Consumer Rights Exam 2

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  1. Fraud
    Intentional deception to deprive another person of his or her assets
  2. Consumer Responsibilities
    • 1. Be Honest
    • 2. Be Realistic
    • 3. Avoid frivolous lawsuits
    • 4. Follow law when protesting / boycotting
    • 5. Report faulty goods
    • 6. Take responsibility
    • 7. Consider environmental effects of consumption
    • 8. Reduce chance of identity theft
    • 9. Get 2+ estimates
  3. Steps to follow before buying
    • Decide what you need & can afford
    • Research the product / service
    • Read contracts & warranties
    • Find out refund and return policies
    • Narrow down to a few options
  4. Consumer Redress
    Right to seek and obtain satisfaction for damages related to a product or service
  5. Complaining Effectively
    Local local business -> Headquarters of Business -> Manufacturer -> Self-Regulatory Organizations -> Government Consumer Action Agencies -> Small Claims or Civil Court
  6. Better Business Bureau (BBB)
    • Third-party complaint-handling organization 
    • -Non profit
    • -Supported (funded) by local businesses
    • -Provide consumer education
    • -Answer consumer questions
    • -Help in resolving buy / seller complaints
  7. Consumer Law
    • Regulation of relationships between individual consumers and businesses selling goods/services that covers:
    • -Product liability
    • -Privacy rights
    • -Unfair business practices 
    • -Fraud/misrepresentation
  8. Warranties
    • Magnuson-Moss Warranty Act (1975)
    • -Warranty and guarantee can be used interchangeably
    • Types of warranties
    • -Full warranty
    • -Limited warranty
    • -Express Warranty
    • -Implied warranty
  9. Airline Rights
    • Delayed flights or luggage- generally no compensation because no government regulations
    • Lost luggage has a maximum liability of $1,250 on domestic flights and 1,850 on international flights
  10. Laws on Privacy
    • US Approach - industry specific legislation, regulation, and self regulation
    • Internet privacy is weak
  11. Gramm-Keach-Bliley Act
    • Financial companies can provide your personal financial information to third party non affiliate service providers
    • -Must inform you in privacy policy
    • -Must allow you to opt out
  12. Credit Card Act of 2009
    • Consumers under 21 years must show proof of income to repay or have adult co-signer
    • Bans freebies on or near colleges for signing up for a credit card
  13. Lost / stolen Debit card
    • Liable for $50 if notify bank within 2 business days
    • -3-60 days : $500
    • >60 days : unlimited liability
  14. Dodd-Frank Wall Street Reform & Consumer Protection Act
    • Signed in 2010
    • Created Consumer Financial Protection Bureau
  15. Habit Buying
    "Programmed" purchase decisions based on repeated past experiences
  16. Impulse buying
    Unplanned, spur-of-the-moment buying of unnecessary products and services
  17. Conspicuous Consumption
    Consuming goods/services more to impress others than for their intrinsic values
  18. Planned buying is important when..
    • Cost is high and potential payoff is great
    • product or service will be used often
  19. 6 Steps in buying decision process
    • 1. Assessing the need
    • 2. Searching for the information
    • 3. Evaluation alternatives
    • 4. Selecting a product or service
    • 5. buying
    • 6. Evaluating after purchase through use and comparisons
  20. Marketers want to maximize
    • Consumer awareness
    • Consumption
    • Loyalty
    • Customer satisfaction
  21. Company responses to competition:
    • Lowering prices
    • Increasing advertising
    • Introducing new products
    • Buying competitors (mergers)
    • Developing new strategies
    • Improving customer service
    • Improving product quality
  22. Four stages of product development
    • Introduction
    • Growth
    • Maturity
    • Dormancy/decline (sometimes revitalization)
  23. US Census Bureau definitions of household and family
    • Household- all persons who occupy a "housing unit", includes related and/or unrelated
    • Family- two or more persons related by birth, marriage, or adoption residing in same household
  24. Reasons for Dissatisfaction in Consumer Decisions
    • As the number of products increases, potential for problems incease
    • Growing complexity
    • Overconfidence in government protection
  25. Parkinson's Law
    A task expands to fill the time available
  26. Pareto Principle
    • 80/20 Rule
    • -20% of the time expended leads to 80% of results
    • -The other 80% leads to 20% of the results
  27. Advertising
    Any paid form of nonpersonal communication about an organization, product, service, or idea by identified sponsor
  28. Advertising pros and cons
    • Pros
    • -Encourages competition 
    • -Fosters economic growth
    • -Higher volume of sale -> lower production cost -> lower prices
    • Cons 
    • -Adds to production cost (hight prices)
    • -Questionable techniques
    • -Does it provide information?
  29. Federal Communication Commission (FCC)
    • Formed in 1934
    • Protects public regarding broadcast communications 
    • Deals with advertising that is distasteful or deceptive
  30. FTC
    • Receives complaints & inquiries on advertising
    • Investigates problems
    • Takes action if needed
    • Corrective Advertising
  31. Magnusuon-Moss Warranty - FTC Improvement Act of 1975
    Empowers FTC to obtain consumer redress when a person or company engages in false or misleading advertising
  32. Special interest groups
    Two or more people with a common interest who seek to influence government policy and enforcement
  33. Lobbyiest
    represent Special interest group
  34. CFA Consumer Federation of America
    • National Consumer advocacy organization
    • Areas: 
    • -Financial services
    • -Utilities
    • -Product safety
    • -Transportation
    • -Health care
    • -Food safety
  35. Agencies involved with consumer protection
    • Federal Trade Commission (FTC)
    • Consumer Product safety commission(CPSC)
    • Food and Drug Administration (FDA)
    • US Department of Agriculture (USDA)
    • Department of Justice (DOJ)
    • Securities and Exchange Commission (SEC)
    • National Highway Safety Administration (NHTSA)
  36. FTC
    Established in 1938, deceptive advertising added to FTC jurisdiction in 1975, Magnuson-Moss Warranty Act added, corrective advertinging
  37. CPSC
    Created by Congress in 1972, independent agency, to protect consumers from injuries or deaths associated with consumer products; most often toys
  38. FDA
    • Federal agency within the Department of Health & Human Services
    • Mission: protect public health
    • -Approve products that enter the market
    • -monitor products for continued safety
    • Under jurisdiction
    • -Food
    • -Drugs
    • -Medical devices 
    • -Animal feed and drugs
    • -cosmetics
  39. USDA
    • Started in 1862
    • Mission: orginially for agriculture, now have expanded to food an water safety
    • Oversee's -food stamps, school breakfast / lunches
    • Responsible for 
    • -Safety of meat, poultry, and egg product
    • -Educating public on nurtition
  40. Department of Justice
    Mission: enforce law & defend US interests based on law,
  41. Antitrust Statutes
    • Sherman Antitrust Act
    • -maintain a competitive economy, prevent monopolies
    • Clayton ACt
    • -Prevents mergers likely to reduce competition
  42. NHTSA
    • Part of Department of Transportation (DOT)
    • Mission: Reduce injuries, deaths & property losses related to motor vehicles
  43. Areas of Government Regulation
    • Pricing
    • Licensing
    • Standard setting
    • Subsides
  44. Deregulation
    removing or reducing government intervention in an industry, allowing free market to operate

Card Set Information

Author:
Kimmiey
ID:
265110
Filename:
Consumer Rights Exam 2
Updated:
2014-03-05 05:48:24
Tags:
Consumer rights
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Description:
Consumer rights chapters 4-7
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