Transcript BUSINESS LAW 3E, by Henry R. Cheeseman

PowerPoint Slides to accompany
The Legal Environment of Business
and Online Commerce 5E,
by Henry R. Cheeseman
Chapter 24
Consumer Protection
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1
Caveat Emptor

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The traditional
guideline of sales
transactions
“Let the buyer
beware.”
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2
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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3
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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4
Regulation of Drugs and
Medicinal Devices

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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.
The FDA has authority to regulate
medicinal devices such as pacemakers
and diagnostic devices.
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5
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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6
Product Safety

The Consumer Product
Safety Act created the
Consumer Product Safety
Commission (CPSC).


CPSC regulates potentially
dangerous consumer
products.
CPSC can require a
manufacturer to recall a
product or take other
corrective action.
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7
Unfair and Deceptive Practices


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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8
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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9
Debtor Protection Law

Truth in Lending Act (TILA)
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Consumer Leasing Act
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Requires creditors to make disclosures to debtors in
consumer transactions.
Extends the requirements of TILA to consumer
leases.
Fair Credit and Charge Card Disclosure Act

Requires direct written solicitation to display annual
percentage rate, membership fee, finance charges,
and other information.
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10
Debtor Protection Law

Equal Credit Opportunity Act

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Fair Credit Reporting Act

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Prohibits discrimination based on race, color, national
origin, religion, age, or receipt of public assistance.
Sets guidelines for consumer reporting agencies.
Fair Debt Collection Practices Act

Protects consumers from abusive, deceptive, and
unfair practices by debt collectors.
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