THE POWER OF THE CONSUMER

Chapter 1Section 1

You’re a Consumer

As a consumer you use goods and services. Goods– physical objects that are

produced. Services—actions that are performed

for someone, such as repairing a car, serving a meal, or caring for a child.

You each play three key roles! Consumer Worker—the producer of goods and

services. Citizen—You use public services such

as schools and roadways. You pay taxes in order to pay for these services, and you have the right to vote for elected leaders.

The Power of the Consumer

Individually the power of each consumer may seem small, but collectively, the purchasing decisions made by consumers have a huge impact.

Consumers buy a businesses product leading to profit for the business, the business then pays current works and hired new one. These workers in turn become consumer spending money and continuing the growth of the economy. During this time the business focus on developing new and better products to please the consumers.

Teenage Consumers

Have played a very vital role in the economy. Teens are now estimated to spend of $170 billion dollars each year.

Because of this marketing often targets teenagers.

School

Technology and the Consumer

Technology has change the way consumers buy. Consumers are able to get information

at a faster rate and greater amount through TV and the internet.

Consumers are also faced with more decisions and easier methods for purchase, leading to more impulse buying.

What makes an Effective Consumer!

Effect consumers set goals—they decide what they want and how to best carry out this plan.

Effect consumers think critically—They make decisions based on careful consideration of the alternatives and their possible outcomes.

Effective consumers do their research—they read, observe and ask question.

What makes an Effect Consumer! Effective consumers manage

everyday finances—they handle their income, expenses, taxes, banking, and credit in a responsible way.

Effective consumers plan for financial security—They set up savings, investing and insurance plans.

PROTECTING CONSUMERS’ RIGHTS

Section 1.2

The Consumer Movement

Up until the beginning of the 1900’s consumers had little voice in the issues that effect them.

The consumer movement and the rise of consumer advocates changed this…

Pioneers of the Consumer Movement

Harvey Wiley—a doctor who’s work against harmful products in foods and drugs lead to the creation of the Food and Drug Act of 1906

Upton Sinclair—Wrote The Jungle which focus on the horrible conditions of America’s meat and processing plants, this lead to the Meat Inspection Act of 1906

Rachel Carson—wrote Silent Spring, which focus on dangerous pesticides used in food production.

Stuart Chase—wrote Money’s Worth in 1927, which was a leader in improper advertising practices.

Ralph Nader—Unsafe at Any Speed, a leader in the car safety movement.

Consumer Rights and Responsibilities

Consumer Rights Consumer ResponsibilitiesRight to safety Responsibility to use products

safelyRight to be informed Responsibility to use informationRight to Choose Responsibility to choose carefullyRight to be heard Responsibility to speak upRight to redress Responsibility to seek redressRight to consumer education Responsibility to learnRight to service Responsibility to reward good

service

Federal LawsFederal Law What it doesFair Packing and Labeling Act

Requires truth in packaging to help consumers compare goods.

Food, Drug and Consumer Act.

Assure consumers of the safety and purity of food products, drugs and cosmetics

Federal Hazardous Substance Labeling Act

Required warning labels on all products that may be hazardous.

Child Protection and Toy Safety Act

Bans the shipment of sales, and shipment of children toys and goods that may be dangerous.

Automobile Information act

Requires that manufactures label vehicles with specific information

Textile Fiber Products Identification act

Requires manufactures of textiles and fabrics to provide labels listing fiber content and other information

Truth in Savings Act Requires financial agencies to provide figures such as interest rates.

Truth in Lending Act. Requires creditors to report all credit charges and interest rates to the consumer

Equal Credit Opportunity acts Protects those who apply for credit from discrimination

Financial Services Modernization Act Requires financial agencies to notify customers about the kinds of information they collect about them, how that information may be used, and their privacy rights.

Federal Agencies

Federal Trade Commission Consumer Product Safety

Commission United States Department of

Agriculture Food and Drug Administration Federal Communication Commission National Telecommunication and

Information Administration Federal Consumer Information

Center.

Consumer Groups

These organizations are focused on consumer education, protection, and advocacy.

Consumer Testing Agencies and Publications. These independent testing centers

test products for effectiveness, and safety.

Business and Industry groups Such as the Better Business Bureau,

help to protect consumer by keeping track of those businesses that have shown less then excellent business standards.

