Transcript Chapter 045- Consumer Protection

Consumer Protection
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Consumer Protection Laws
• Government statutes and
regulations that promote
product safety and prohibit
abusive, unfair, and
deceptive practices.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Federal Food, Drug, and Cosmetic
Act
• Provides the basis for the regulation
of much of the testing,
manufacture, distribution, and sale
of foods, drugs, cosmetics, and
medicinal products and devices in
the United States.
• Administered by the Food and Drug
Administration (FDA).
• The FDA is empowered to regulate
food, food additives, drugs,
cosmetics, and medicinal devices.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Food Labeling
• Nutrition Labeling and Education
Act
– Requires food manufacturers to
place labels on foods that
discloses nutritional information
about the food.
• Number of calories
• Amount of fat
• Dietary fiber
• Cholesterol
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Regulation of Drugs (continued)
• The law requires all users of
prescription and
nonprescription drugs to
receive:
– Proper directions for use
– Including method and duration
of use
– Adequate warnings about any
related side effects
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Regulation of Cosmetics
• The FDA has issued regulations
that require cosmetics:
– To be labeled
– To disclose ingredients
– To contain warnings if they are
carcinogenic or otherwise dangerous
to a person’s health
• The manufacture, distribution, or
sale of adulterated or misbranded
cosmetics is prohibited.
• The FDA may remove from
commerce cosmetics that
contain unsubstantiated claims.
– Preserving youth
– Growing hair
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Regulation of Medicinal
Devices
• The Medicinal Device
Amendment to the FDCA gives
the FDA authority to regulate
medicinal devices and
equipment.
• The mislabeling of medicinal
devices is prohibited.
• The FDA is empowered to remove
“quack” devices from the market.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Consumer Product Safety Act
• Federal statute that regulates
potentially dangerous consumer
products.
• Created the Consumer Product
Safety Commission (CPSC).
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Consumer Product Safety
Commission
Independent federal
regulatory agency
empowered to:
1.
2.
3.
Adopt rules and regulations to
interpret and enforce the
Consumer Product Safety Act.
Conduct research on safety.
Collect data regarding injuries.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Unfair and Deceptive Practices
• Prohibits unfair and
deceptive practices
including:
– False and deceptive
advertising
– Bait and Switch
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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False and Deceptive
Advertising
– Containing misinformation or
omitting information that is likely
to mislead a reasonable
consumer, or
– Makes an unsubstantiated
claim.
– Proof of actual deception not
required.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Bait and Switch
• Seller advertises low-cost item
to attract customers.
• Seller pressures buyers to
upgrade.
– Often refuses to show
advertised merchandise.
– Discourages employees from
selling advertised merchandise.
– Fails to have adequate
quantities on hand.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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