Transcript 20-3 - TheBigEyeintheSkyDontLie

20.3 Consumer Protection
Objectives
 Explain why consumers need the government
to protect them from defective or dangerous
products.
 Understand how you can take responsibility for
your own protection as a consumer.
 Know how to protect yourself from identity theft
and what to do if your identity is stolen.
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
Key Terms
 Food and Drug Administration (FDA)
 Federal Trade Commission (FTC)
 cease and desist order
 Consumer Product Safety Commission (CPSC)
 Environmental Protection Agency (EPA)
 identity theft
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
3
Government Efforts
to Protect Consumers
Most consumers rely on manufacturers to
be responsible and on the government to
set quality and safety standards to protect
them from harm.
The government intervenes in the market
in an effort to protect consumers from
dishonest or careless producers.
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
4
The Pure Food And Drug Act
The Pure Food and Drug Act (1906)
Food, Drug, and Cosmetic Act (1938)
Food and Drug Administration (FDA)—
federal agency that sets standards for
foods and drugs produced or sold in the
United States
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
5
The Federal Trade Commission
 Federal Trade Commission Act (1914)
 Federal Trade Commission (FTC)—
government agency that ensures that
businesses compete and market their products
fairly and honestly
 Enforces antitrust laws
 Sets standards for product packaging and labeling
and honesty in advertising
 Cease and desist order is an FTC-issued directive to
stop a firm making a false or misleading advertising
claim.
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
6
The Consumer Product
Safety Commission
Consumer Product Safety Commission
(CPSC)—federal agency created to
protect consumers from dangerous
products they might purchase or use
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
Number of CPSC-Ordered Recalls
in the Month of April, 2000–2006
7
Figure 20.3
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
8
The Environmental
Protection Agency
Environmental Protection Agency
(EPA)—federal agency that interprets and
enforces laws passed by Congress that
involve the environment
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
9
Other Government Protections
 Other federal agencies
 Many other federal agencies are responsible for
protecting consumers in other ways.
 These agencies are designed to provide a degree of
safety to consumers they could not reasonably be
expected to achieve on their own.
 State and local protection
 All state and many local governments also have
agencies that are responsible for protecting
consumers.
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
Take Responsibility
for Your Own Protection
10
Understand consumer rights and
responsibilities
Use common sense
CONTEMPORARY ECONOMICS
© Thomson South-Western
20.3 Consumer Protection
SLIDE
11
Dealing with Identity Theft
Identity theft—a crime in which one
person fraudulently uses another’s identity
to obtain credit or to access financial
accounts
Protect yourself from identity theft
Know what to do if your identity is stolen
CONTEMPORARY ECONOMICS
© Thomson South-Western