Transcript BUSINESS LAW 3E, by Henry R. Cheeseman

Chapter 24
Consumer Protection and
Global Product Safety
Caveat Emptor
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The traditional
guideline of sales
transactions
“Let the buyer
beware.”
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Food, Drug, and Cosmetic Safety
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The Food, Drug, and Cosmetic Act
(FDCA) is administered by the Food and
Drug Administration (FDA).
FDCA provides a basis for the regulation
of the testing, manufacture, distribution,
and sale of foods, drugs, cosmetics, and
medicinal products in the U.S.
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Regulation of Food

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FDCA prohibits shipment,
distribution, or sale of
adulterated food.
Labeling
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FDCA prohibits false and
misleading labeling of food
products.
The Nutritional Labeling and
Education Act requires
disclosure of calories from
fat, amount of dietary fiber,
and other substances.
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Regulation of Drugs

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The FDA has authority to regulate the
testing, manufacture, distribution, and
sale of drugs.
The FDA has power to license new
drugs in the U.S.
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Regulation of Cosmetics
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Cosmetics include substances for
cleansing, altering the appearance of, and
promoting the attractiveness of a person.
FDA requires cosmetics to be labeled,
disclose ingredients, and contain warnings
if they are dangerous to health.
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Regulation of Medicinal
Devices

Medicinal Device Amendment to the
FDCA gives FDA authority to regulate
medicinal devices such as heart
pacemakers, kidney dialysis machines
defibrillators, surgical equipment and
other devices.
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Product Safety

The Consumer Product
Safety Act created the
Consumer Product Safety
Commission (CPSC).
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CPSC regulates potentially
dangerous consumer
products.
CPSC can require a
manufacturer to recall a
product or take other
corrective action.
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Unfair and Deceptive Practices
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Prohibited by Section 5 of the Federal
Trade Commission (FTC) Act
Unfair and deceptive practices include:
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False and deceptive advertising
Bait and switch
Door-to-door sales – state laws may require
a cancellation period for the consumer to
rescind the sale.
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Do-Not-Call Registry
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The FCC and the FTC
enacted administrative
rules that created the “DoNot-Call” Registry.
Telemarketers have 3
months from the time of
phone number registration
to remove the registered
phone number from their
call lists.
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Global Product Safety

Countries in addition to
the United States have
adopted laws that protect
consumers from unsafe
products and
unscrupulous business
practices.
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