Essay on "Consumer Awareness of Consumer Rights"

Essay 5 pages (1779 words) Sources: 1

[EXCERPT] . . . .

Consumer Rights -- Consumer Awareness of those Rights

What is the level of awareness of American consumers regarding their rights? What agency in the U.S. is mainly responsible to protect consumers from fraud and deception? What are some of the issues that consumers should be aware of but perhaps are not aware of? What has the federal consumer protection agency done to protect consumers in recent legislation? These issues and others will be presented in this paper.

Literature on Consumer Rights

The principal federal agency that is responsible for consumer protection and consumer information is the Federal Trade Commission (FTC). According to the FTC, it is the "only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy" (FTC). The FTC explains that it doesn't merely send out press releases to point to what it believes are fraudulent business enterprises, and do cursory investigations. In fact the FTC claims it: a) "pursues vigorous and effective law enforcement"; b) "advances consumers' interests by sharing its expertise" with agencies in states and in the federal government, as well as with "international government agencies"; c) holds hearings, conducts workshops and conferences in order to develop consumer-friendly policies; and e) it produced educational programs (in "plain language") that assist consumers and businesses that now compete globally with "constantly changing technologies" (FTC).

The federal government in 1914 launched this agency; it was called the "Bureau of Corporations"; its mission at that time was to "prevent unfair methods of competition in commerce." But in fact it was created to be part of the "trust-busting" policy that President Theodore Roosevelt persuaded Congress to establish.

As the years went by Congress passed additional legislation to give the agency more power to intervene when there were anticompetitive practices. In 1938, a law was passed in Congress that took the agency into the consumer milieu; the law was to fight "unfair and deceptive acts or practices" in businesses and their advertising policies. The Federal Trade Commission is asked to administer laws that Congress passes, but n 1975 Congress gave the FTC tremendous additional power by authorizing the FTC to "adopt industry-wide trade regulation rules," which it has done consistently (www.ftc.gov/ftc/about.shtm).

In regard to the FTC's efforts to deal with "identity theft," any consumer that believes he or she may have had their identity violated, the FTC sends out an informational fact sheet. The FTC assumes, probably correctly, that many consumers are simply not aware of their rights when something goes wrong or something untoward occurs to interfere with a consumer's privacy or rights. The FTC publishes a summary of consumer's rights under the Fair Credit Reporting Act (FCRA), and explains in the document that credit reporting agencies keep files on consumers and they sometimes sell information about: a) a consumer's check-writing histories; b) a consumer's medical records; and c) a consumer's rental history records (FTC).

And so what rights are in place for a person whose identity has been swiped? The consumer may not know these things but under the law he and/or she has a right: a) to ask all three of the nationwide consumer reporting agencies to place "fraud alerts" in your personal file (this makes it hard for someone to get credit in your name); b) to be given free copies of all the information in your files in the three nationwide consumer reporting agencies (Equifax; Experian; and TransUnion); c) to be told about any information in your file has been used "against you"; d) to ask for a credit score; e) to dispute "incomplete or inaccurate information"; f) to seek damages from those who use your files inappropriately; g) to obtain documents relating to fraudulent transactions that may have taken place because a person or company was using your personal information; and h) to block any and all information from consumer reporting agencies that you believe was stolen from your files (FTC).

Among the recent consumer-related legislation the FTC must keep up with -- and inform consumers about -- is the recent law, Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 (also known at the "Credit Card Bill of Rights." Although this legislation was one of President Obama's very well publicized promises during the campaign, and the legislation received a great deal of fanfare through the media as it worked its way through the Congress, many consumers likely do not know that they have protection from unfair credit card company policies.

According to Reuters News Service, as of August, 2009, credit card companies have been forced by law to give consumers a better deal. For example, credit card companies now must give customers at least 21 calendar days to pay their monthly bills; and moreover, credit card companies will have to "…warn consumers 45 days in advance of major changes in conditions," based on the law President Obama signed in May of 2009 (Lagorio, 2009, p. 1). Any change in terms by the credit card company -- that have an effect on the consumer -- must allow 15 days from the time the consumer receives the notification until that new policy goes into place.

Also, credit card companies have to send bills to customers 14 days prior to the bill's due date, and when there are policy changes, consumer are now able to "reject the changes set by credit cards, and arrange a plan to cancel the debt and close the credit card account" (Lagorio, p. 1). The Consumer Watchdog group's president, Jamie Court, said it does "even the power between consumers and credit card companies" but she adds that it "…doesn't prevent credit card companies from charging really significant interest rates if they can find a reason to do it" (Lagorio, p. 1). In the past twenty or so years credit card companies had profited enormously because money was cheap and the companies adjusted fees "according to customers' performance in paying on time, Lagorio writes.

The consumer outrage that followed the bailouts to banks (during the economic collapse in 2008) led to the need to put the lid on credit card companies' policies. The very banks that were charging outrageous percentages to customers were now the recipients of federal bailout money.

"If Uncle Sam is giving free money to banks who have already received at least tens of billions of collars from the federal government as bailouts," Court asserted, "then the…taxpayers should know that there is a national cap on how much they can be charged" (Lagorio, p. 1). How many consumers were aware that banks that were receiving millions of dollars to bail them out issued their credit cards? There is no way of knowing that, but one way for consumers to be more informed of their rights is through NGOs (non-government organizations) like Consumer Watchdog.

For example, there is a big privacy issue related to Google, connected to Google's gathering of "street view" video of every street in the U.S., Canada, and thirty other countries. A person searching for a route to an address goes through "Google Maps" and when that address at that specific street is located, in some computers (and using "Google Earth") the user can actually see a video of what the house looks like, how the street is accessed, the neighbor's houses, etc. The video actually shows the roof, the front of the house, all the cars along the street and the street numbers on the houses.

Meanwhile, while gathering that video documentation, Google's video cars were equipped with data-gathering technologies that actually recorded data from "unsecured Wi-Fi networks" in millions of households along the way to recording all the houses and businesses on all the streets in the country, in Canada, and in approximately 30 other countries. Google did not deny this. In fact Google says it has gathered "600 gigabytes of data -- roughly equivalent to 300 million printed pages -- that Google says it inadvertently collected," according to a story in the San Jose Mercury News (Swift, 2010). So the FTC conducted an investigation, and the director of the FTC's office of consumer protection, David C. Vladeck, said in October, 2010, that Google promised it won't use that data, so the investigation is closed.

"Google has made assurances to the FTC that the company has not used and will not use any of the payload data in any Google product or service, now or in the future," Vladeck said (Swift, page 10). Moreover, Vladeck said Google's assurance is "critical to mitigate the potential harm to consumers from the collection of payload data" (Swift, p. 1).

But even though the FTC said it is satisfied that Google won't use any of this data -- consumers certainly were not aware they were being monitored and in fact that their emails, passwords, and website addresses were recorded due to Wi-Fi in private homes -- the Consumer Watchdog people are not satisfied. John Simpson, with Consumer Watchdog, claims the FTC did not conduct a "meaningful investigation" and in fact let Google off the… READ MORE

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