Consumer protection is a group of laws and organizations designed to ensure the rights
of consumers as well as fair trade, competition and accurate information in the marketplace.
The laws are designed to prevent businesses that engage in fraud or specified unfair practices
from gaining an advantage over competitors. They may also provide additional protection
for those most vulnerable in society. Consumer protection laws are a form of government regulation,
which aim to protect the rights of consumers. For example, a government may require businesses
to disclose detailed information about products—particularly in areas where safety or public health is
an issue, such as food. Consumer protection is linked to the idea of consumer rights,
and to the formation of consumer organizations, which help consumers make better choices in
the marketplace and get help with consumer complaints.
Other organizations that promote consumer protection include government organizations
and self-regulating business organizations such as consumer protection agencies and organizations,
the Federal Trade Commission, ombudsmen, Better Business Bureaus, etc.
A consumer is defined as someone who acquires goods or services for direct use or ownership
rather than for resale or use in production and manufacturing.
Consumer interests can also be protected by promoting competition in the markets which
directly and indirectly serve consumers, consistent with economic efficiency, but this topic is
treated in competition law. Consumer protection can also be asserted via
non-government organizations and individuals as consumer activism.
Consumer law Consumer protection law or consumer law is
considered an area of law that regulates private law relationships between individual consumers
and the businesses that sell those goods and services. Consumer protection covers a wide
range of topics, including but not necessarily limited to product liability, privacy rights,
unfair business practices, fraud, misrepresentation, and other consumer/business interactions.
It's a way of preventing fraud and scams from service and sales contracts, bill collector
regulation, pricing, utility turnoffs, consolidation, personal loans that may lead to bankruptcy.
Australia In Australia, the corresponding agency is
the Australian Competition and Consumer Commission or the individual State Consumer Affairs agencies.
The Australian Securities and Investments Commission has responsibility for consumer
protection regulation of financial services and products.
Germany A minister of the federal cabinet is responsible
for consumer rights and protection. In the current cabinet of Angela Merkel, this is
Heiko Maas. When issuing public warnings about products
and services, the issuing authority has to take into account that this affects the supplier's
constitutionally protected economic liberty, see Bundesverwaltungsgericht Case 3 C 34.84,
71 BVerwGE 183). India
In India, the Consumer Protection Act of 1986 is the law governing consumer protection.
Under this law, Separate Consumer Dispute Redressal Fora have been set up throughout
India in each and every district in which a consumer [complaint can be filed by both
the consumer of a goods as well as of the services] can file his complaint on a simple
paper with nominal court fees and his complaint will be decided by the Presiding Officer of
the District Level. Appeal could be filed to the State Consumer Disputes Redressal Commissions
and after that to the National Consumer Disputes Redressal Commission. The procedures in these
tribunals are relatively less formal and more people friendly and they also take less time
to decide upon a consumer dispute when compared to the years long time taken by the traditional
Indian judiciary. In recent years, many effective judgement have been passed by some state and
National Consumer Forums. Republic of China
Modern Chinese law has been heavily influenced by European civil law systems, particularly
German and Swiss law. The Republic of China Civil Code contains five books: General Principles,
Obligations, Rights over Things, Family, and Succession. The second book of the Code, the
Book of Obligations, provided the basis from which consumers could bring products liability
actions prior to the enactment of the CPL. The Consumer Protection Law in the Republic
of China, as promulgated on January 11, 1994 and effective on January 13, 1994, specifically
protects the interests and safety of customers using the products or services provided by
business operators. The Consumer Protection Commission of Executive Yuan serves as an
ombudsman supervising, coordinating, reporting any unsafe products/services and periodically
reviewing the legislation. According to the Pacific Rim Law & Policy
Association and the American Chamber of Commerce, in a 1997 critical study, the law has been
criticized by stating that "although many agree that the intent of the CPL is fair,
the CPL's various problems, such as ambiguous terminology, favoritism towards consumer protection
groups, and the compensation liability defense, must be addressed before the CPL becomes a
truly effective piece of legislation that will protect consumers"
United Kingdom
The United Kingdom, as member state of the European Union, is bound by the consumer protection
directives of the European Union. Domestic laws originated within the ambit of contract
and tort but, with the influence of EU law, it is emerging as an independent area of law.
In many circumstances, where domestic law is in question, the matter judicially treated
as tort, contract, restitution or even criminal law.
Consumer Protection issues are dealt with when complaints are made to the Director-General
of Fair Trade. The Office of Fair Trading will then investigate, impose an injunction
or take the matter to litigation. However, consumers cannot directly complain to the
OFT. Complaints need to be made to the Citizens Advice Consumer Service who will provide legal
advice to complainants, or re-direct the individual complaint to Trading Standards for investigation.
Due to restrictions within the Enterprise Act 2002, individual complainants are unable
to be told whether their case is being investigated or not. In very rare cases, Consumer Direct
may direct a very large number of complaints to the OFT to be considered as a systemic
complaint. The OFT can also be engaged by consumer groups e.g. The Consumers Association
or the statutory consumer protection body – Consumer Focus – via a super complaint.
The OFT rarely prosecute companies, however, preferring a light touch regulation approach.
