If you market and sell services or products to consumers, you should be aware of laws that can get you in trouble if you violate them. Below are just some of the state and federal laws meant to protect consumers from unfair business practices as shared by a corporate transaction lawyer. State laws vary, so you should contact your attorney to learn which one may apply to you.
Our economy offers possibly the planet’s broadest choice of products and services. But given this variety and the ease with which we can purchase them over the internet, there are vast opportunities to make money through fraud, theft, and scams. Consumers become victims to a deceptive seller of services or goods, a debt collector, a bank, or another company taking advantage of unknowing customers.
We have devised ways to protect buyers through common law and statutes on the state and federal levels. They also protect ethical, law-abiding businesses from unfair competition by companies that may become more profitable and grow their customer base by cutting corners and violating the law.
Consumer protection laws may be enforced by government agencies, lawsuits on behalf of state or federal governments, or by private legal actions filed by affected parties.
Deceptive Trade Practices
The Federal Trade Commission Act created the Federal Trade Commission. This agency enforces antitrust statutes and promotes consumer protection. Their Bureau of Consumer Protection investigates deceptive trade practice complaints. States have consumer protection statutes that make illegal business deception and have their own agencies. State laws may offer more protection than federal law and cover smaller businesses.
Privacy Protection
Securing consumers’ personally identifiable information (PII) helps prevent identity theft and other types of fraud. Many statutes cover how specific industries handle and store PII. The Health Insurance Portability and Accountability Act (HIPAA) is one of the best-known and most comprehensive. It protects consumers’ privacy by creating national standards for handling and keeping confidential medical records.
The FTC created the National Do Not Call Registry (DNCR) to comply with the Do-Not-Call Implementation Act of 2003. Consumers sign up online, and telemarketers have 31 days to stop calling their phone numbers. Telemarketing firms should also maintain their own lists as our friends at Focus Law LA would recommend.
Product Safety
The Consumer Product Safety Act and the Federal Food and Drug Act contain safety requirements for consumer products, especially drugs, food, and cosmetics. The federal Food and Drug Administration and the Consumer Product Safety Commission enforce many of these laws and regulations.
Product Liability
Most product safety-related consumer protection statutes try to prevent consumers from injuring themselves with defective products. Another approach is lawsuits filed by parties after injuries occur. They may be unsafe whether or not they’re covered by a consumer protection law.
Product liability law can be considered part of consumer protection law because it spreads awareness of potentially dangerous products. Cases can also raise the price of selling something to the point that it is made safer or pulled off the market.
These lawsuits may name any party that put the product into the marketplace, including manufacturers, distributors, and sellers. These compensation claims may be based on negligence, deceptive practices law (the defendant falsely advertised a dangerous product as safe), or product liability laws.
Product liability law doesn’t depend on an intent to sell something dangerous or even that the product was negligently made and sold. Liability can attach because a product is unsafe for its intended purpose and it injured the plaintiff.
It can be unsafe for one or multiple reasons, including:
- Design defect: No matter how well-built or clear the instructions or warnings, the design is so poor it can inflict harm when used as directed
- Manufacturing defect: The product may be well-designed, but how it’s assembled or manufactured makes it dangerous. The parts used may be sub-standard, or workers do a poor job of putting it together
- Marketing defect: The product is advertised for a dangerous use, or its instructions or warnings don’t adequately put the consumer on notice of how harmful it may be if used a certain way
Product liability cases can be difficult to prove, but successful ones may involve substantial awards to successful plaintiffs.
Talk to your attorney to learn more about product safety laws and get legal help if you’re put on notice by a government agency or a private party that you may have violated one.