Anyone who purchases goods, pays for services, rents a home or other type of property, makes purchases on credit, keeps money in a bank, or engages in any of the nearly infinite other types of commercial activity in our society is a “consumer.” A vast body of consumer law has developed at the state and federal levels to protect consumers from fraud and other deceptive practices. Many types of consumer fraud result in consumers losing money, such as in an investment fraud scheme. The effects of consumer fraud can be much more severe, however. Fraudulent conduct by a landlord or construction contractor, for example, could leave a person homeless, and fraudulent health care practices can threaten people’s lives.
What is a Consumer?
The definitions of a “consumer” under state and federal law generally have several key elements in common. A consumer is an individual (meaning someone who is not a business or other organization) who purchases or leases goods and services for personal or household use. Many laws draw a distinction between transactions intended for personal or household use and those intended for business use. Consumer law protects personal and household purchases, leases, and other transactions.
Consumers may also assert their rights through common-law claims. In a situation where improper debt collection practices result in false information on a consumer’s credit report, for example, the individual might be able to assert a defamation claim. Breach of contract law may apply to situations in which a contractor failed to perform its services adequately.
Who Enforces Consumer Protection Laws?
State attorneys general typically enforce state consumer protection laws, often through divisions established to focus exclusively on consumer issues. Individual consumers can enforce some consumer statutes on behalf of the state through “private attorneys general statutes.” Once a plaintiff files suit under one of these statutes, the state must decide whether to take over prosecution of the lawsuit. If it declines to do so, the individual plaintiff may continue to pursue the case. Either way, the plaintiff is entitled to a percentage of damages and recovery of attorney’s fees from an unsuccessful defendant.
If no private attorney general statute applies to a claim, the consumer must bear all costs personally, although some state consumer protection statutes allow plaintiffs to recover attorney’s fees, court costs, and additional damages if they can prove a defendant acted willfully or with malice.
At the federal level, numerous agencies investigate violations of consumer statutes, and they occasionally file civil lawsuits to enforce these statutes. The Federal Trade Commission (FTC), the Department of Justice, and the Consumer Product Safety Commission are three of the biggest and most prominent agencies charged with enforcing federal consumer law. The FTC handles many well-known programs, such as the “Do Not Call List” targeting telemarketers.
How Can Consumers Enforce Their Rights?
Many state and federal agencies allow consumers to report violations of consumer protection statutes. If the relevant agency does not take action, the consumer may be able to file a lawsuit to recover any damages.
Class action litigation enables large numbers of consumers with similar claims against one or more common defendants to join their cases into a single lawsuit. This is particularly beneficial when individual consumers might not be able to afford to litigate the claims on their own.
Small claims courts are available to consumers whose claims do not have a large amount of damages, and who want to assert their rights in a less formal setting than the general court system.
Private organizations also offer methods of asserting and resolving consumer disputes. The Better Business Bureau (BBB), for example, offers neutral arbitration and mediation of disputes. Businesses may be required to agree to be bound by the results of these processes in order to maintain membership, meaning that a consumer who prevails in a BBB arbitration can automatically enforce the ruling in court.
How do I contest a fraudulent credit card charge? You must send written notice to the credit card company within 60 days of your statement date if you see a fraudulent charge. After receiving your complaint, the company has 90 days to act on your claim.
Unwanted Telemarketing Under federal law, when a consumer becomes part of the National Do-Not-Call Registry, telemarketers have 31 days to stop calling. Though registration used to last for five years, it is now permanent.
Enforcing Your Rights as a Consumer If you feel you have been treated unfairly by a business, you can report them to a government agency, or possibly take legal action in small claims court or as part of a class action if others have similar claims.
Dangerous or Defective Products and Recalls If you or a loved one has been harmed by a defective product, you can potentially sue the manufacturer or others in the chain of commerce for a design, manufacturing, or marketing defect under state law.
Credit Card Fraud Federal law provides protections to victims of credit or debit card fraud. Provided that consumers report any unauthorized card usage promptly, banks and credit card companies must limit consumer liability.
Recognizing Signs of Identity Theft There are many ways in which consumer financial information can be compromised. If you stop receiving certain bills or notice unauthorized charges on your credit card, someone may be using your identity.