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Consumer Information & Action. Consumer Rights & Responsibilities Consumer Protection Consumers Beware Making Choices. - PowerPoint PPT Presentation
Citation preview
Tammy has rented a DVD from Hollywood Video. She then proceeds to
softball practice, leaving the DVD to bake in the car for two hours. When
Tammy gets home to watch the DVD, it doesn’t function properly.
WHO is your first line of defense against consumer fraud and deception?
WHO must seek assistance when a violation of consumer rights has occurred?
WHO must contact the appropriate agency in order to seek assistance and advice?
WHO has rights and responsibilities as a consumer?
What makes the Consumer Movement successful?
Poor economic conditions
Scandals/fraud
Active participation by all players
What Do We Want Today?
Increased quality & info of products Consumer Reports The Consumers Union Environmental Groups
Objective & useful info Consumer Reports Better Business Bureau
Resolving consumer problems & strengthening redress systems
The Consumer Bill of Rights
The Right to SafetyThe Right to be InformedThe Right to ChooseThe Right to be HeardThe Right to RedressThe Right to Consumer EducationThe Right to a Healthy Environment
John F. Kennedy
The Consumer Bill of Rights
The Right to SafetyProtection against products
that are hazardous to health/life
The Consumer Bill of Rights
The Right to be InformedAgainst fraud/deceitThe assurance of receiving the
necessary facts to make an informed choice
The Consumer Bill of Rights
The Right to ChooseAccess to a variety of quality
products and servicesThe right to buy what you
want at a fair price
The Consumer Bill of Rights
The Right to be HeardAssurance of representation
against governmentHelp in the formulation of
policies
The Consumer Bill of Rights
The Right to RedressThe right to complain, and
achieve satisfaction from the complaint process
The Consumer Bill of Rights The Right to Consumer Education
Receive the necessary education and assistance to use resources efficiently
Your Consumer Rights Ensure
Quality products Product knowledge No Monopolies Your opinions matter Customer satisfaction Being informed Green movement
Federal Agencies
USDA – U.S. Dept. of Agriculture FDA – Food & Drug Administration CCCS – Consumer Credit Counseling Service
CPSC – Consumer Product Safety Commission
FCC – Federal Communications Commission
FTC - Federal Trade Commission
Federal Agencies
USPSIS – U.S. Postal Inspection Service FAA– Federal Aviation Administration NIST – National Institute Standards & Tech
SEC – Securities Exchange Commission
FCIC – Federal Citizen Information Center
NTIA – National Telecom & Info Administration
Notable Federal Acts
Food, Drug, and Cosmetic ActHazardous Substances Labeling
Act Cigarette Labeling and
Advertising ActChild Protection and Toy Safety
Act
Notable Federal Acts
Wool Products Labeling Act Poultry Products Inspection Act Flammable Fabrics ActNational Traffic and Motor Vehicle
Safety Act
Private Organizations
MACAP – Major Appliance Consumer Action PanelRepresents consumer in the purchase and use of home appliances
State/Local Assistance
County/city governmentsPublic interest groupsIndependent consumer groupsNewspapers, TV, other media
Consumer Protection
Promises – Declaration that something will or will not happen in the future
Create moral, not legal obligations
Implied Warranty– unspoken and/or unwritten promises made by a seller to a buyer that the item being sold worksImplied Warranty of Merchantability
Implied Warranty of Fitness
Implied Warranties
Implied Warranty of Merchantability - the promise that the product sold is in good working order and will do what it is supposed to do
Implied Warranty of Fitness (for a particular purpose) - the promise that the seller’s advice on how to use the product will be correct
Implied Warranties
Express Warranty - an explicit written and/or verbal offer made voluntarily by the seller that a product will perform according to particular expectationsFull Warranty
Limited Warranty
Express Warranties
Full Warranty – if the product malfunctions, is defected or does not conform with the written warranty, the seller must remedy the product free of charge within a reasonable amount of time by repair, replacement, or refund
Limited Warranty - specifies under what conditions, to what extent, and for how long the manufacturer of an item guarantees that it will perform as claimed
Express Warranties
Extended Warranty – a prolonged warranty in addition to the original warranty, usually costs extra, and certain exclusions often apply (normal wear and tear, owner abuse, and “acts of God”)
Common for automobiles and electronics
Also called a Service Contract
Extended Warranties
“As Is Goods - goods that do not require the seller to offer any warranty, the seller is required to make clear to consumers that the product is being sold in less than prime condition and that the consumer assumes all responsibility for any faults and flaws
Some states prohibit this practice, Illinois is NOT one of them
“As Is” Goods
Amy agreed to go to the homecoming dance with Mike. Later Steve, the captain of the football team, asked Amy to be his
date for the dance.
Amy broke her date with Mike to go out with Steve instead. Does Mike have a legal claim against
Amy? Why or why not?
*CONSUMER BEWARE*Fraudulent & Deceptive Marketing Practices
Bait & SwitchReferral SalesFake SalesLow BallingPyramid
Schemes
Pigeon DropFraudulent
RepresentationHealth &
Medical Product Fraud
Infomercials
Bait and Switch A marketer advertises a very
attractive price that is designed to draw customers.
