Chapter 3

Consumer Protection

Know Your Consumer Rights

Consumer Rights and Responsibilities 3.1

1962, John F. Kennedy Consumer Right = Consumer Responsibility

Right to Safety = Right to be Informed = Right to Choose = Right to Be Heard = Right to Redress = Right to Consumer =

Education Right to a Healthy =

Environment

Use Products Safely Use Information Choose Carefully Express Satisfaction/

Dissatisfaction Seek Redress Be an Educated Consumer

Contribute to a Healthy Environment

Consumerism

Government and Consumer Protection 3.2

Governmental Organizations

These organizations were set up by the government to protect consumers

FTC CPSC EPA USDA NHTSA BBB (not a govt. agency) State Attorney General US Post Office

Warranties

Companies promise that the product will meet specific standards, or they will repair, replace, or refund

(Magnuson-Moss Warranty Act)

Full Warranty Limited Warranty Implied Warranty

Math Activity 3 – Saving Energy & Money

Formulas to determine if saving energy is saving you money.

Simple Payback – the number of years it takes for the annual savings in energy cost to equal the additional purchase cost of the energy-efficient model. Simple Payback =

Additional purchase price / annual savings in energy cost Ex: The energy-efficient item costs $50 more than the

non energy-efficient item but will save you $26 in energy costs a year, so the simple payback is:

$50 / $26 = 1.9 years That means it will take you about 2 years of savings to

pay off the difference but every year you use the item after that is a savings of $26.

Formulas to determine if saving energy is saving you money.

Net Savings – The amount you save during the entire life of the product, minus the additional purchase cost

Net Savings = Annual energy cost saving X expected life of the product – additional purchase price

EX: You will save $26 a year for the 11 years you expect to use the item, but it cost an additional $50 for that item

$26 X 11years - $50 = $236 net savings Over the life of the item you will save a total of $236 for

spending $50 now.

Formulas to determine if saving energy is saving you money.

Rate of Return – The percentage of savings in energy cost.

Rate of Return = annual energy cost savings / additional purchase cost

EX: You will save $26 a year but had to spend $50 to do that. What is your rate of return?

$26 / $50 = 0.52 or 52%

Math Activity 4 – Entrepreneurship and Profit

How to find Profit Revenue – The money collected from customers by a

business Expenses – The money businesses spend to stay in

business (materials, payroll, taxes, rent, etc.) Net Profit – The difference between what a business

collected and what the business spent.Net Profit = Revenue - Expenses

Ex: A business collected a total of $8,000 for the month is sales and after adding up all of its expenses came up with a total of $5500, its net profit would be:

$8,000 - $5,500 = $2,500 for the month If the business made that same profit for the quarter, they

would have made:$2,500 X 3months = $7,500

Reading a Table

Month Income Expenses Profit

January $345,876 $222,987

February $275,900 $150,009

March $399,325 $290,900

April $419,976 $270,356

May $334,654 $190,703

Figuring and Comparing Profit

Computing Quantities

We know there are 12 months in a year and 365 days in a year.

How many months in 15 years? 15 years X 12 months = 180 months

How many days in 15 years? 15 years X 365 days = 5,475 days

How many years in 3,500 days? 3,500 days / 365 days per year = 9.6 years

How many months in 3,500 days? 9.6 years X 12 months per year = 115.2 months

Going Out of Business Sale or Scam?

Deception and Fraud 3.3

Legal but Deceptive Trading Up Sale Price Suggested Retail Price Loss Leader

Illegal and Fraudulent Bait and Switch Pyramid Schemes Telephone Fraud

Protect yourself from deception and fraud by being an alert consumer.

How to Complain

Resolve Consumer Problems 3.4

Resolve the Problem The Complaint Process Government Involvement to Help Consumers