Consumer Rights
What Are Consumer Rights?
Consumer rights refers to a collection of laws that protect people when they interact with businesses and buy their products or services. Consumers have rights to fair business practices and to not be subjected to abusive business practices.
This area of the law covers a lot of different situations, from deceptive advertising to predatory lending. Some of the abusive business practices are minor and unfair, while others are more serious and constitute fraud.
What Laws Protect Consumer Rights?
Consumer rights cover many types of businesses and are enshrined in multiple laws at the federal and state levels. Government agencies, like the Federal Trade Commission and the Consumer Financial Protection Bureau, enforce the laws, field complaints from consumers, and investigate questionable business practices and fraud.[] Some of the important laws that protect consumer rights include:
Fair Credit Reporting Laws
Personal credit is an important part of consumer rights because it determines if and how consumers can get loans and make big purchases, like cars and homes. The Equal Credit Opportunity Act outlaws discrimination by creditors based on age, marital status, sex, race, color, national origin, or religion.
The Fair Credit Reporting Act and the Fair and Accurate Credit Transaction Act protect consumers from incorrect information in credit reports. They also address privacy issues and direct how information can be collected and used in credit reporting.
Lending Laws
The Truth in Lending Act requires lenders to give borrowers complete disclosures of a loan’s terms and costs. The document describes all fees, interest, final costs, and the borrower’s rights. The Consumer Leasing Act has similar requirements for lease agreements.
The Fair Credit and Charge Card Disclosure Act requires companies to fully disclose the terms of a credit card to consumers. The Fair Credit Billing Act protects against unfair billing, like unauthorized charges and other disputed charges.
Privacy Laws
The Federal Trade Commission enforces promises made by companies to protect consumer information. It also addresses and enforces other privacy laws, like the Gramm-Leach-Billey Act, which protects personal information in the hands of financial institutions.
The Identity Theft and Assumption Deterrence Act protects consumers from identity theft. The law made identity theft a federal crime. It outlines rights consumers have as victims of this crime.
Consumer Safety
Federal law protects consumers, not just from deceptive or fraudulent practices but also from harmful products. The Consumer Product Safety Act requires that products meet certain safety standards. The agency responsible for enforcement is the Consumer Product Safety Commission.
The Federal Food and Drug Act holds drugs, foods, and cosmetics to similar safety standards. It is enforced by the Food and Drug Administration, or FDA.
Most state laws allow consumers to sue for damages caused by a defective drug or product if one or more defects can be proven:
- A design defect makes the product inherently unsafe.
- A manufacturing defect made an otherwise safe product unsafe.
- A marketing defect promotes a use for the product that is unsafe.
The Real Estate Settlement Procedures Act
This law protects consumers from deceptive practices in real estate. It prohibits things like kickback payments between realtors and construction companies or lenders. It requires that lenders provide fair and good-faith estimates for the cost of a loan.
Lemon Laws
States have lemon laws that protect consumers from defective used cars. The laws vary by state but generally require that sellers disclose any defects and make reasonable attempts to repair cars that turn out to be defective.
Marketing and Advertising
The Consumer Protection Agency is responsible for holding businesses accountable for deceptive advertising and marketing practices. Information in ads and marketing materials that are misleading to consumers is considered deceptive. It could be an outright lie, an unproven claim, or omitted information about a product or service.
The CAN-SPAM Act regulates electronic communications to protect consumers from spam. It requires accurate subject lines in emails, opt-out methods, and transparency about the business sending the message and its location.
The Telephone Consumer’s Protection Act protects consumers from telemarketing by phone. It prohibits harassment and deceptive calls. It also regulates the National Do Not Call Registry.
What Can I Do if My Consumer Rights Have Been Violated?
The laws protecting consumer rights give you a few options for taking action if a business violated your rights:
- File a complaint. Federal and state government agencies that enforce consumer protection rights take complaints and may choose to investigate. Your complaint may not be addressed, as many agencies are stretched thin, but it may be worth a try. You can also try your state attorney general’s office.
- File a lawsuit. You can file a lawsuit against a company that violated consumer protection laws or committed fraud if those actions resulted in damages. In many instances, the damages are not significant, so this step can be fruitless.
- Start or join a class action. One way to hold a company accountable even if your damages are small is to join with others who have suffered damages. A class action suit represents a group of plaintiffs and may get a better result in the court system.
- Go to small claims court. Another option if you have suffered only minor losses is to take a company to small claims court. The amount of money you can recover in small claims court varies by state, from just $2,500 in Rhode Island to $25,000 in Delaware.
Consumer rights are important for protecting people from fraud, deception, and other unfair practices that can cost them money or even physical harm. If you believe your rights have been violated, a lawyer specializing in consumer laws can advise you and give you options.