Assignment: #1 Consumer Rights & Responsibilities
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
WHAT’S AHEAD
3.1 Consumer Rights and Responsibilities
3.2 Government and Consumer Protection
3.3 Deception and Fraud
3.4 Resolve Consumer Problems
Economic Education for Consumers
Economic Education for Consumers
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CHAPTER 3
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CHAPTER 3
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
LESSON 3.1
Consumer Rights and Responsibilities
GOAL
Describe each of your consumer rights and responsibilities.
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
KEY TERMS
competition
monopoly
redress
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
A Consumer Bill of Rights
Right to . . .
Safety
Be informed
Choose
Be heard
Redress
Consumer education
A healthy environment
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Rights Carry Responsibilities
Responsibility to . . .
Use products safely
Use information
Choose carefully
Express satisfaction or dissatisfaction
Seek redress
Be an educated consumer
Contribute to a healthy environment
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
As a consumer, what rights are you entitled to when dealing with businesses that sell goods and services? What responsibilities do you have in return?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
As a consumer, what rights are you entitled to when dealing with businesses that sell goods and services? What responsibilities do you have in return?
Businesses should respect consumers’ rights to safety, information, choice, being heard, redress, education, and a healthy environment
Consumers have the responsibility to use products correctly and to inform businesses of any problems
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
LESSON 3.2
Government and Consumer Protection
GOALS
Describe the evolution of the consumer movement.
Identify government agencies and laws that help protect consumers.
Describe different types of products warranties and how they protect consumers.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
KEY TERMS
consumer movement
Federal Trade Commission (FTC)
cease-and-desist order
Consumer Product Safety Commission (CPSC)
Environmental Protection Agency (EPA)
warranty
full warranty
limited warranty
implied warranty
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
The Rise of the
Consumer Movement
A growing concern
A growing awareness
The consumer movement
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Government Protection
Federal Trade Commission
Consumer Product Safety Commission
Environmental Protection Agency
State and local protection
Consumer movement today
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Warranties
The Magnuson-Moss Warranty Act
Full warranty
Limited warranty
Implied warranties
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Why do many people feel that consumers need protection more now than in the past?
What federal agencies are charged with protecting consumers from false advertising, dangerous products, and pollution?
What differences are there between full and limited warranties? How do warranties benefit businesses that offer them?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Why do many people feel that consumers need protection more now than in the past?
Today’s more complicated products make them more difficult to evaluate, leaving consumers vulnerable to poor-quality or even dangerous goods and services
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
What federal agencies are charged with protecting consumers from false advertising, dangerous products, and pollution?
FTC protects consumers from unfair or deceptive business practices
CPSC protects consumers from dangerous products
EPA is responsible for protecting the environment
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
What differences are there between full and limited warranties? How do warranties benefit businesses that offer them?
Full warranty: promises repair or replacement of defective product over a specific period of time at no cost to the customer
Limited warranty: promises repair or replacement of defective product subject to stated limitations
Businesses that offer warranties provide an incentive to customers to buy products with the stated protection
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
LESSON 3.3
Deception and Fraud
GOALS
Explain the meaning of deception and describe how consumers may be harmed by this practice.
Identify common types of fraud and explain how consumers may protect themselves against it.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
KEY TERMS
trading up
loss leader
fraud
bait and switch
pyramid scheme
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Deception
Trading up
Sale price
Suggested retail price
Loss leader
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Fraud
Fraud: deliberate deception, designed to secure unfair or unlawful gain.
A statement is fraudulent if it meets these two conditions:
The person who made the statement must know it is false.
The purpose of the statement must be to cause others to give up property that has value, such as money.
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Examples of Fraud
Bait and switch
Pyramid schemes
Internet and telephone fraud
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Internet and Telephone Fraud
Watch out for . . .
Deal offered seems too good to be true
Credit card/Social Security number requested to verify identity
Must buy item to get something else for free
No written contract or sales agreement is provided
You “must act now” or offer expires
No method given to contact the organization
Information about organization not available from independent sources
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
The Many Faces of Fraud
Examples:
Healthcare products that promise to cure incurable diseases
Home-improvement contractors who want payment before doing any work
Vacation clubs that require money in advance with the promise of inexpensive first-class vacations later
Repair work offered for less than the going rate
Weight-loss programs that promise unrealistic results
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
What is the definition of a deceptive selling practice?
How can you protect yourself against fraudulent selling practices?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
What is the definition of a deceptive selling practice?
Deceptive selling practices are intended to mislead consumers
Trading up, false sales, and inflated suggested retail prices can be deceptive
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
How can you protect yourself against fraudulent selling practices?
Learn to be skeptical
Check out unfamiliar companies and ask questions
Carefully evaluate responses to questions
Understand what you are buying and make decisions with your head rather than your emotions
Use the decision making process
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
LESSON 3.4
Resolve Consumer Problems
GOALS
Describe how to successfully complain about a product you purchased.
Identify government programs that can help resolve consumer problems.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
KEY TERMS
Better Business Bureau
arbitration
cooling-off period
small claims court
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Prepare to Make a Complaint
Write down the facts
The date and location of the transaction
A description of the product
The product’s price and your method of payment
A specific explanation of what is wrong
A statement of how you want the problem resolved
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
The Complaint Process
Start with the seller
Seek help from consumer organizations
Better Business Bureau (BBB)
Arbitration
Media help
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
Government Efforts
to Help Consumers
Truth in information
Enforcement is difficult
Use common sense
Cooling-off periods
Reporting consumer problems
Using small claims court
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
At which step of the complaint process is an organization such as the Better Business Bureau best able to help a consumer?
What are several ways in which the government works to protect consumers?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
At which step of the complaint process is an organization such as the Better Business Bureau best able to help a consumer?
At the fourth step of the complaint process, organizations such as the BBB are best able to help consumers when they are interacting with managers.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 3
What are several ways in which the government works to protect consumers?
The government protects consumers by . . .
passing and enforcing laws
setting standards
licensing businesses
requiring labeling
providing a court system that consumers may use to protect themselves
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning