Consumer and Environmental Law

1
Chapter 32

• Consumer and Environmental Law

2
General Concepts of Consumer Protection

• Caveat emptor has been replaced with
  considerable consumer protections
• Consumers are more sophisticated, but
• Products greatly more complex
• Less sophisticated individuals can afford complex
  consumer goods
• First regulation Food and drugs

3
Unfair and Deceptive Practices

• False Deceptive Advertising
• if likely to mislead a reasonable consumer
• Actual deception need not be proven
• Colgate Palmolive case shaving sandpaper
• Photos on frozen food (serving suggestion)
• Deceptive ads include some factually true

4
Other advertising issues

• Bait and Switch
• Must have reasonable quantities be willing to
  show the advertised item
• Internet issues
• Same rules, but some guidance re online
• Disclaimers must be conspicuous

5
Sales Regulation

• Door-to-Door sales
• Cooling off period to rescind w/in a few days
• Phone/Mail order
• Notification / refund requirements
• Unsolicited merchandise

6
Food and Drug Regulation

• FDCA enacted in 1938, replaced earlier statutes
  dating back to 1906
• Why no federal regulation before 1906?
• Approval required for additives, drugs, and
  medicinal devicesnot for food
• Accuracy in labeling

7
Consumer Product Safety Act

• Enacted in 1972
• Consumer Product Safety Commission
• Adopt rules and regulations
• Research safety of consumer products
• Collect injury data
• Can order recalls, seek injunctions, seize
  dangerous products, seek civil and criminal
  penalties

8
Consumer debtor protection

• Broad Protections
• Many abusive practices
• Many consumers dont understand credit
• Desperate consumers often agree to anything
• Full disclosure/no abusive practices

9
Truth in Lending

• Full Disclosure
• Consumer transactions up to 25k
• Limit poorly explained in the text
• No limit if principal residence is collateral
• Home equity loans included

10
Regulation Z

• Specific Disclosures
• Price, down payment, amount and timing of
  payments, finance charge, etc.
• APR
• True interest rate
• Calculated by proper method
• Includes fees in addition to interest

11
Equal Credit Opportunity

• Cant ask about race, national origin, age, child
  bearing status or plans, marital status
• Must give reasons why turned down

12
Fair Credit and Charge Card Disclosure Act

• Reg. Z disclosures adapted to credit cards
• Unsolicited credit cards
• Faulty products
• Try to resolve with merchant
• If cant, then can withhold payments
• Applies only to merchants in-state or within 100
  miles

13
Lost or stolen card liability

• Credit cards
• Liable for only the first 50
• Liable for nothing once notified
• Debit cardshigher riskWhy?
• Higher limits, stricter notice reqs.
• W/in 2 days 50
• W/in 60 days 500
• Otherwise, unlimited

14
Fair Credit Reporting Act

• Applies to Credit Bureaus
• 3 Big ones, records notoriously error-filled.
  (Equifax, Experian, Transunion)
• Mandatory error correction process
• Ability to file 100 word statement if continue to
  disagree
• You should check once a year

15
Checking Credit Reports

• All are entitled to one a year from each of the
  big three credit reporting agencies
• Accessible online
• www.annualcreditreport.com
• Absolute best approach is to get one every 4
  months, rotating which agency to get it from.

16
Purpose of obtaining credit report

• Credit report can be obtained only for proper
  purposes
• Now, for employment, only if applicant
  specifically allows

17
Identity theft

• Problem is rapidly increasing
• Difficult to prosecute
• Federal statute provides some protections
• If happens, call all to put fraud alert. Change
  all accounts
• Optional credit bureau services
• Credit freeze in Colo. Beg. 7/1/06

18
Identity theft

• Cannot be prevented
• Risk can be reduced
• Act so as to catch it early and respond quickly
• Always, always, always think about giving out any
  information on yourself

19
Credit Scoring

• Being used more widely
• Condenses all credit information to a single
  score
• Controversial
• Mysterious
• Illogical
• How is erroneous information handled?

20
Credit scoring (Cont.)

• Used for more than credit
• Insurance, employment
• Model might be biased
• More than one model used
• Too much is unknown.
• Only recently have people been able to get scores
  directly

21
Credit Scoring (Cont.)

• Takes multi-dimensional analysis and makes it
  uni-dimensional
• Takes much individual judgment out of the
  decision. Good or bad?
• Allows instant credit

22
Credit Scoring Factors

• Bill paying history-35
• Amount owed-30
• Length of credit history-15
• New Credit (actual and inquiries)-10
• Types of credit in use-10
• Credit cards mortgages installment, etc.

23
Fair Debt Collection Practices Act

• Applies to third party collectors
• Can call only 800 a.m.-900 p.m.
• Not at work if employer objects
• Must stop if you send a letter that you wont pay

24
Environmental Law

• Recent, most since 1970
• Scientific uncertainty
• E.g. cause of global warming?
• Federal statutes
• Environmental Impact Statements
• Must consider, but does not dictate
• Public comment period
• Alternatives adverse effects

25
Air Pollution

• Clean Air Act. 1970 updates
• Mobile v. Stationary sources
• Ambient Air Quality Standards
• Programs to reduce if dont meet
• Emissions inspections
• No burn days

26
Mobile Sources

• Cars and Trucks
• No control on location of the source
• Gram per mile replaced parts per million
• Trucks now same as cars
• Gradually tightened
• California stricter

27
Stationary Sources

• Permitting process
• New and old sources
• Whether in clean air or dirty air location
• Technology requirements
• Credit trading for Sulfur Dioxide
• (From coal burning power plants)

28
Water Pollution

• Navigable waters
• Permits in order to discharge
• Wetlands
• Drinking water

29
Hazardous Waste

• Currently-generated waste-RCRA
• Cradle to grave tracking
• Often accidentally violated
• Existing Waste Sites CERCLA
• Often called Superfund
• Provides for cleanup
• Extensive liability for businesses