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Chap017

The Legal and Regulatory Environment of Business

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Chapter 17 - Consumer Protection CHAPTER 17 CONSUMER PROTECTION l. LEARNING OBJECTIVES The objectives of this chapter include understanding what a consumer is and how consumer protection fits into the property-based legal system . Students should understand that at the federal level the principal consumer protection comes from the Federal Trade Commission, but that politics influenced this mission. Students should also grasp the provisions of various consumer and financial protection laws concerning lending, credit reporting protection, debt collection, and bankruptcy and that because these laws provide for consumers to take private action, they are not as susceptible to political considerations as is the determination of unfair or deceptive trade practices by the FTC. ll. REFERENCES Marsh, Gene A., Consumer Protection in a Nutshel l, West Publishing Company, (1999). Vulkowich, William T., Consumer Protection in the 21st Century: A Global Perspective , Transnational Publishers (2002). Weatherill , Stephen, Consumer Protection , Ashgate Publishing (2005). Bankruptcy Abuse Prevention and Consumer Protection Act of 2005: Law & Explanation . CCH (2005). Jasper, Margaret, Consumer Rights & the Law (Oceana's Legal Almanac Series: Law for the Layperson ), Oxford University Press (2007). lll. TEACHING OUTLINE 1. Who Is a Consumer ? A. Emphasiz e: (1) The case Anderson v. Foothill Industrial Bank . (Appendix, Case17-1). 17-1
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Chapter 17 - Consumer Protection Answers to CASE QUESTIONS: 1. The consumer is a person other than an organization who incurs debt or acquires something primarily for a personal, family, household or agricultural purpose. 2. The borrowers do not win because the court determines they were borrowing for a business purpose. 3. Becomes part of the proceeds were to be used to pay off a second mortgage on the consumer's residents. 4. According to the statute, a farmer is considered a consumer in Wyoming. THE FEDERAL TRADE COMMISSION 2. The FTC and Trade Practice Regulation A. Emphasize : (1) That the FTC engages in trade practice regulation, which prevents those who would deceive consumers from diverting trade those who compete honestly. (2) The FTC also protects consumers directly by regulating “unfair or deceptive trade practices.” (3) The FTC issues advisory opinions on a specific business’ practice and sometimes industry guides that specify the Comission’s view of the legality of a particular industry's trade practices. (4) The FTC pursues cases brought against specific businesses and also issues rules like the one establishing the national do not call list. These rules establish what constitutes unfair or deceptive trade practices. (5) That as with other regulatory agencies the Commission issues both consent orders and cease and desist orders. 3. FTC Penalties and Remedies A. Emphasize : (1) The basic penalty for a trade practice violation under the FTC act is a civil fine for violation of both consent orders and rules of not more than $10,000 per violation.
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