Transcript Federal Trade Commission Act - McGraw Hill Higher Education

Chapter 21
Consumer
Protection
Law
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
UNFAIR OR DECEPTIVE SALES
PRACTICES

Federal Trade Commission Act (FTCA),
one of the very first statutory protections for
American consumers.

The FTCA established an administrative
agency called the Federal Trade
Commission (FTC) and charged the FTC
with the broad mandate of preventing unfair
and deceptive acts or practices.
21-2
Telemarketing
Telephone Consumer Protection Act
Telemarketing/Consumer Fraud Prevention Act.





(1) allow consumers to opt out of unwanted calls from
telemarketers,
(2) ban the use of unsolicited recorded calls and faxes,
(3) regulate 900 number calls,
(4) prohibit telemarketers from making false claims,
(5) require disclosure of all the material terms of offers.
21-3
Regulation of Online Advertising

Assault of Non-Solicited Pornography and Marketing Act of 2003,
better known as the CANSPAM Act.

Outlawed the dubious methods used by certain spam suppliers
and provided for criminal sanctions in severe cases.

Prohibits online marketing providers from falsifying the “from”
name and information in the subject line designed to fool
consumers into opening an unsolicited e-mail.
21-4
Magnuson-Moss Act

KEY POINT

The Magnuson-Moss Act does not mandate
that sellers offer a warranty to a
consumer/buyer, nor does it create any
additional implied warranties. If the seller
does offer a warranty, the transaction is
subject to the provisions of the statute.
21-5
Consumer Product Safety Act

The CPSC researches, institutes, and
enforces safety standards for consumer
products that pose a potential risk of injury.

If it determines that a product defect poses a
threat to consumer safety, the manufacturer
may be required to recall.
21-6
FOOD AND DRUG SAFETY

The Food, Drug and Cosmetic Act (FDCA)
created the U.S. Food and Drug
Administration (FDA).

Regulates testing, manufacturing, and
distribution of foods, medications, medical
devices, and cosmetics.
21-7
Consumer Credit Regulation

Consumer Credit Protection Act (CCPA).
Regulates the following:




disclosure of credit terms,
credit reporting,
antidiscrimination, and
collection of debts from consumers.
21-8
Truth in Lending Act

KEY POINT

The TILA covers only creditors who are
regularly engaged in extending (or arranging
for) an extension of credit for goods and
services that is for personal, family, or
household goods.
21-9
Antidiscrimination

Equal Credit Opportunity Act

Denying an applicant credit based on factors
relating to the applicant’s race, religion,
national origin, color, gender, age, or marital
status is unlawful.
21-10
Credit Cards

The Credit Card Accountability Responsibility and
Disclosure Act of 2009 (CARD Act)

Increases the power and oversight authority of the Federal Trade
Commission over credit card issuers.

CARD Act protects consumers from surprises when interest rates
increases or credit card fees are imposed, and to restrict
marketing and card-issuing practices targeted to younger (18 to
21 years of age) consumers.
21-11
Credit Reports

Fair Credit Reporting Act (FCRA).

Sets privacy rights for consumer credit
reports, and

Requires that the credit bureaus give
individual consumers complete and timely
access to their own credit reports.
21-12
learning outcomes checklist

21 - 1 Explain the role of the Federal Trade
Commission in terms of various statutory consumer
protections.

21- 2 Articulate the standards used to define false
advertising and other deceptive practices and
identify specific consumer protection laws applied to
bulk e-mail.

21- 3 Define and give an example of a warranty.
21-13
learning outcomes checklist

21- 4 Distinguish between express warranties and
implied warranties, explain the protections afforded
by each type of warranty, and articulate the
standards for disclaiming a warranty.

21- 5 Name and explain the federal statutory
protections afforded to consumers for faulty or
unsafe products and for food and drug safety.
21-14
learning outcomes checklist

21- 6 Identify the parties in a credit transaction and
understand the role of federal statutory laws in
consumer credit transactions.

21- 7 List the various components of the Truth-InLending Act and give specific examples of
regulatory requirements.

21- 8 Explain the protections afforded to consumers
by federal statutes regulating the collection of
consumer debt.
21-15