Once the customer comes into the store the advertiser will attempt to sell the customer a more expensive product (the "switch").
Fake Sales When a store places a high
"regular" price on an item, then deeply discounts it to try to make customers think they're getting a bargain.
in some cases the discount amount is very small or is in fact still higher than a competitor’s regular price.
Fraudulent Representation Making a false statement about
a material fact, with the full knowledge the statement is false
Intention is to make another person believe a false statement in order to get that person to enter a contract or sales agreement
Health & Medical Product Fraud
Fraudsters prey on their victims by tricking them into believing they will receive an approved form of alternative medicine at a lower price than comparable legitimate products
Ex: Miracle products with miracle cures
Low-Balling A persuasion and selling technique in
which an agreed upon item or service is offered at a lower price than is actually intended to be charged
After a customer feels attached or committed to the product or service being offered, the seller adds items or services to the original order which raises the price for the customer and increase profits for the seller
Pigeon Drop In the pigeon drop scam, swindlers work in
pairs or teams. One befriends an unsuspecting consumer, the "pigeon," while the other approaches them with money or valuables he claims to have just found.
After some rehearsed conversation, the con artists agree to split the money three ways with you and arrange to meet at a lawyer's office or somewhere else of their choosing.
Pigeon Drop (continued)
But can they trust you, they ask. To get your share, you'll need to put up some "good faith" money, which they will return to you after the goods are divided.
To prove yourself trustworthy, you turn over a large sum of money to them and later go to meet them at the designated spot. Soon after arriving, you realize the pair is long gone -- and so is your money.
Pyramid Schemes It starts with one person - the
initial recruiter This person recruits a second
person, who is required to “invest” money which is paid to the initial recruiter
Pyramid Schemes (continued)
The new recruit must recruit more people to “invest” to make his or her money back
The process continues until the base of the pyramid can NOT support the top of the pyramid
The initial recruiter(s) keep their money while everyone else loses theirs
Referral Sales When a consumer is persuaded to
buy goods or services by promises of a rebate, commission, or other benefit for supplying information that helps the trader sell to other consumers
The consumer does not get the promised benefit unless some other event happens after the agreement is made
Infomercials
1. Failure to promptly deliver the product in a timely manner, if at all.
2. Excessive or artificially inflated shipping and handling charges.
3. Failure to provide the quality or characteristics advertised.
Infomercials (continued)
4. Failure to deliver the quality construction or workmanship promised.
5. Difficulty returning or receiving a refund.
6. Difficulty communicating with customer service.
*Making Choices* We are constantly making decisions about
wants and needsObtain & evaluate accurate informationCompare alternativesTake ActionRe-evaluate
Making Choices – InfluencesPersonal Factors
PERSONAL FACTORS Personal resources – time, money,
energy, skills Position in life – Age, gender, martial
status, lifestyle, employment status Cultural factors – background,
customs, religion Values and goals
Making Choices – InfluencesOutside Factors
OUTSIDE FACTORS Economy – interest rate, inflation,
general condition Technology - advances Environment – actions to clean up
and prevent damage Social pressures - media
Making Choices – Influences
ANY PURCHASES
Information for your purchase should be:1. Accessible2. Current3. Factual4. Unbiased
Making Choices – Influences
MAJOR PURCHASE FACTORS
Why? How long will I use this product? Substitutes? Can it be postponed? Additional costs? Other purchases instead? What is the total cost of this product?
Making ChoicesPromotional Techniques & Incentives
Displays Contests/Games Coupons Packaging Sampling/Give-a-ways Rebates Direct Mail Marketing Print
MediaHow much do these
techniques influence your decision to buy?
Making ChoicesMarketing Influences
Pricing$1.99, $2.985/$1.00 instead of $.20 each
SalesEnd of season, end of month,
anniversary and holiday salesBuy One, Get One FreeClearance merchandise or
going out-of-businessDoor Busters
Ex: Black Friday
*Advertising* Target Market—the specific group of
people we are trying to aim at:
AgeGenderIncomeEthnicityLifestyleInterests
Types of Advertisements
Product/Consumer Advertising Specific product at specific group of people Ex: Trix Cereal, HoverRound
Selective/Comparative Advertising No particular product, just choose our company Ex: Ford vs. Chevy, McDonald’s vs. Burger King
Primary Advertising General product, no specific company Ex: Milk, Beef, Cotton
Types of Advertisements
Newspapers & Magazines
Radio Television Direct Mail or
Junk Mail Outdoor Media Internet
*Are we Influenced by media?
Does this have the same meaning?
Studies suggest that the use of Acetaminophen is linked Asthma…
OR
This study proves that Acetaminophen use causes Asthma …
Protect Yourself from Unfair Sales Practices
Know what you want in a purchase beforehand and
insist on it!
Unordered Products
If you receive unordered products they are yours for the keeping and the business cannot expect payment
Cooling Off Period (FTC)
You have 3 days to change your mind Door to door, phone
solicited sales Applies to Purchases
over $25
Advertisements
Now that you are aware of the persuasive methods of advertisers…
Use this information to become a wiser consumer!