of the following is illegal: - race - color - religion - national origin - gender - family status - age (but only if the tenant is 55 or older) - disability

Q: Can I break my lease?

A: Some leases allow early termination, meaning that, under certain conditions, you can leave before the lease ends. Regardless, you need to talk to the landlord. You might be able to sublease, or let another person move into the unit and take over the lease. Or you might work out some other deal with the landlord, such as letting him or her keep your security deposit. Do not abandon the unit. That could bring you legal problems.

Q: What do I have to do to get my landlord to make repairs?

A: The VRLTA Handbook defines the obligations of a landlord to make repairs. Your lease should specify the proper procedure for submitting repair requests to your landlord. Typically, a telephone call or e-mail will suffice, and the landlord will fix whatever is wrong in a reasonable amount of time. If there is too great a delay, send the landlord a certified letter to document your actions. If the landlord still does not make the repair, you can contact your local General District Court, which will help get the repair done.1 1 "Frequently Asked Questions Regarding Re

Q: When the term of my lease ends, can the landlord raise my rent on the next lease?

A: Yes, and by whatever amount he or she chooses. Of course, you do not have to agree to the higher rent and can choose to live somewhere else. Before your current lease ends, you should discuss the matter with your landlord.

Q: When my lease ends, can the landlord make me move out even if I do not have another place to live?

A: Yes, you and the landlord are bound by the dates set in the lease. Once that end date has passed, the landlord does not have to get involved in a new lease with you.

Q: I have moved, but my landlord still has not returned my security deposit. What should I do?

A: Your landlord may keep your security deposit, or part of it, for damages or any unpaid bills. However, your landlord must notify you in writing and list any expenses that are being deducted from your deposit. Otherwise, the landlord has 45 days to inspect the rental unit and return the deposit. In some areas, the landlord must also include interest on the deposit.

Q: Can my landlord come into my apartment any time?

A: Your landlord must give you reasonable notice before entering your unit. Your landlord may need to enter for the following reasons: to make repairs to inspect the property to show the property to possible buyers or new tenants If you deny access, the landlord can take you to the General District Court. Or if the landlord demands access for another reason, you can take him or her to court.

Module 139: Consumer Groups—Impact on Environmental Issues

Advocacy groups seek to level the playing field between the interests of consumers, labor, or the environment vs. the interests of business. Some of the earliest advocacy groups sought to educate consumers and laborers. These groups were also in the forefront of lobbying Congress to pass regulatory laws. Since the 1970s, they have used lawsuits and the courts to compel the enforcement of existing regulations.

consumer

An organism that obtains energy by feeding on other organisms

retirement

As people grow older and earn more money, they may be able to afford more things and begin planning and investing for______

The Better Business Bureau (BBB)

Better Business Bureaus help consumers and businesses by helping to keep businesses honest. They provide a forum for people to lodge complaints about businesses that use unfair or deceptive practices. BBBs encourage businesses by accrediting them for upholding their Code of Business Practices. Most communities have a local Better Business Bureau.

Cancellation (Buyer's Right to Cancel)

Cancellations within three business days guarantees the buyer a refund of all monies paid. Cancellations after three business days means the health spa may retain a portion of the contract price equal to the proportionate value of the services the buyer has already received.

financial products

Checking and savings accounts Credit cards Loans and mortgages Insurance Mutual funds

Consumer Complaint Program

Consumers with complaints about financial deals can contact the Fed, which will often send investigators to look into the complaints.

Community Affairs programs

Each Federal Reserve Bank has programs to educate consumers about their rights.

Signatures

Every health spa contract must have the signature of the buyer and the date the contract was executed.

Module 138: The True Cost of Goods

Externalities are unintended consequences of the production of a good or service. Because the cost of a negative externality is not borne by the producer or the consumer, free markets fail to prevent negative externalities. Government intervention in the form of regulation is necessary to correct a market failure. Congress passes regulatory laws and sets up regulatory agencies to enforce specific regulations.

