+Warm up

In 3-5 words, define each of the following:

1. Phishing

2. Skimming

3. Pyramid scheme

4. Ponzi scheme

Answer the following question:

1. How can you protect yourself from the many types of fraud we learned about last class?

+

5.6 Consumer Protection Objective: Demonstrate how to be a responsible consumer in the 21st century

+I. Consumer Protection & Rights

A. Consumer: someone who buys a product or service

B. Consumer Protection: laws and organizations designed to ensure the rights of a consumer

+C. Rights of the Consumer

You have a right to…

1. Safety: protection from goods/ services that are hazardous to health

2. Be Informed: protection from misleading information, advertising or labeling

+3. Choose: providing a

selection of goods/services at fair prices

4. Be Heard: Provides you the opportunity to be a voice in the creation & development of goods/services

5. Redress: Request money or other benefits as compensation for a company’s mistake

+D. Consumer Credit Protection

Organizations, laws and programs designed to help the consumer: make smart credit decisions and to overcome financial problems

+II. Consumer Protection Agencies A. There are many federal agencies that help

consumers file complaints against businesses, be smarter shoppers and understand credit

B. Better Business Bureau (BBB) – use this agency to learn about a business and how they treat consumers

1. Sets standards for ethical business behaviors 2. Helps consumers identify trustworthy businesses and

those that aren’t 3. Evaluates advertisements to ensure we can trust what

companies say

+ C. Federal Trade commission

(FTC) –designed to protect consumers and promote competition

1. Organizes National Do Not Call List –registering your name to be removed from telemarketers call lists

2. The Fair Credit Reporting Act – provides that you must be given with a copy of you credit report if requested

3. Prevents anti-business practices like monopolies (when a business has complete control of a good/service)

+ D. Securities and Exchange Commission (SEC) –

protects investors who are purchasing stocks, bonds and other financial assets

1. requires companies to provide consumer with reports of how the company is doing

2. Maintains a database EDGAR (Electronic Data Gathering, Analysis and Retrieval system)that allows investors to see the information the SEC collects

+III. How to Protect Yourself

A. Register on Do Not Call List

B. Read the Fine Print of any offer/deal/ad

C. Find Trusted Companies through the BBB and other sources

+D. For more information check out…

1. North American Securities Administrative Association – protects investors in the US, Canada and Mexico

2. FBI Common Fraud Schemes – provides consumers with a list of fraudulent businesses practices

3. Internet Crime Complaint Center – where consumers submit complaints regarding internet scams