Consumer complaints against companies are not published, but investigation work, undertakings
and enforcements are located at. Many of the consumer protection laws e.g. Distance Selling
Regulations 2000 or Unfair Terms in Consumer Contracts Regulations 1999 are actually UK
implementations of EU directives. The OFT is one of the bodies responsible for enforcing
these rules. This leads to a problem in that these examples of legislation are clearly
designed to deal with individual complaints but the OFT will only deal with systemic complaints
and will ignore individual complainants redirecting them back to Consumer Direct.
The Office of Fair Trading also acts as the UK's official consumer and competition watchdog,
with a remit to make markets work well for consumers, and at a local, municipal level
by Trading Standards departments. General consumer advice can be obtained from the Citizens
Advice Consumer Service or via a local branch of the Citizen's Advice Bureau.
United States
In the United States a variety of laws at both the federal and state levels regulate
consumer affairs. Among them are the federal Fair Debt Collection Practices Act, the Fair
Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, and the Gramm-Leach-Bliley
Act. Federal consumer protection laws are mainly enforced by the Federal Trade Commission,
the Consumer Financial Protection Bureau, and the U.S. Department of Justice.
At the state level, many states have adopted the Uniform Deceptive Trade Practices Act
including, but not limited to, Delaware, Illinois, Maine, and Nebraska. The deceptive trade practices
prohibited by the Uniform Act can be roughly subdivided into conduct involving either a)
unfair or fraudulent business practice and b) untrue or misleading advertising. The Uniform
Act contains a private remedy with attorneys fees for prevailing parties where the losing
party "willfully engaged in the trade practice knowing it to be deceptive". Uniform Act §3(b).
Also, the majority of states have a Department of Consumer Affairs devoted to regulating
certain industries and protecting consumers who use goods and services from those industries.
For example, in California, the California Department of Consumer Affairs regulates about
2.3 million professionals in over 230 different professions, through its forty regulatory
entities. In addition, California encourages its consumers to act as private attorneys
general through the liberal provisions of its Consumers Legal Remedies Act,
California has the strongest consumer protection laws of any US state, partly because of rigorous
advocacy and lobbying by groups such as Utility Consumers' Action Network, Consumer Federation
of California and Privacy Rights Clearinghouse. Other states have been the leaders in specific
aspects of consumer protection. For example Florida, Delaware and Minnesota have legislated
requirements that contracts be written at reasonable readability levels as a large proportion
of contracts cannot be understood by most consumers who sign them.
Constitutional laws 46 national constitutions currently in place
include some sort of consumer right. Laws
Competition law United Kingdom
Supply of Goods Act 1973 Unfair Contract Terms Act 1977
Sale of Goods Act 1979 Supply of Goods and Services Act 1982
Consumer Protection Act 1987 Unfair Terms in Consumer Contracts Regulations
1999 Consumer Protection Regulations 2000
Electronic Commerce Regulations 2002 Enterprise Act 2002
Sale and Supply of Goods to Consumers Regulations 2002/3045
General Product Safety Regulations 2005 Consumer Protection from Unfair Trading Regulations
2008 United States
Consumer Product Safety Act – gives the Consumer Product Safety Commission the power
to develop safety standards and pursue recalls for products
Federal Trade Commission Act – created the Federal Trade Commission to prevent unfair
competition, deceptive acts, regulate trade, etc.
Privacy laws United States National Do Not Call Registry
– allows US consumers to limit telemarketing calls they receive.
Food and drug Pure Food and Drug Act – led to the creation
of the U.S. Food and Drug Administration to regulate foods, drugs, and more.
Communications Communications Act of 1934 – created the
Federal Communications Commission to regulate all radio and interstate cable, phone, and
satellite communications. Banking
Fair Credit Reporting Act – regulates the collection, dissemination, and use of consumer
credit information Fair Debt Collection Practices Act – eliminates
abusive consumer practices, ensure fairness, etc.
Truth in Lending Act – requires clear disclosure of key terms of the lending arrangement and
all costs. Real estate
Real Estate Settlement Procedures Act – prohibits kickbacks and requires lenders to provide
a good faith estimate of costs Health insurance
Health Insurance Portability and Accountability Act – provides consumer protection for health
information Digital media
Digital Millennium Copyright Act – prohibits production or sale of devices or services
intended to circumvent copyright measures. Digital Media Consumers' Rights Act – would
repeal the Digital Millennium Copyright Act Australia
The Australian Consumer Law Division 2 of Part 2 of the Australian Securities
and Investments Commission Act 2001 in relation to financial services and products
See also Consumer issues
People
References
Further reading Klein, Daniel B.. "Consumer Protection". In
David R. Henderson. Concise Encyclopedia of Economics. Indianapolis: Library of Economics
and Liberty. ISBN 978-0865976658. OCLC 237794267. Mańko, Rafał. "The notion of 'consumer'
in EU law". Library Briefing. Library of the European Parliament. Retrieved 6 May 2013.
External links Consumers International
Consumer Protection Act 1986 Health-EU Portal Consumer Safety in the EU
OECD Consumer Policy Toolkit Report About Econsumer.gov, a portal for consumers
to report complaints concerning online and related transactions with foreign companies
International Consumer Protection and Enforcement Network