Activity 138.2

Externality Match-up Exercise

Module 134: Becoming a Responsible Consumer

Financial data are available from a number of sources on the Internet: for-profit Web sites (".com"), educational sources (".edu"), government sources (".gov"), and not-for-profit organizations (".org"). If a Web site home page ends in ".com", you can assume the company hosting the site is trying to make money by steering you toward certain products. Therefore, the information provided may be unreliable. Banks, stockbrokers, financial advisors, and financial publications are other for-profit sources of information. Information from these sources may be good, but one should compare data from other sources, too.The financial services industry is like any other industry. Its participants are trying to sell you their financial products. Just as you test-drive and make price comparisons before you buy a car, consult a variety of sources for financial information and ask yourself, "Is this source trying to sell me something?"

public goods

Goods that are neither excludable nor rival in consumption

Category 1: Student loans for education

Here are some sources of information. The financial aid office of a college or university For information about student loans, start by calling the financial aid office of a college or university that you wish to attend. Many schools also include financial aid information on their Web sites.

Activity 139.1

How Consumer Groups Work Exercise

Module 136: Landlord Disputes

In this module, you learned about your rights and responsibilities as a tenant in Virginia.

A producer of beverages creates a glow-in-the-dark soda to attract young buyers. The substance that causes the beverage to glow is cheap but causes cancer. Which describes this scenario?

It is a market failure because the company making the soda makes a profit by producing a good with a negative effect for society.

Which describes a community that does not have a public library?

It is a market failure because the cost for the community to build the library is less than the benefits a library would give to the community.

A shipping company encourages its truck drivers to keep the engine running when the truck is parked for long periods of time. This is so that the drivers can have air conditioning. Which describes this situation?

It is a market failure because the individual truck driver pays only part of the costs of pollution and society pays other costs from pollution.

Which describes a county that raises taxes to build a hospital?

It is a public good because it provides medical services to all who might need them.

Which describes Interstate Highway 95, which reaches from Maine to Florida?

It is not a market failure because it is a public highway that is used by everyone and thus is a public good.

Activity 139.2

Know Your Consumer Groups

Module 135: Overview of Consumer Rights

Module 135 gave examples of consumer problems and remedies through laws and regulations, individual actions, and consumer protection agencies. You learned about consumer protection law and the major rights such laws protect. The module explained that consumers have responsibilities. Consumers need to learn about their rights and know steps they can take when they have a problem. Finally, the module focused on the consumer protection role of the Federal Reserve System and its protection of consumers in financial transactions.

Duration

No health spa contract shall have a duration for a period longer than 36 months.

Bureau of Consumer Protection

One federal agency that protects consumers is the Bureau of Consumer Protection, which is part of the Federal Trade Commission. The job of this bureau is to protect consumers against unfair, deceptive, and fraudulent business practices. Its Web site is www.ftc.gov. The Bureau of Consumer Protection protects consumers against identity theft, fraudulent marketing and advertising practices, and unfair financial practices. They also have a division to educate consumers about their rights under consumer protection laws. To enforce the laws, the Bureau either sues violators or works with the Justice Department to bring charges.

consumers

Organisms that eat living producers and/or other consumers for food.

Public Interest Research Groups (PIRGs)

Public Interest Research Groups started as student-run groups that lobbied the government for changes in social and environmental policies. Most states have a state PIRG organization, and many colleges and universities have PIRG chapters where students can become involved.7 The national organization, U.S. PIRG, supports many of the state PIRGs, and also raises funds for PIRGs and other advocacy groups.

Public Citizen

Ralph Nader (1934-) is an American lawyer, activist, and author. In 1965, Nader wrote "Unsafe at Any Speed," a book about how many American cars were very unsafe. Partly because of Nader's advocacy, Congress passed laws in 1966 that established the National Highway Safety Bureau (renamed the National Highway Traffic Safety Administration in 1970).2 Since that time, Nader has written many books and established many consumer advocacy groups that work for consumer protection in dozens of areas. The umbrella group for many of Nader's advocacy groups is Public Citizen (www.citizen.org), which Nader founded in 1971.3

Activity 136.3

Rent, Roommates, and Repairs Exercise

The American Association of Retired Persons (AARP)

The American Association of Retired Persons (AARP) is one of the most powerful advocacy groups in the United States. The AARP advocates for persons over 50 years old.4 They work to influence the government on Medicare and Social Security issues, as well as other matters that affect older people.

