Consumer Protection Flashcards
define consumer protection
the government has passed laws and set up organisations to ensure businesses conduct themselves and offer protection to consumers to increase consumer confidence to purchase.
give 8 reasons for protecting consumers against exploitation and there explanations
profit motive -
main motive for businesses is to earn profit
can lead to overcharging customers for unsatisfactory products/products which aren’t fit for purpose
ensuring the safety of products may increase a business’s costs
can be seen in monopoly market structure where consumers have little power
unsafe/defective products -
businesses seek to reduce costs which can lead to unsafe and defective products
misleading info./unfair advertising -
some businesses make false claims, especially during advertising, about their products to increase sales
pressurised sales tactics -
some businesses charge large amounts of interest to give credit to customers/pressure customers into signing agreements to purchase goods they do not want or need
businesses must be licensed to offer credit or risk exploitation
some carry out aggressive tactics that are unfair to customers eg saying a product is only available for a limited time
online buying is misleading -
seven day cooling off periods are allowed to that customers can cancel contracts
globalisation -
consumers need protection from goods coming from abroad which may have been produced to standards below those required by the UK/EU
description of goods -
goods do not always match their description eg fake goods sold on streets
scientific advances -
new products being developed regularly
proper testing needs to be carried out before sold
eg genetically modified products/pharmaceuticals
give 8 legislations that affect businesses and explain them
Sale and Supply of Goods Act -
goods must be acceptable quality
must be safe
last for a reasonable amount of time
be fit for their intended purpose
nothing wrong with them unless defect was noted
Data Protection -
controls the use of information stored on computers
consumer details can’t be sold to other businesses without consent
Consumer Protection -
laws aimed at making sure businesses act fairly towards their customers
eg Distance Selling Act was introduced to protect consumers who purchase goods over the internet
Consumer Protection from Unfair Trading Regulations -
criminal offence for businesses to engage in unfair business practices such as making untrue statements about a product/service and using aggressive sales techniques such as harassment
Trade Description Act -
goods and services must perform in the way advertised by the business
false info. must not be given about the product
Consumer Credits Acts -
controls the way that businesses lending money operate
Environmental Protection -
laws to protect the environment eg Clean Air Act but it is expensive to install filtration systems
Competition Policy -
ensures that fair competition takes place in each industry
what is the role of the ombudsman?
ombudsman services are available for various industries and offer complaints procedures for dissatisfied consumers
set up by the government and free for consumers to use
give some examples of ombudsman services
health service ombudsman
legal services ombudsman
energy ombudsman
when can consumers complain to ombudsman services?
once they have tried to resolve the dispute with the business and followed up any other complaints procedure
they are the last port of action and call before any legal action takes place
what is the trading standards department?
all local authorities have this
it is responsible for checking that local businesses are complying with the various trading laws
how do trading standards officers do their job?
visit businesses and carry out spot checks
investigate whether goods are correctly described, priced clearly and sold in the correct quantities
ensure no counterfeit goods are being sold
can prosecute businesses if necessary
what is the Competition and Markets Authority? (CMA)
set up by the government
investigate takeovers, mergers, and anti-competitive practices, bring criminal proceedings against individuals who commit cartel offences, enforce consumer protection legislation to tackle practices and market conditions that make it difficult for consumers to exercise choice and cooperate with sector regulators and encourage them to use their competition powers
give 5 ethical issues related to consumer protection
subliminal advertising -
placing fleeting/hidden images in films/TV programmes in the hope that viewers will process them unconsciously, now it is banned
product placement -
when a company pays a TV channel/programme to include its products, it is allowed but rules are set by Ofcom on how it should be done eg not on children’s programmes and alcohol/cigarettes not be allowed
unhealthy snacks -
used to be by supermarket tills, now has largely changed to fewer impulse purchases to reduce pester power from kids
usual for brands/businesses to target expensive brands at children
cigarette smoking declined in developed countries so major tobacco businesses discount their prices to win customers in developing countries
