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The Best Review On The Planet > Consumer Protection and Product Liability > Flashcards

Consumer Protection and Product Liability Flashcards

1
Q

Years ago: Caveat Emptor

A

“Let the buyer beware”
-Shoppers had few ways to seek compensation for damages

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2
Q

Today: Caveat Venditor

A

“Let the seller beware”
-Society demands manufacturers to be held responsible for foreseeable injuries

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3
Q

Federal and State Consumer Protection Laws

A

-Apply to transactions between consumers and people conducting business

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4
Q

Federal and State Consumer Protection Laws DO NOT APPLY IF…

A

-You acquire a product from another consumer
-You buy a product to use in a business

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5
Q

Consumer

A

-Someone who buys or leases goods, real estate, or services for personal, family, or household purposes

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6
Q

State Consumer Protection officers

A

-Mediate complaints
-Conduct investigations
-Prosecute offenders of consumer laws
-Advocate for consumer rights

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7
Q

Federal Administrative Agencies

A

-Applies to businesses that sell real estate, goods, or services in interstate commerce (business in more than one state)

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8
Q

Federal Administrative Agencies: FTC

A

-Federal Trade Commision
-Promotes free and fair trade competition
-Regulates false advertising

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9
Q

FTC: Cease and desist orders

A

-The FTC has the power to issue cease and desist orders
-Legally binding orders to stop a practice that may mislead the public

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10
Q

FTC: Counter-advertise

A

-The FTC may also require a company to counter advertise
-New advertising to inform the public about the earlier false information
-Corrects the earlier false claims

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11
Q

Federal Administrative Agencies: Bureau of Consumer Protection

A

-Safeguards consumers against unfair, deceptive, and fraudulent practices

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12
Q

Unfair and Deceptive Practices

A

-Any acts that may mislead consumers

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13
Q

Deceptive false advertising

A

-Occurs if a reasonable consumer would be mislead by the advertising claim
-Vague generalities and obvious exaggerations are sales puffery- ALLOWED
-When it appears to be based on factual evidence that cannot be scientifically proved, it will be deemed deceptive

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14
Q

Half-Truths

A

-The information in the advertisement is true but incomplete and, therefore, leads consumers to a false conclusion

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15
Q

Bait-and-Switch Advertising

A

-Advertising a very low price for a particular item that will likely be unavailable to the consumer and then encouraging them to purchase a more expensive item

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16
Q

Fraudulent Misrepresentation

A

-Any statement that deceives the buyer

17
Q

Work-At-Home Schemes

A

-Among the oldest kind of advertising fraud
-Often promises big incomes without explaining the cost

18
Q

Unordered merchandise

A

-Under state and federal laws, unordered merchandise may be considered a gift
-You can keep it without paying for it
-It is illegal for anyone who sends free samples to include a bill

19
Q

Negative Option Rule

A

-Any type of sales term or condition that allows a seller to interpret the customers silence, or failure to take an affirmative action, as an acceptance of an offer
-If the customer doesn’t want it they must tell the seller by the deadline

20
Q

The Telemarketing Sales Rule

A

-Protects consumers from abusive telemarketers

-Requires a telemarketer to identify themselves, describe the product, and disclose all material facts

(Total cost, any restrictions, and whether a sale is considered final)

21
Q

The Cooling-Off Rule

A

-Allows buyers to cancel door-to-door sales contracts within a certain period of time (3 days)
-Applies to purchases $25 or more made at their place of living/work

22
Q

The Cooling-Off Rule does NOT apply to:

A

-Real estate contracts
-Insurance contracts
-Security contracts
-Emergency home repairs

23
Q

Telephone, Mail-Order, Fax or Online Sales

A

-Seller must ship goods within the time they promise

-If shipping time is not stated, they must ship within 30 days after receiving an order

Seller must notify the buyer of any delay in shipment

-Buyer can cancel if these are not met

24
Q

If you feel you are a victim of an unfair or deceptive practice:

A

-Speak to the business owner/manager
-Write a complaint letter

25
Q

Product Liability

A

-Manufacturers, sellers, and suppliers of goods can be held responsible if a product proves to be unsafe and someone is injured

26
Q

Strict Liability

A

-Makes manufacturers/ suppliers responsible for selling goods that are unreasonably dangerous

-Do NOT have to prove a negligent act on the part of the manufacturer/seller

*Also true when the user is not the one who bought the item

27
Q

Strict Liability: The following must be proved:

A
  1. The manufacturer/seller was engaged in the business of selling the product
  2. The product was unreasonably dangerous to the user/consumer
  3. The defective condition was the cause of the injury/damage
  4. The defective condition existed when the product left the hands of the manufacturer/seller
  5. The consumer suffered physical harm or property damage as a result of using the product
28
Q

The Consumer Product Safety Act

A

-Protects consumers from unreasonable risk of injury while using consumer products that are sold in interstate commerce

29
Q

The Consumer Product Safety Act: Defects in products are divided into 3 categories:

A
  1. Manufacturing defects
  2. Poor design
  3. Inadequate instructions/warnings about the safe use of the product
30
Q

Food, Drug, and Cosmetic Act

A

-Prohibits the manufacturer and shipment of faulty products in interstate commerce
-Protects consumers against food, drug, and cosmetics that are injurious, adulterated, or misbranded

31
Q

Injurous

A

-If it contains any substance that may be harmful to health

32
Q

Adulterated

A

If it contains any substance that will reduce its quality or strength below minimum standards

33
Q

Misbranded

A

-If its labeling or packaging is misleading/false

34
Q

FDA and USDA

A

-Food and Drug Administration and US Department of Agriculture

-Regulate food labeling
-Require where the food originated on meat, veggies and fruits

-Requires all restaurant chains with 20 or more stores to post caloric content and post guidelines on the daily calorie average

35
Q

BBB

A

-Better Business Bureau
-A Non- government agency that:

-Hears consumer complaints at the local and state levels
-Tries to steer consumers to reliable business

36
Q

BBB Mission

A

To promote highly ethical relationships between businesses and the public

-Provides:
Businesses past dealing
Helps resolve complaints
Provides info on charities

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