Professional Documents
Culture Documents
Consumerprotection
Consumerprotection
• Problems include:
– Expense
– Length of time
– Alienation
– Adversarial
• Alternatives
– Facilitating access to courts
• Legal aid for the needy
• Contingent fee system
• Permit paralegals to perform attorney functions
– Court substitutes (ADR)
• Statute-based tribunals
• Arbitration
• Ombudsman
• Assessing efficacy of ADRs
– Access
• Widespread publicity
• Cost
• Accessibility
– Fairness
• Independent
– Transparency
– Effectiveness
• Scope comprehensive
• Procedures simple
• Rules of evidence relaxed
• Speedy
• Decisions binding on industry
Part II: Consumer Protection in the
Marketplace
Consumer Information and Choice
• 1. Preparatory action
– Surveillance of products in the market
– Data collection (local and foreign sources)
• “Consolidated List of Products Whose Consumption and/or
Sale Have Been Banned, Withdrawn, Severely Restricted, or
Not Approved by Governments”
• 2. Regulatory action
– Development of product safety standards
• 3. Monitoring action
– Testing by government or reliable
independent consumer organizations
• 4. Corrective action
– Impose product bans
– Warning notices
– Product recalls
– Seize stocks
– Destroy stocks
– Require modifications of the product
• 5. Compensatory actions
– Compensate consumers for loss
– Deter future wrongdoing
Consumer Credit
• Credit increases demand for and
consumption of goods and services
• Critical to economic growth
• Unfettered growth of credit has negative
consequences
– Impulse buying
– Extra costs associated with credit
– Excessive debt
• The poor pay more
– Ineligible for credit in many stores; thus buy shoddy
goods at higher prices
– If credit advanced, higher rates charged
• Credit often advanced to individuals with a
history of default
• Increased complexity of transactions (e.g. home
equity loans/lines of credit) require more
complex documents
– More difficult to understand and compare terms,
including cost of credit
• Consumer credit laws should
– Require lenders to provide consumers with copies of
all documents
– Establish a single method of calculating interest rates
– Conspicuously disclose the rate
– Control the price of credit
– Regulate credit-related insurance
– Provide right to cancel (“cooling off” period)
Electronic commerce
• 1996 fewer than 40 million connected to internet
• 1997 number increased to 96 million
• 2005 predicted to be nearly 1 billion