Consumer Protection Law

Consumer Protection

 

The goal of consumer protection laws is to place consumers, who do not regularly engage in consumer-business transactions such as buying goods or borrowing money,  in a fairer position companies who regularly engage in consumer-business. Consumer transactions—purchases of goods or services for personal, family, or household use—have traditionally been  presumed to be fair. However private individuals are not in an equal bargaining position with most business. Beginning in the 1960-1970 congress and many States passed laws to respond to the multiple complaints by consumers and consumer advocates, that consumers were inherently disadvantaged, especially when dealing with large corporations. 

Consumer Product Safety Commission

The Consumer Product Safety Commission (CPSC) was formed by Congress in 1972. . It is to protect consumers from faulty or dangerous products. It researches and develops, with the input of corporations, and safety experts and consumers minimum mandatory safety standards for consumer products. The CPSC has the authority to ban products, and to recall them. However the agency is overwhelmed and under staffed. Over the years, this agency  has insufficient resources to trouble shoot and protect all consumers from all hazardous products.

So the some of the laws allow a private right of action or private right to sue for defective products. Talk to us if you have tried the federal agency and are not able to get a result that is meaningful to you

Unfair or Deceptive Trade Practices

The Federal Trade Commission  (FTC), the another federal agency that handles consumer complaints. It regulates unfair or deceptive trade practices. 

Most States have  passed consumer protection statutes, that are similar to the Federal Trade Commission Act (15 U.S.C.A. § 45(a)(1)). Therefore many State attorney generals may enforce the consumer laws, but they too are over whelmed with such cases and under funded.

So again, some States allow for private cause of actions to be filed by the individual consumer. Fortunately many of these laws also allow the consumer to recover their expenses and legal fees, if they recover. 

Truth in Lending Act

Consumer loans , such as home mortgages, retail charges and credit cards,are often complicated as to finance terms.  Congress passed certain laws requiring lenders to disclose and explain the financial terms to potential borrowers. The Consumer Credit Protection Act of 1968 (15 U.S.C.A. § 1601 et seq.),or  the truth in lending law, regulates thes loans . For example there is not to be lenders  advertising loan terms that are only available to preferred borrowers. Advertisements on consumer loans  cannot disclose partial terms; all the terms of the transaction or none of them must be spelled out. If a laon is to be repaid in more than four installments, the agreement must conspicuously state that "the cost of credit is included in the price quoted for the goods and services."

The Truth in Lending Act is designed to generally protect all consumers. Therefore it does not provide the individual consumer.  If  a lender violates the law, there something the State Attorney General or other regulating agency could do. 

Fair Debt Collection Practices Act

The Consumer Protection Act was amended in 1996 to allow the Fair Debt Collection Practices Act . Congress passed these laws to try to stop abusive, deceptive, unfair debt collection practice. Individuals, family, and household debt is regulated by this law. For example, collection of money owed for the purchase of an automobile, or medical care, or retail charge accounts are regulated by this law. 

The law allows for a private person to sue if bill collectors are violating the law. The remedy may include collecting up to $1,000 and attorneys' fees for a violation. If there are a group of people being wronged by the debt collector the group may sue a debt collector and recover  for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

Warranties

Warranties are promises by a manufacturer, made to the consumer when a product is sold. The general warranty is that a prroduct is to fulfill or serve the purpose for which it was designed. The Uniform Commercial Code , adopted in Iowa, Illinois and other states, regulates sales transactions. It specifically provides for the three most common types of consumer warranties: express, merchantability, and fitness.

Express warranties are promises included in the written or oral terms of a sales agreement that assure the quality, description, or performance of the product. These warranties are usually included in the sales contract, or in a separate pamphlet packaged with the merchandise. These warranties shown in the product advertisements. If a consumer relies on a written description of a product there may be a claim for breach of warranty if the actual product differs..

Merchantability and fitness warranties are  implied warranties, which are promises that arise by operation of law. A warranty of merchantability concerns the basic understanding that the product is fit to be purchased and used in the ordinary way. Simple examples are:  that an electric lamp will provide actually give light, or that a radio will pick up broadcast stations, and that a frezzer will keep food cold.

A warranty of fitness relates to the consumer's reason for purchasing a product. This warranty allows the consumer to rely on the seller to offer goods only if they are suitable for that particular purpose. For example, there may be a breach of the implied warranty of fitness if a salesperson knowingly sells a consumer software that is not designed for operation on the consumer's computer. The consumer must show that an implied warranty existed, was breached, and that the defective product caused  harm to the consumer. There often will be requirements that the consumer notify the seller within a reasonable time of the problem. 

 The Magnuson Moss Warranty Act (15 USC 2301 et seq) is a federal law that requires sellers to explain, in easy-to-understand language, the terms of warranty. Under this act, when a product fails to meet the standards promised by the warranty, the seller must repair it, replace it, or refund the purchase price.

 

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