Consumer Rights And Responsibilities by xtq29964


									Consumer Rights
And Responsibilities
• Every consumer has certain basic rights
• In 1962, President Kennedy outlined what was
  called the Consumer Bill of Rights
• Consumer rights have received much attention
  since the beginning of the consumer movement
  in the 1960’s.
• Consumer rights come with certain
Consumer Bill of Rights
• Right to Safety
   – Consumers should be protected against goods that
     are hazardous to health and life.
• Right to be Informed
   – Consumers should be protected against fraudulent
     or misleading advertising, labeling, or sales
     practices. They should be given the facts needed to
     make informed choices.
      • Fraud is the deliberate deception designed to secure unfair
        or unlawful gain. (selling something as new, when it has
        actually been returned)
Consumer Bill of Rights
• Right to be Heard
  – Consumers should be assured that their interests
    will be considered in the making of laws.
• Right to Choose
  – Consumers should be assured access to a variety of
    goods and services at competitive prices.
     • When a business has no competition and control over the
       market for a good or service they are said to have a
Consumer Responsibilities
• Responsibility to use products safely
   – Consumers should use products as they were meant
     to be used and follow recommended procedures for
     care and maintenance.
• Responsibility to choose carefully
   – Consumers should use their buying power
     intelligently to encourage ethical business practices
     and safe, reliable products.
Consumer Responsibilities
• Responsibility to speak up
   − Consumers should keep themselves informed on
     consumer issues and let public officials know their
      • Consumers should be honesty with their complaints and
        should conduct themselves as upright citizens. (no
        shoplifting, dishonest returns, removal of tags, etc…)
• Responsibility to learn
   – Consumers should take advantage of every
     opportunity to develop consumer skills.
It’s Not Easy!
• Being a consumer is difficult when you have
  many choices.
• Grocery stores/dept. stores may have hundreds
  of options of different products on sale.
• Thankfully, there are many places to look for
  the best buy.
The Informed Consumer
• A wise consumer is an informed
   – In order to be an informed consumer,
     we must acquire information about
     products and services before buying
   – Consumers have to power to decide to
     buy or not to buy.
The Business Role
• Businesses go to great lengths to be
  responsive to the needs of the consumers.
• Without satisfied consumers, businesses
  would not make sales, earn profits, or
  perhaps remain in business.
Your Standard of Living
• People usually seek the highest standard
  of living that their incomes will allow.
  – You can get more for your money and raise your
    standard of living by becoming an informed
  – Your standard of living is probably determined
    more by how wisely you spend rather than by
    how much money you earn.
Consumer Information Organizations
Organizations or branches of organizations
 have been developed to help inform
  – They test products and offer advice
  – They publish magazines, award seals of
    approval, and endorse products for quality
    and safety.
Product Testing Organizations
• Their main purpose is to test
• Manufacturers pay private firms to
  perform safety tests on products.
• Underwriters Laboratory, Inc. (UL)
  – Tests electrical products for fire safety.
• Association of Home Appliance
  Manufacturers (AHAM)
• Consumer Reports
Deception and Fraud
• The difference between deception and fraud is
  a matter of degree.
• Advertising becomes deceptive when it
• Deceptive advertising or selling practices taken
  to extremes becomes fraud.
• Most advertising provides accurate product
• Trading Up: The practice of pressuring
  consumers to buy a more expensive
  product than they intended to.
• Sale Price: A sale is only a sale if the price
  is below the usual price. If the store
  recently sold the product at a higher
  price, then the lower price can legally be
  called a sale.
• Loss Leader: The item priced below cost
  to attract you to the store.
Deceptive Techniques Cont.
• Puffery: Exaggerated claims or descriptions of a
“extra-strength, ultimate fresh breath, made from
  the best stuff on earth”
Legal, but there is a thin line. It is considered
  harmless because it assumes that no reasonable
  person would take the exaggerations seriously.
  Also, since the terms mean different things to
  different people, it would be difficult to prove
  such advertising false. They cannot be
  measured or precisely defined.
According to law, a statement is fraudulent if it meets
   these two conditions:
1. The person who made the statement must
   know it is false.
2. The purpose of the statement must be to cause
   others to give up property that has value, such
   as money.
Fraud Techniques Cont.
• Bait and Switch: The practice of baiting
  consumers with an advertised but nonexistent
  bargain and then switching them to a more
  expensive product.
Chain Letters and Pyramid Schemes:
• Chain Letters: you are asked to send money to
  several people on a list. Add your name to the
  bottom; you are promised a big payoff. The
  only people making the money are at the top.
Fraud Techniques Cont.
• Pyramid schemes: people are led to believe
  they are starting a business and it requires an
  investment of money. They recruit others who
  are below them in the “chain”. The products
  they are “selling” are secondary to the money
  coming in from new pyramid members.
•     These schemes are fraudulent and illegal
  because their purpose is not to start a
  legitimate business but simply to get people to
  contribute money. They system cannot sustain
  itself mathematically.
Fraud Techniques Cont.
Referral Sales: You are promised a money rebate,
  prize, or discount if you provide names of
  fiends and acquaintances who are prospective
  customers. Such promises are illegal if actual
  payment of the rebate, prize, or discount is not
  made. Delaying payment pending a sale,
  presentation, or other even is also illegal.
  Sometimes the friends who names you supply
  are harassed by companies to purchase
  merchandise they do not want.
Fraud Techniques Cont.
Lowballing: Advertising a repair service at an
  unusually low price to lure customers, then
  attempting to persuade them that additional
  services are needed. You should stipulate that
  you do not want any repairs other than what is
  agreed upon. Do not pay for unauthorized
  work. Get a second opinion. Deal with
  reputable merchants. Shop around!
Other Forms of Fraud
• Healthcare products that promise to cure
  incurable diseases.
• Home-improvement contractors who want you to
  pay most of the cost before they do any work.
• Vacation clubs that require you to send money to
  join with the promise of inexpensive first class
  vacations later.
• Repair work offered at well below the going rate.
• Weight-loss programs that promise unrealistic
Keep from being victim by:
* Think for yourself and watch for tip-off
* Know what you need
* Do not give out your credit card number over
  the phone unless you know the organization is
* Take the time to make a decision before
  investing – research!
* Get promises in writing
* Check on the organization by written request
  or the Better Business Bureau or the state
  attorney general’s office.

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