The goal of consumer defense is to protect consumers from deceptive and fraudulent marketing practices that may lead to a bad outcome in a commercial transaction. Various laws and regulations are used to accomplish this goal, including state consumer protection laws, the Food and Drug Administration, and the Securities and Exchange Commission.
The first form of consumer protection is the right to be protected by law against fraud, deception, or illegal acts. This includes the right to be informed of a product or service, the right to choose, and the right to have a fair and reasonable price for goods and services.
These rights are important because they provide the consumer with a foundation for trust. When a consumer can trust the producer, economic activity is more likely to flourish.
This is why consumer rights are enshrined in the United States Constitution, as well as in many other international treaties and laws. The basic tenets of these rights are:
Article 27 People’s Rights
In a contract, a business promises a service or good in exchange for a payment. When that promise is breached, the business must redress its wrong through an effective remedy. Often this means seeking recovery from the individual who is harmed, whether the claim is against a stranger or against a contractual partner.
As long as the individual has a property interest in the breached property, that person can recover. This is an enforceable right, regardless of the circumstances surrounding the breach, and it should be available for all one- way contracts.
If the individual is not able to seek recovery from an individual, then that person should be able to pursue legal remedies against the business in the court of law. This is what is known as “vindication of rights” and “access to justice.”
These remedies are practical and powerful. It is not surprising, therefore, that they are so frequently the focus of advocacy efforts to strengthen consumer protections through enforcement by the Federal Trade Commission and private class actions.
While this approach can be successful, it is not without its limitations and risks. Moreover, the lack of enforcement creates an incentive for businesses to draft their own terms of contract that circumvent the law’s efforts to protect consumers.
The second approach to consumer defense is government regulation. Governments can regulate consumer behavior through the creation of licensing and housing codes, as well as through occupational and safety standards for workers and consumers.
Using these regulatory mechanisms, governments can police market participants for their unlawful practices and punish them when they commit violations. They can also require disclosures of information regarding a product or service.
In addition to these interventions, some companies specialize in defending consumer interests by offering products and services that are designed to help consumers make informed decisions about purchasing and using products and services. These companies include SquareTrade and other warranty-based intermediaries that supplement the warranty term provided by the retailer or manufacturer.
