Have you ever found yourself facing an unprecedented issue with a product you purchased? Perhaps the new smartphone you bought had a broken GPS. Or maybe you discovered certain ingredients in a food item that wasn’t listed. These types of issues occur daily and while something like this may not have happened to you, many consumers have been mistreated whether intentionally or not by certain brands. Luckily for us, there are laws that are in place to protect us from such things occurring. They are known as Consumer Protection Laws, and are designed to protect the consumer from unsafe, unfair, or misleading business practices. Today, we will learn what exactly consumer protection laws are, how they work, and why they matter to you.
What are Consumer Protection Laws?
Consumer protection laws are statutes and regulations that protect the rights of consumers by regulating businesses and protecting their interests in transactions. These laws vary from state to state, but generally include prohibitions on unfair or deceptive practices, requirements for accurate information disclosure, and provisions for redressal of consumer grievances.
Consumer protection laws exist to help protect individuals from being taken advantage of in transactions with businesses and ensuring they receive quality goods and services at fair prices. By ensuring that consumers are fully informed about what they are purchasing and have access to appropriate recourse if they feel they have been wronged, Consumer Protection Laws help ensure a level playing field for all parties involved in a transaction.
Why are Consumer Protection Laws Important?
We now understand what consumer protection laws are but knowing why they are a thing is just as important. It’s no surprise that there are many businesses that will do whatever they can to make a profit and prevent losses. This isn’t always a bad thing of course, but there are some businesses that take things way too far. If a person feels like they have been misled or mistreated by a business after a transaction, they are able to take action against them thanks to consumer protection laws.
If consumer protection laws did not exist, the relationship between customers and businesses would be a very toxic one. Depending on the level of offense, it can already be difficult to win against a business in a court or a claim. Without consumer protection laws, large businesses would be able to simply ignore consumers when faced with backlash or discontent with their goods or services.
What are the Types of Consumer Protection Laws?
It is now clear what consumer protection laws are and why it is important that they are a thing. You might find yourself now asking, what types of consumer protection laws there are. Here is a list of just a few of these laws:
- The Federal Securities Act – This act is designed to prevent the sale of investment contracts (known as securities). It was created during The Great Depression and makes it so businesses are required to disclose the details of business plans.
- The Dodd-Frank Act – The Dodd-Frank Wall Street Reform and Consumer Protection Act (usually shortened to just Dodd-Frank Act) was made in response to some of the practices of banks and financial institutions during the 2008 financial crisis. It limits the amount of power banks have and prevents them from becoming too big.
- The Fair Credit Reporting Act – As its name implies, the Fair Credit Reporting Act was signed to limit who is able to access a consumer’s credit history. It also allows consumers to read their own credit reports and to contest any information on them that might be inaccurate.
- The Federal Trade Commision Act – The Federal Trade Commission Act is what established the Federal Trade Commission (FTC). The FTC’s mission is to protect consumers by preventing deceptive, anticompetitive, and unfair business practices. You may be familiar with the FTC due to their efforts to stop robocalls and the ability to report
violations on their website.
What are the Penalties for Violating Consumer Protection Laws?
As we have learned, consumer protection laws are designed to protect consumers from illegal business practices. We haven’t really learned what happens to businesses that commit these violations, however. Depending on what type of violation is made, a business will have different penalties. The most common type of penalty is a fine, which varies depending on the severity of the offense. This also varies state by state, so there is no clear answer to the question of how much.
You now know what Consumer Protection Laws are, what they do to protect consumers, and why they are so important. In an age where scammers are more prevalent than ever and businesses will do whatever unethical practices in order to save money, such laws are necessary. Simply being aware of the fact that you have rights in certain matters goes a long way.