Consumer Protection Laws
Consumer protection laws help ensure safe products, fair business practices, truthful advertising and a competitive marketplace. The Bureau of Consumer Protection, run by the Federal Trade Commission, investigates alleged violations of these laws and can even take legal action against offending companies. Consumers who have suffered harm due to unsafe products, deception, fraud or discrimination can file a complaint with the FTC or a state regulatory board.
Altogether, more than 70 laws protect consumers at the federal level. Examples of federal laws that protect consumer rights include:
- The Telemarketing Sale Rule,
- The Identify Theft Act,
- The Fair Credit Reporting Act,
- The Clayton Act, and
- The Federal Trade Commission Act.
States often have additional statutes in place as well. The laws both limit anti-competitive activities among businesses and protect consumers from harm.
Consumer protection covers a wide range of conduct related to goods and services. A few examples of common violations are:
- Poor product quality
- Dangerous products
- Misleading ads
- Harassment from collection agencies
In simple terms, product liability can be described as a liability the manufacturer or seller incurs for placing a dangerous product into the consumer’s hand. Product liability claims can arise from defects with the design, manufacture or marketing of a product.
When people are injured by a product, consumer protection laws often enable them to seek compensation from companies that produced, installed or sold the product.
Multiple legal theories can come into play in a product liability case. Lawsuits are often filed alleging strict liability. Strict liability generally involves products with an “unreasonably dangerous” defect causing injuries.
Under strict liability, the defective product has to be used as it was intended to be used and not substantially changed. If all the elements of strict liability are present, the consumer may not be required to prove a manufacturer’s or seller’s negligence.
Under federal law, an ad that intends to mislead consumers is illegal. This not only applies to ads that contain false information but also to ads that are misleading, even if the information is technically true. If a company is found to have released deceptive ads, they can be issued a cease and desist or required to run corrective ads. Additionally, consumers can sue the advertisers or join a class-action lawsuit.
Credit and Financing
The financial services industry has similar obligations to consumers, especially in the area of credit. Access to credit and credit ratings affect many aspects of life. The Fair Credit Reporting Act controls information on credit reports, and the Fair Debt Collection Practices Act limits the extent to which creditors can hassle debtors. Other laws regulate errors on bank accounts and prohibit discrimination in lending.
Consumer rights also extend to loans. The Truth in Lending Act shields people from deception or intimidation when making borrowing decisions. Lenders must completely disclose the terms of a loan, specifically the fees and the annual percentage rate. Whenever consumers end up in a situation where they are in over their heads because they were deceived, they can seek the help of an attorney and pursue filing a claim.
The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.
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