Environmental Protection Agency

The Environmental Protection Agency (EPA) is an independent agency of the federal government. The EPA issues regulations and enforces laws that protect the environment and the health of the citizens. Its Web site is www.epa.gov. The EPA's function is to prevent and clean up air, water, or land contamination. The EPA enforces the Clean Air Act and the Clean Water Act, and it supervises the cleanup of extremely polluted areas called Superfund sites. The agency also works to inform consumers about environmental issues, for example, by providing information on car fuel mileage and the efficiency (Energy Star) of electric appliances.

Community Reinvestment:

The Fed also looks into compliance with consumer protection laws. One law is the Community Reinvestment Act. According to this law, a bank must invest in its community. It must offer credit to people in low-income areas for affordable housing.

Truth in Lending:

The Fed enforces the Truth in Lending Act to be sure banks and other institutions offer detailed information about terms and costs of credit for products such as mortgages.

Food and Drug Administration

The Food and Drug Administration (FDA) is the federal agency charged with protecting the nation's public health by regulating products that can harm people's health. The FDA is part of the Department of Health and Human Services. Its Web site is www.fda.gov. The FDA regulates food, tobacco, prescription drugs, over-the-counter drugs, diet supplements and vitamins, medical devices (such as pacemakers and artificial limbs), devices that emit radiation, and cosmetics. It also regulates veterinary products and blood for transfusions.

National Consumers League

The National Consumers League is a consumer advocacy group that has worked for more than 100 years to make workplaces safe. According to its Web site, "The mission of the National Consumers League is to protect and promote social and economic justice for consumers and workers in the United States and abroad. The National Consumers League is a private, nonprofit advocacy group representing consumers on marketplace and workplace issues. We are the nation's oldest consumer organization."1 NCL provides government, businesses, and other organizations with the consumer's perspective on concerns including child labor, privacy, food safety, and medication information.

Occupational Safety and Health Administration

The Occupational Safety and Health Administration (OSHA) is part of the Department of Labor. This federal agency is responsible for enforcing the laws that protect workers. Its Web site is www.osha.gov. OSHA protects workers from death, injury, or sickness. It requires dangerous machinery to have guards, limits workers' exposure to dangerous substances, and determines what protective equipment their employers must provide. OSHA also mandates that workers be trained to avoid dangers in the workplace.

Did You Know?

The Office of the Attorney General enforces its state consumer protection laws. Nationally, the Federal Trade Commission oversees a wide variety of consumer protection laws. In 1938, Congress amended the Federal Trade Commission Act, in effect banning unfair and deceptive acts or practices.1 If a business activity occurs in more than one state, it is subject to this law.

regulations

The formal instructions that government issues for implementing laws.

Location

The health spa contract must disclose the physical location of the health spa.

Fee

The health spa contract must separately identify any initiation fee.

Dates

The health spa contract must state the starting and ending dates of the initial term of membership.

Refund

The health spa must make a refund of monies owed to the buyer within 30 days of the date of notification of cancellation.

Complaint

The health spa should notify the buyer about how he or she should attempt to resolve any complaint the buyer has with the health spa.

sublease

The transfer of part of the term of a lease, but not the remainder of it, to someone else.

Category 2: Personal loans

These include auto loans, credit cards, and home mortgages. Here are some sources of information. Banks Banks will list the rates and details of the terms only for the loans or accounts they offer. Credit unions Like banks, credit unions list the rates and details of the terms only for their loans or accounts. Because credit unions are not-for-profit institutions owned by their members, their rates tend to be lower than bank rates.

