What is Consumer Rights Law?
Consumer rights and consumer protection law provides a way for individuals to fight back against abusive business practices. These laws are designed to hold sellers of goods and services accountable when they seek to profit by taking advantage of a consumer's lack of information or bargaining power. Some conduct addressed by consumer rights laws is simply unfair, while other conduct can be described as outright fraud. Consumer rights laws exist at the federal and state level. They are enforced by government agencies, offices of attorneys general, and through individual and class action lawsuits filed by victims.
Types of Consumer Protection Cases
The most common kinds of abusive business practices occur when consumers are in particularly vulnerable circumstances. For example, when people fall behind on their bills, debt collectors are in a position to make life even more difficult by calling in the early morning or late night hours, making contact at a person's place of business, and speaking to friends and family. Consumer rights laws prohibit this sort of activity. In fact, under the Fair Debt Collection Practices Act (FDCPA), such harassment can result in a statutory damage award of $1,000 for the victim, plus the attorney fees incurred in bringing the suit.
Predatory lending also forms the basis for a large number of consumer protection lawsuits. These schemes cover a broad range of conduct, such as charging exorbitant interest rates on credit cards and other loans, hiding fees and penalties in the fine print of agreements seldom read by customers, and applying payments to low-interest portions of a loan balance first. Sadly, the foreclosure crises of 2010 exposed numerous lending scams in the real estate market. Federal legislation aimed at predatory lending includes the Truth in Lending Act (TILA) and the Home Ownership and Equal Protection Act (HOEPA) of 1994.
Consumer rights laws also protect the public from false or misleading advertising. For example, automobile dealers have been known to advertise a vehicle at a reduced price in order to draw shoppers to the dealership. Once they arrive, however, that vehicle or sales price is no longer available. The dealer will then pressure shoppers into purchasing a vehicle on less favorable terms. In addition to these "bait and switch" advertising tactics, consumer rights laws address things like warranty misrepresentation, defective products, forced arbitration clauses, identity theft, and other types of harassment and fraud.
The Federal Trade Commission (FTC)
In 1914, the U.S. Congress passed legislation creating the FTC, primarily in an effort to combat trusts and anti-competitive business practices. While the agency continues that effort, its role has since been expanded to cover a variety of consumer rights issues. The FTC's Bureau of Consumer Protection is tasked with enforcing federal laws dealing with unfair or deceptive practices throughout the consumer economy. For instance, the bureau has taken an important step to curb telemarketing fraud through the creation of the National Do Not Call Registry. This popular service allows people to bar for-profit organizations from making unsolicited calls to their home telephones.
Consumer Rights Class Action Lawsuits
One problem facing consumer rights victims is the relatively small amount of economic damages they suffer as a result of a company's improper conduct. When a consumer falls victim to fraud by purchasing a product or service that does not measure up to the seller's promises, the consumer may suffer a loss equal to the amount paid, and perhaps some incidental expenses as well. But in all likelihood, the loss to the consumer will represent only a fraction of the amount of money it would take to bring a lawsuit against the seller. Consumers have the option of filing a complaint with federal or state authorities in an attempt to have sanctions brought against a fraudulent company, but this will not help consumers get their money back.
A class action lawsuit tips the balance of power in favor of the consumer. An individual whose rights have been violated can join together with others who have similar claims against the same defendant. Due to the economy of scale that exists with a class action lawsuit, a group of victims can present a serious litigation threat to even the largest corporations. Attorneys who handle these cases work on a contingency basis, meaning they only get paid if and when the victims are compensated. Furthermore, victims with claims that are the basis of a class action suit may decide to "opt-out" and pursue the matter individually when it is in their best interests to do so.
Learn if You Have a Consumer Protection Claim
If you believe a merchant has violated your consumer rights, it makes sense to speak with an attorney like Mildred J. Michalczyk. You may be able to collect financial compensation, and send a message to the offender that abusive business practices will not be tolerated. Schedule an attorney consultation to learn more.