Personal
Finance
Chapter 12
Consumer Awareness
Consumer Movement
• Began in the late 1800s
– Meatpacking plants
– The Jungle
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• Have you read The Jungle, by Upton
Sinclair? What did you think?
• What impact did that book have on
government and the rights of the people?
• Are there any books today that have had
that type of impact on society and
government? If no, why not?
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Consumer Awareness
Three Roles
• Producer
– Advertise
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Consumer Awareness
Three Roles
• Producer
– Advertise
– Provide toll-free numbers
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Consumer Awareness
Three Roles
• Producer
– Advertise
– Provide toll-free numbers
– Provide warranties
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Consumer Awareness
Three Roles
• Producer
– Advertise
– Provide toll-free numbers
– Provide warranties
– Use Energy Star label
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Consumer Awareness
Three Roles
• Producer
– Advertise
– Provide toll-free numbers
– Provide warranties
– Use Energy Star label
– Get Seal of Approval (Good Housekeeping)
Ö
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Consumer Awareness
Three Roles
• Producer
• Consumer
– Make informed choices
• Find product information
• Do product comparisons
• Ask for recommendations
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Consumer Awareness
Three Roles
• Producer
• Consumer
– Make informed choices
– Communicate opinions
• Write letters
• Tell retailers
• Return surveys
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Consumer Awareness
Three Roles
• Producer
• Consumer
– Make informed choices
– Communicate opinions
– Work together
• Boycott
• Use lobbyists
• Form consumer interest groups
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Consumer Awareness
Three Roles
• Producer
• Consumer
• Citizen
– Vote
– Communicate with elected officials
– Learn about government agencies
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal Communications
Commission (FCC)
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal Communications
Commission (FCC)
• Food and Drug
Administration (FDA)
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal Communications
Commission (FCC)
• Food and Drug Administration (FDA)
• Surface Transportation Board
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Consumer Awareness
Government Agencies
• Federal Trade Commission (FTC)
• United States Postal Service
• Federal Communications
Commission (FCC)
• Food and Drug Administration (FDA)
• Surface Transportation Board
• Consumer Product Safety Commission
(CPSC)
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Consumer Awareness
Government Regulation
• Debate for
– Protects against price gouging
– Promotes product standards
– Supports consumer safety
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Consumer Awareness
Government Regulation
• Debate against
– Impedes caveat emptor
– Limits competition
– Hurts economy (companies lose money)
– Deregulation cuts “red tape”
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Which of the following government
agencies regulates the safety of our
food?
A.
B.
C.
D.
E.
FTC
FDA
CPSC
FCC
FEC
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Which of the following government
agencies regulates the safety of our
food?
A.
B.
C.
D.
E.
FTC
FDA
CPSC
FCC
FEC
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• Do state governments as well as the
federal government regulate commerce?
What is the difference?
• How do consumers know what rights
they have?
• Should the government increase or
decrease regulation? Why?
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Consumer Rights
Legislation
• Consumers’ Bill of Rights – 1962
– Right to safety
– Right to be informed
– Right to choose
– Right to be heard
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Consumer Rights
Right to Safety
• Safe cars
– Car seats
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Consumer Rights
Right to Safety
• Safe cars
– Car seats
• Safe water
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Consumer Rights
Right to Safety
• Safe cars
– Car seats
• Safe water
• Safe food
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Consumer Rights
Right to Safety
• Safe cars
– Car seats
• Safe water
• Safe food
• Protection against lead and toxins
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Consumer Rights
Right to Be Informed
• Home shopping
– Internet
– Catalogs
– TV
– 30-day rule
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Consumer Rights
Right to Be Informed
• Telemarketing
– Do Not Call
(http://fin.emcp.net/donotcall)
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Consumer Rights
Right to Be Informed
• Contract
– Mutual assent
– Consideration
– Competent parties
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Consumer Rights
Right to Be Informed
• Consumer fraud
– Pyramid schemes
– Internet
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Consumer Rights
Right to Choose
• Competition (markets)
– Competitive
Consumer Rights
Right to Choose
• Competition (markets)
– Competitive
– Oligopolistic
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Consumer Rights
Right to Choose
• Competition (markets)
– Competitive
– Oligopolistic
– Monopolistic
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Consumer Rights
Right to Be Heard
• Government import policy
– Tariffs
– Quotas
– NAFTA
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Consumer Rights
Right to Be Heard
• Better Business Bureau
Dear Better Business Bureau:
Recently I purchased a new
washing machine from …
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Consumer Rights
Right to Be Heard
• Better Business Bureau
• Lodging a complaint
(advance to see sample)
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Consumer Rights
Right to Be Heard
• Next step after letter of complaint
– Legal / Court
• Consumer action panels
• Arbitration
• Small-claims court
• Lawsuit
• Class-action suit
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Consumer Rights
Fraud on the Internet
• Phishing – identity theft
• E-mail scams
• Redirecting to another site
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Consumer Rights
Fraud on the Internet
• Tips
– Hot spot – WiFi (theft is easier)
– Use secure site for data (shttp or https)
– Make sure company is
reputable, if possible
– Print copy of all transactions
– Report phishing to [email protected]
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Which of the following is not a right
from the Consumers’ Bill of Rights
passed in 1962?
A.
B.
C.
D.
E.
Right to be informed
Right to safety
Right to be heard
Right to choose
Right to freedom of religion
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Which of the following is not a right
from the Consumers’ Bill of Rights
passed in 1962?
A.
B.
C.
D.
E.
Right to be informed
Right to safety
Right to be heard
Right to choose
Right to freedom of religion
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• Do you use eBay or any other online
auction site? How does it work?
• What tips do you have for shopping
on the Internet?
• Have you ever had a bad experience
online? Explain.
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