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ADMS 2610 (400)
Lecture

ADMS2610-Session10-Ch28[1].docx


Department
Administrative Studies
Course Code
ADMS 2610
Professor
Robert Levine

Page:
of 4
ADMS2610
Session 10
Chapter 28 (pg. 543-554)
Consumer Protection Legislation
Types of Laws
- Laws relate to the 5 basic areas
o(1) Product Safety
o(2) Product Quality and Performance
o(3) Credit Granting
o(4) Credit Reporting
o(5) Business Practice
- Five Different Approaches
o(1) Disclosure of information
o(2) Consumer rights at law
o(3) Minimum Standards of safety, quality, performance
o(4) Control of sellers and others
Registration or licensing
o(5) Prohibition of unethical business practice
Examples:
- Food and Drugs Act
oControls harmful products that may cause injury or illness
oNo civil right of action
oStrict liability and penalties for breach
- Hazardous Products Act
oProhibits manufacture and sale of products of an extremely dangerous
character
oDeals primarily with packaging (hazard warnings)
- Motor Vehicles Safety Act
oSafety standards for motor vehicles and vehicle parts
oTesting procedures
Consumer Information
- Information
oRelated to both safety and protection
oProtects consumers from deceptive or unfair practices
- Thrust
oDisclosure of information
Product or service
oProhibition of false or misleading information
- Example:
oWeights and Measures Act
Uniform system of weights and measures applied to goods sold in
Canada
oConsumer Packaging and Labeling Act
Prevention of false or misleading labeling and packaging
no civil cause of action for consumers
Consumer Product Quality and Performance Protection
- Protection
oProhibits sellers from exemptions under the sale of goods act
oOvercomes privity of contract issue
- Failure to deliver reasonable performance
oIf proven to be less durable or satisfactory than manufacture’s claims
oNot in all provinces
- Lemon Laws
oFor autos – arbitration process
- Statutory Warranties
oExpress warranties on goods provided by statute
oApply to the actual purchaser only or also to those who subsequently use
or purchase the goods
oAt common law, lack of consideration and privity
Enforced even if no privity or consideration
oResemble sections of the Sale of Goods Acts
oGoes beyond usually type of warranties
Durable for a reasonable period of time
oMust also abide by all other warranties
Through advertising, oral, written
oAct provides for remedies
Consumer Protection Related to Business Practices
- Itinerant Sellers (door-to-door)
oSellers of goods who sell goods at the buyers residence
oHigh pressure/persuasive selling tactics (buyers inability to leave the
premises)
- Cooling-off period
oA time interval after a contract is signed that allows the buyer to repudiate
the contract without liability
- Other
oIf exceeds a certain sum, must be in writing, describe goods, statement of
terms of payment, disclosure
Unfair Business Practice
- Unfair practice
oBusiness practice that mislead or treat the buyer unfairly
- General and specific legislation
oGeneral – concerns all sectors of consumer-related business
E.g. Consumer Protection Act
Lists practices considered to be unfair
oSpecific – e.g. Auto repair legislation (provide estimates)
- Unconscionable Transactions
oTake advantage of vulnerable consumers
Take advantage of physical infirmity, illiteracy, inability to
understand the language, ignorance of the consumer
Price grossly exceeds the value of similar goods on the market
Contracts in which consumer has no reasonable probability of
making payment of the obligation in full
oResults in one-sided agreements in favour of the seller
oSo adverse to consumer as to be inequitable
- Thrust of the law
oEliminate such practice
oPunish
Violators through fines
oRescind
Allows consumer to rescind contract
oDamages
Exemplary or punitive damages at discretion of the court
oInvestigation powers
Of the minister
- Restrict Trade Practices
oBusiness practices of competitors that restrict trade to the detriment of the
consumer
oCompetition Act
- Regulation by License or Registration
oHelps control unfair practices
oSellers of securities, real-estate, business brokers, mortgage brokers,
motor-vehicle dealers
- Collection Agencies
oOften collection methods are questionable
oRegulate market and collection methods
Cannot harass or threaten, cannot collect from someone not liable
for the debt
Credit-Granting Consumer Protection
- Purpose:
oThe debtor knows the true cost of credit
oDone through disclosure rules
Total dollar cost of credit
Chargers, bonuses, extra charges, interest
oUsually not apply to long-term financing
Consumer Reporting Consumer Protection