News and Media

Mass communication, such as newspapers, magazines, TV and websites that help rate businesses and their customer service.

**Eight on Your Side

SAFEGUARDING YOUR PRIVACY

Section 1.3

Identity Theft

One of the most significant threats to personal security is IDENTY THEFT!!! SOCIAL SECURITY NUMBER: this a

unique nine digit number that is used by the SS administration to keep track of what you earn.

It can be used to access bank and credit card records as well as other personal information

How it Happens!!!HOW INFORMATION IS OBTAINED

*Stolen wallets and purses*Stolen Mail*They change your mailing address*Information taken from your garbage*Finding and stealing personal information from your home.*Stolen information from the internet.*They pose as those you should trust with the information.*Looking over your shoulder

HOW THEY USE THAT INFORMATION

*They open a bank account in your name, and write bad checks.*They forge checks and drain your bank account*They order phones and wireless services in your name.*They run up bills for which you become responsible.

Preventing Identity Theft

Handle mail with care Keep items with personal information in a safe

place or locked drawer. Safeguard sensitive information on your computer

or online with passwords that include both numbers and letters.

Don’t give out personal information through unsafe means.

Use only secure website; shttp:// or https:// Ask service provides for safeguards. Before you discard receipts and other personal

information shred it.

If Your Identity is Stolen File a report with the police Notify your bank and credit card

company Call the three major credit reporting

agencies—Equifax, Experian, and Trans-Union

Call the FTC

How Companies Use the Information You Provide

Reputable business keep credit card numbers secure and don’t share them with anyone.

Your name, address, and purchasing history in its customer database for its own marketing purpose.

The company might sell your name and address t other retailers, either directly or through data-collection companies.

Your responses to product survey’s may be used in future mailings.

Protecting Your Privacy

Financial Services Modernization Act: Passed in 1999 Requires companies involved in financial

activities to send privacy notices to customers.

These notices must explain company policy regarding the sharing of customers’ personal information with other business.

Online Profiling

A practice in which companies collect information about the Web sites people visit, and then use that information to predict what the consumers may buy in the future. Cookies, small files that are stored on

your computer's hard drive when you visit a site.

Protecting Your Privacy

Children’s Online Privacy Protection Act of 1998 IT requires website directed at children

under 13 to post their privacy policy through a link on their home page and anywhere personal information is being collected.

Internet Safety Taking steps to prevent online harassment

and to deal with it if it occurs . Reveal as little personal information as possible. Share your primary e-mail address with trusted

friends and family. Watch what you say online. Avoid creating

enemies. Use the preference options to block transmission

of mail, chat or instant messages from anyone who persists in bothering you.

If someone is harassing or threatening you, save the communications as proof.

RECOGNIZING DECEPTION AND

FRAUDSection 1.4

Deceptive Advertising

This is advertising that is likely to mislead consumers through false statements, omitted information, or other unfair means. Deceptive advertising is illegal, and the FTC is empowered to stop it. Bait and Switch False promise of free gifts Deceptive pricing Hidden catches.

Fraud

Fraud is deceitful conduct designed to manipulate another person for some gain.

Pyramid scheme

A common example of fraud is the pyramid scheme, an illegal get-rich-quick plan.

Chain Letters

This is a message sent via postal mail or e-mail that instructs the recipient to send copies to a certain number of other people.

Reporting Deception and Fraud If you suspect deception or fraud

rather or not you actually fall victim report the situation.

Resolving Consumer Conflict Step to consumer conflict:

Contact the merchant verbally Write a letter of complain with a follow-

up if needed. Move to dispute resolution: Mediation

and Arbitration. (Binding Arbitration.) Next seek legal action if neccessary

Legal steps to resolution

Small claims court—This is a court where you can settle disputes of small dollar amounts. These cases are handled my a judge. (Think Judge Judy), in Illinois these courts handle disputes under $10000.

Lawsuit—These actions are sought when the amount of damage or goods reaches over the amount small claims courts can handle.

Class Action Suits—A lawsuit filed on behalf of a group of people who all have the same complaint. (Erin Brockovich)

Review Assignment

Reviewing Key Terms and Ideas #1-15

Thinking Critically #3 (Make sure this one appears in proper sentence and paragraph form. It will require thought and I expect answers that show that.)