Book Opener

Consumer Protectionl How to explain themain differencesbetween state andfederal consumerprotection lawl How to describe twounfair and deceptivepracticesl How to recognize baitand switch advertisingl How to identifyfour Federal TradeCommission rules thatprotect consumersKnowledge of consumerprotection laws willprevent you from fallingvictim to fraud anddeception.l caveat emptorl caveat venditorl consumerl unfair and deceptivepracticel fraudulentmisrepresentationl cease and desistordersl bait and switchl cooling-off rulel telemarketersThe Development of ConsumerProtection LawYears ago, smart shoppers understood the Latin phrase, caveatemptor , which means, “let the buyer beware.” The reason is that consumerswho bought faulty merchandise in the past had few ways to seekcompensation for damages other than through the contract law discussedin Unit 2. When they were injured by dangerous products, they oftenhad no recourse because they were not in privity of contract withmanufacturers.Society, however, now demands that manufacturers be held responsiblefor foreseeable injuries to people who use their products. Lawshave changed, and the phrase that now guides consumer transactions iscaveat venditor , which means, “let the seller beware.”Federal and State ConsumerProtection LawsConsumer protection laws apply to transactions between consumersand people conducting business. A consumer is someone who buys orleases goods, real estate, or services for personal, family, or householdpurposes. When you buy a ticket to a concert or rent skis for personal usefrom a business, consumer protection laws protect you. However, if youacquire the same things from another consumer, then consumer protectionlaws in most states do not protect you. Nor do consumer protectionlaws protect you if you buy a product to use in a business.State consumer protection offices provide information and helpenforce state consumer protection laws. Sometimes the offices assistconsumers with individual problems. Consumer protection offices arelocated in state and county offices, and in some cities, in the mayor’soffice.Federal consumer protection law applies to businesses that sell realestate, goods, or services in interstate commerce, or business activitythat touches more than one state.Example 1. Levina Yepez grows vegetables on her farm, and shesells them to a local store and at her roadside stand. Because herbusiness is local, federal consumer protection law does not apply.316 Unit 3: Understanding Consumer Law