Across the country, there are many policies and laws in place that safeguard consumers from unfair and deceptive practices. Understanding these policies is a must in order for consumers to protect themselves from bad actors. Timothy Drabic, an industry expert, explains federal and state consumer protection laws and how they can help everyone achieve fair deals.
The History of Consumer Protection
Prior to the early 1900s, there was little to no consumer protection. Certain areas including weights and measures were standardized, but there was no overarching government regulation. In these days before consumer protection, products were often defective, foods and drugs were impure, and customers took serious risks when they used or consumed them. Publicly known cases exposed citizens to botulism, tuberculosis, typhoid fever, and poisoning by dangerous chemicals and heavy metals like lead. A public outcry led to the passage of legislation protecting the consumer.
The Federal Trade Commission was founded in 1914. The organization was created to prevent unfair competition among businesses like antitrust situations. Since 1938, the Commission has been dedicated to consumer protection, making sure that products are safe, financial transactions are fair, and that people are protected against identity theft.
On a federal level, consumer protection is handled by the Federal Trade Commission, the Food and Drug Administration, the Consumer Financial Protection Bureau, and the Consumer Product Safety Commission. The United States Department of Agriculture is also involved where food is concerned. This multi-industry network of regulatory agencies has provided safety to the American consumer for the last 80 years.
Situations Where Consumer Protection is in Effect
Consumer protection has many facets. Identity theft is handled by the Federal Trade Commission, in accordance with local law enforcement. Identity theft can be a huge problem that impacts a person’s credit and financial information, as well as their Social Security information. Laws against identity theft include the Identity Theft and Assumption Deterrence Act of 1998. This law made it a federal crime to use someone else’s personal details to commit an illegal act.
Another important function of the Federal Trade Commission is protecting consumer finance. Scams in banking, mortgage lending, credit reporting, debt relief, and more are prosecuted by the Federal Trade Commission.
The Consumer Financial Protection Bureau was founded in 2010 with the goal of supervising banks and other entities which provide consumer financial products. This agency enforces the Fair Credit Reporting Act as well as the Fair Debt Collections Act.
The Federal Trade Commission also handles deceptive advertising. The Federal Trade Commission Act prevents companies from deceiving their customers in any medium. This includes electronic and television advertising. Claims need to be substantiated, and advertisers who lie are heavily fined.
Product safety is another important aspect of consumer protection. The Food and Drug Administration, the United States Department of Agriculture, and the Consumer Product Safety Commission are in charge of these areas. When unsafe products are reported, these agencies perform full investigations. They can then order a voluntary or mandatory recall of the product in question. For example, the United States Department of Agriculture is in charge of the safety of meat, dairy, and other animal products as well as agricultural items.
The Food and Drug Administration covers most other foods and prescription and over-the-counter medications. If a drug is reported to be unsafe or to contain a contaminant, the Food and Drug Administration warns consumers and can take products off the shelves.
Additional State Protections
Many states provide consumer protections that go above and beyond those provided by the federal government. However, the coverage provided by these laws is patchy, and not every state offers the same level of protections.
The Unfair and Deceptive Practices statutes in each state provide at least some additional protections against bad actors. For example, the statutes cover credit, insurance, and utilities in Florida. They also partly cover real estate transactions. Consumer remedies include the ability to file for multiple or punitive damages as well as the ability to recover court fees associated with the lawsuit.
Consumers in certain states should be aware that their state’s consumer protection laws are weak. Colorado, Indiana, Iowa, Mississippi, Oregon, South Dakota, and Texas do not have an enforceable standard for the prohibition of deceptive acts. This may mean that a person who has been wronged needs to pursue their problem at a federal level.
In addition, State Attorney General’s offices are able to help consumers with a wide variety of issues including scams, false advertising, and contract disputes with merchants. Consumers should not forget to turn to their state attorney general’s office for help with these issues.
Know Your Rights
Every consumer should know their rights. Laws from state and federal agencies have been enacted which prevent companies and individuals from acting in bad faith where certain transactions are concerned. It is also important to understand product safety in general. When citizens know their rights under the law, they will be better able to make solid decisions without worrying about being deceived. Timothy Drabic encourages all citizens to study consumer protection and to understand what the law can do to protect them from being misled.