5B : consumer protection

Question 1

list why consumers need protection from businesses exploration

Answer 1

• profit : businesses over charge to make as much as profit ass possible .

• misleading advertising : businesses make false claims about their products to increase profit .

• reducing costs : product that are unsafe and defective as businesses reduce costs

Question 2

what are consumer protection laws ?

Answer 2

laws designed to protect consumer from unscrupulous firms covering safety of goods , labelling and untruthful claims about product or service .

Question 3

what are some examples of consumer laws ?

Answer 3

• trades description act : goods must be as described e.g. leather shoes must be made out of leather

• consumer protection : laws that make sure that businesses act fairly towards their customers

• sale & supply of goods act : goods must be of satisfactory quality e.g. hairdryer must dry hair safely

Question 4

what are the effects of protection on businesses ?

Answer 4

• increased costs : changing production methods to ensure products are safe will raise costs .

• quality control :legislation will cause businesses to ensure the quality of goods are better and sold in the correct quantities
( cannot sell damaged goods )

• customer complaints : firms set up customer complaint departments . to deal with problems before legal systems get involved .

Question 5

what happens when one business supplies over 25% of the market ?

Answer 5

• a monopoly is formed. the government regulates these businesses to ensure that they do not exploit customers .

Question 6

what does the competition & market authority (CMA) do ?

Answer 6

• investigate any business that restricts fair competition e.g. investigate mergers, enforce consumer protection.