Business Law and Ethics
Consumer Protection
Dealing with government regulation in business is an integral part of a manager's responsibilities. Recognizing what actions might violate particular consumer protection regulations is crucial to protecting the company and to insuring its profitable operation. Government regulation is found every day in the operation of businesses large and small, and once understood, it allows managers to make good decisions regarding business practices. When you have completed this topic, you will be able to:
•list the common types of regulations designed to protect consumers,
•identify types of illegal consumer credit practices,
•describe the warranty protection provided to consumers, and
•describe the purpose and role of the Federal Trade Commission (FTC) in consumer protection.
Read Chapter 40, "Consumer Law"
Read the following chapter in Business Law and the Legal Environment:
•chapter 40 ("Consumer Law")
Then respond to the following points in your notebook:
•What is the role of the FTC?
•Describe prohibited sales activities under the FTC Act.
•How is consumer credit regulated?
•What is the Magnuson-Moss Warranty Act?
•What government regulations apply to consumer product safety?
Consumer Law-statutes that protect consumers from the unscrupulous.
Federal Trade Commission (FTC)=Created by congress in 1915 to regulate business. Most important agency enforcing consumer law. Prohibits unfair deceptive practices.
FTC options for enforcing the law:
1. Voluntary Compliance
When the FTC determines that a business has violated the law, it first asks the offender to sign a voluntary compliance affidavit promising to stop
2. Administrative hearing and appeals
If the company refuses to stop voluntarily, the FTC takes the case to an administrative law judge (ALJ) within the agency. The violator may settle the case at this point by signing a consent order.
3.Penalties
FTC can impose a fine for each violation of a
Dealing with government regulation in business is an integral part of a manager's responsibilities. Recognizing what actions might violate particular consumer protection regulations is crucial to protecting the company and to insuring its profitable operation. Government regulation is found every day in the operation of businesses large and small, and once understood, it allows managers to make good decisions regarding business practices. When you have completed this topic, you will be able to:
•list the common types of regulations designed to protect consumers,
•identify types of illegal consumer credit practices,
•describe the warranty protection provided to consumers, and
•describe the purpose and role of the Federal Trade Commission (FTC) in consumer protection.
Read Chapter 40, "Consumer Law"
Read the following chapter in Business Law and the Legal Environment:
•chapter 40 ("Consumer Law")
Then respond to the following points in your notebook:
•What is the role of the FTC?
•Describe prohibited sales activities under the FTC Act.
•How is consumer credit regulated?
•What is the Magnuson-Moss Warranty Act?
•What government regulations apply to consumer product safety?
Consumer Law-statutes that protect consumers from the unscrupulous.
Federal Trade Commission (FTC)=Created by congress in 1915 to regulate business. Most important agency enforcing consumer law. Prohibits unfair deceptive practices.
FTC options for enforcing the law:
1. Voluntary Compliance
When the FTC determines that a business has violated the law, it first asks the offender to sign a voluntary compliance affidavit promising to stop
2. Administrative hearing and appeals
If the company refuses to stop voluntarily, the FTC takes the case to an administrative law judge (ALJ) within the agency. The violator may settle the case at this point by signing a consent order.
3.Penalties
FTC can impose a fine for each violation of a