Category 3: Long-term savings and investing

This includes investing for home down payments, retirement investing, and other large investments. Internet sources Most companies that sell investment plans have Web sites that explain the importance of investing for your retirement. They are good sources of information about the different types of investments and the tax benefits that different retirement investments provide. Keep in mind that these companies want you to put your money in their investment plans. Look for sites that end in ".gov" or ".org" for information from government and not-for-profit sources.

security deposit

This sum of money, usually equal to one month's rent, is held by the landlord during the lease. It is refunded to you when the lease ends and you move out, if you have not damaged the property.2

Activity 137.1

Which One Does Not Belong? Exercise

VRLTA Handbook

a document published by the Virginia Department of Housing and Community Development that provides information on the rights and responsibilities of landlords and renters on the rental process

consumer protection law

a federal or state law designed to protect consumers against unfair business practices

perfect competition

a market structure in which a large number of firms all produce the same product

consumer advocacy organizations

advocacy groups that seek to protect consumers from corporate abuses such as unsafe products, unfair practices, false advertising, and pollution

consumer organizations

advocacy groups that seek to protect consumers from corporate abuses such as unsafe products, unfair practices, false advertising, and pollution

EPA

an independent federal agency established to coordinate programs aimed at reducing pollution and protecting the environment

Consumer organizations

are advocacy groups that seek to protect people from corporate abuse. This includes unsafe products, predatory lending, false advertising, and pollution. Consumer organizations have been operating for over one hundred years. These groups have had a profound effect upon consumer and environmental policy.

astroturf

fake grassroots organization

regulatory laws

federal or provincial statutes meant to protect the public welfare

financial information.

financial data which has been sorted, classified and summarised into a more usable and understandable form

positive externality

has a benefit

negative externality

has a cost

Office of Consumer Protection

investigates consumer complaints alleging unfair or deceptive trade practices

contract

is a binding legal agreement that is enforceable by law.

Sierra Club

is a large and influential advocacy group for the environment. They work to influence government policy to protect the environment, wilderness areas, and animals.6 The Sierra Club also conducts consumer advocacy to keep consumers informed about products and companies that affect the environment.

lease

is a legal agreement between a tenant and a landlord. Not all leases are the same, and you should read it carefully before signing.

Consumer Reports

is an organization that compares the quality and cost of thousands of items that consumers purchase. The organization is solely supported by subscriptions to their Web site and magazine. They do not accept advertising revenue, allowing their editors and testers to be completely neutral when they review products.5

tenant

is someone who pays rent in exchange for the right to live in a rental unit. A rental unit may be an apartment, a house, or some other sort of structure, like a duplex.

Federal Reserve System

is the United States' central bank. It has a Board of Governors and 12 Federal Reserve Banks, including one in Richmond, Virginia. The Fed monitors consumer protection laws and regulations for financial transactions. These include credit, charge, and debit cards and electronic fund transfers (including ATMs). Also included are deposit account transactions, mortgages and home loans, and lines of credit. The Fed tracks consumer questions and complaints in order to uncover unfair or illegal financial practices.

responsible consumer

is well informed

antitrust laws

laws that encourage competition in the marketplace

stock or bond

made money last year, this does not guarantee that it will continue to do so. Market conditions often change, and this can affect performance. A wide range of factors, such as weather patterns, political results, fashion trends, and new technology, can affect financial markets. Clearly, there may be a difference in year-to-year financial performance.

market failures.

market failures occur when the free market allows or even encourages conditions that are harmful to society as a whole. For example, a producer, pursuing the maximum profit from a product, creates conditions or byproducts that harm other people at no added cost to the producer.

Federal Trade Commission

monitors suspected anti-competitive business activities. In one case, a large drug company had a very specific ingredient in one of its drugs. Only certain suppliers knew how to produce it.

nonprofit

not in the business to make a profit; for charity

consumer protection agencies

organizations that protect consumers from fraud and deception

free market system

pure capitalism, in which all economic decisions are made without government intervention

market failures

situations in which the market does not lead to a desired result

lease agreements

that outline the responsibilities of the landlord and the tenant for a rental property.

consumer protection laws

that prevent services and businesses from doing whatever they want with their customers. Without a contract, a business could do unethical things.

regulatory agencies

that protect consumers, the environment, and workers. The Bureau of Consumer Protection and the Food and Drug Administration (FDA) protects consumers. The Occupational Safety and Health Administration (OSHA) protect workers and enforces laws governing workplace safety. The Environmental Protection Agency (EPA) protects the environment.

Stockbrokers

the people who sell shares in businesses

landlord

the person who owns the property that you rent