CR - Consumer Rights Module Overview

Consumer Rights Module Overview

Introduction

You are the consumer. Businesses cannot survive without you deciding that their product or service is good enough for you to purchase for a reasonable price. So, why wouldn't you be protected? Oh, that's right, you are! How are you protected? Well, in this module, you will learn about your rights as a consumer, legislation passed to protect consumers, and the government agency that helps you avoid fraudulent business practices.

Essential Questions

• What is fraudulent business practice?
• Should I buy this product/service?
• What are some wise consumer practices?
• What laws are in place to protect consumers?
• What is the FTC and its role?

Key Terms

Consumer protection: Federal and state statutes governing sales and credit practices involving consumer goods.

Fraud: A deception deliberately practiced in order to secure unfair or unlawful gain.

Arbitration: The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision.

Deceptive trade practice: A practice was deemed unfair when it (1) offended public policy as defined by statutes, Common Law, or otherwise (2) was immoral, unethical, oppressive, or unscrupulous and (3) substantially injured consumers.

The Federal Trade Commission (FTC): Is the nation's consumer protection agency. The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace.

Price Fixing: An agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms.

Monopoly: Exists when a specific person or enterprise is the only supplier of a particular product or service.

Sherman Act: Made it illegal for companies to limit competition by price fixing.

Clayton Act: Prevented mergers or acquisitions that were likely to control prices, stifle competition, and create a monopoly.

FTC Act: Create and gave power to investigate and stop unfair methods of competition and deceptive practices.

Express Warranty: An oral or written promise that states a product has a certain quality or performance.

Implied Warranty: Given by all sellers and imposed by law but does not have to be stated to be effective.

Consumer Financial Protection Bureau (CFPB): Works to provide information to consumers to help them make wise financial decisions.

Full Warranty: An express warranty that requires seller to repair or replace a product without cost to the buyer within a reasonable time (usually 1 year).

Limited Warranty: Anything that provides less protection than a full warranty that must be disclosed.

Puffing: Exaggerated sales talk that does not count as a warranty.

Warranty of Title: The seller owns the product that he or she is selling and has the title to transfer to the buyer.

Warranty Against Encumbrances: Ensures that no third party can claim the property or any balances on it at the time of delivery.

Warranty of Fitness for a Particular Purpose: Requires the product to be able to do what the seller says it can do.

Warranty Against Infringement: Guarantees goods are free of patent, copyright, and trademark infringement.

Disclaimer: Notice of exclusion for a warranty, must be in writing and must be noticeable.

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