The second half of September marks the anniversary of the founding of the Federal Trade Commission, a key buttress of Consumer rights. On September 26, 1914, President Woodrow Wilson created the FTC by signing the Federal Trade Commission Act. The FTC replaced an agency known as the Bureau of Corporations, which had been created in 1903. It began operations in March 1915. However, its current headquarters at 600 Pennsylvania Avenue in Washington, D.C. dates from the Great Depression era of the 1930s.

The FTC aims to bolster economic competition and protect consumers. In addition to educating the public and helping develop policies, the agency can bring legal actions against people or businesses that have allegedly violated Consumer Protection laws. For example, the FTC has taken action against false advertising, identity theft, scams, and violations of consumer privacy, among other forms of misconduct.

The Consumer Protection Law Center at Justia provides more details about how the FTC helps protect consumers from deceptive and unfair business practices. It also points out that the FTC may not necessarily bring an enforcement action in every situation that might warrant it, due to limitations on its resources. If this happens, a consumer might be able to pursue a claim in court. The Consumer Protection Law Center offers information about these topics and others related to consumer rights.

Enforcing Consumer Rights

A consumer who reports an improper business practice to the FTC or a similar agency should not assume that they have no recourse if the agency does not act. They can bring a civil lawsuit against whoever was responsible for the improper practice, seeking the damages that they sustained as a result. When the damages are relatively limited, a consumer might consider pursuing action in small claims court. This can be a cheaper and more efficient way to resolve a claim, and proceedings in small claims court tend to be easier for ordinary people to navigate. However, they cannot recover damages greater than the small claims court limit.

Another option involves joining other consumers in a class action. This allows a large number of consumers who have suffered the same type of harm caused by the same defendant to pursue their claims as a group. Class actions must meet certain requirements under federal or state procedural rules. If the proposed class meets the applicable requirements, this may be a good way for consumers to assert their rights when the value of each person’s claim does not warrant bringing an individual lawsuit.

In some cases, a consumer might resort to alternative dispute resolution, rather than litigation. The two main types of ADR are arbitration and mediation. In arbitration, a decision-maker called an arbitrator resolves the dispute. In mediation, a neutral third party called a mediator tries to help the parties reach a mutually acceptable solution, rather than imposing a certain outcome on them. Either arbitration or mediation may be faster and less expensive than litigation.

Types of Deceptive or Abusive Practices

Deceptive practices and fraud may take many forms, but the Consumer Protection Law Center highlights some notable problems. For example, it describes how false advertising may involve misleading descriptions of products, as well as hidden fees or other deceptive pricing tactics. False advertising may take more subtle forms as well, such as deceptive comparisons of a product to a competing product.

False advertising may take more subtle forms as well, such as deceptive comparisons of a product to a competing product.

Many Americans have grown frustrated with telemarketers besieging their phone lines. The Telephone Consumer Protection Act places certain restrictions on these activities, while the FTC has worked with the Federal Communications Commission (FCC) on creating a National Do-Not-Call Registry. Meanwhile, the CAN-SPAM Act of 2003 aims to control the deluge of spam emails in consumer inboxes.

Some protections for consumers focus on certain industries, such as the auto industry. Lemon laws assist consumers who purchase defective vehicles, while the federal Used Car Rule aims to curb auto dealer fraud by requiring businesses that sell used cars to provide certain information to buyers. In another example, some states have enacted laws that specifically protect homeowners from misconduct by home construction and remodeling businesses.

Identity Theft

One of the most harmful abuses affecting consumers does not usually involve intentional misconduct by a business. Identity theft occurs when someone takes a consumer’s personal information without their consent, usually for the profit of the thief. A consumer should stay alert to signs of identity theft and know how to respond if they find out that identity theft has affected them. Among other things, they may want to freeze any potentially affected accounts, close fraudulently opened accounts, report the incident to the FTC or the police, ask credit bureaus to implement fraud alerts, and replace government-issued IDs if needed.

Some incidents of identity theft arise from data breaches at companies that collect the personal information of consumers. In addition to claims against the criminal who committed the theft, consumers may have claims against a company that allowed the theft to happen due to its inadequate security practices. Over the last several years, some states have enacted data privacy laws that govern how businesses collect, store, and use the personal information of consumers. The federal government has not yet enacted a comprehensive data privacy law, although various federal laws protect certain types of people or information.

Final Thoughts

Government agencies like the FTC play a vital role in shielding consumers from improper business practices. However, many federal and state laws allow Americans to stand up for themselves as well. If a consumer suspects that their rights have been violated, they may want to consult a consumer law attorney about the options available in their specific situation. In the meantime, the Consumer Protection Law Center at Justia provides some basic information on the applicable laws and common issues that may arise. Like the other Justia Legal Guides, it aims to make the law transparent and accessible to all.