University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

499

Pages:

2
Author:

bratrochanter

The Federal Trade Commission Act (FTC Act) and related consumer protection laws govern a variety of regulatory frameworks designed to protect consumers from unfair practices in areas like telemarketing, warranties, and credit. Do-Not-Call Registry and First Amendment Considerations: The Do-Not-Call Registry, which primarily targets commercial telemarketing calls, has been challenged on First Amendment grounds, particularly for not applying to political and charitable calls. The registry's regulations aim to protect privacy and reduce fraud in telemarketing by preventing unwanted solicitation. The regulation is subject to the Central Hudson test, which is a three-part evaluation for commercial speech regulations: 1. The government must assert a substantial interest. 2. The regulation must directly advance that interest. 3. The regulation must be narrowly tailored to achieve the desired goal. The privacy and consumer protection interests behind the registry are substantial, and the government has demonstrated a reasonable fit between these interests and the regulatory measures. Notably, the registry is an opt-in system, which is seen as less restrictive and narrowly tailored compared to blanket prohibitions on speech. It directly addresses issues like privacy invasions and telemarketing fraud by providing a way for consumers to block unwanted calls, without infringing on those who wish to receive solicitations. While the registry does not apply to political or charitable calls, the government has justified this underinclusiveness by noting that these types of calls tend to be less problematic than commercial ones. Magnuson-Moss Warranty Act: The Magnuson-Moss Warranty Act (1975) provides consumer protection by regulating written warranties for consumer products. It mandates that warranties be clear, conspicuous, and provide certain information, such as: 1. 2. 3. 4. 5. Who is covered by the warranty. What products or parts are covered. What the warrantor will do in case of a defect. The duration of the warranty and any limitations on implied warranties. Consumer remedies in case of failure to honor the warranty. Warranties must also be made available before the sale, and retailers must inform customers of this availability. Truth in Lending Act (TILA): The Truth in Lending Act (TILA) (1968) primarily aims to increase transparency and consumer understanding of credit terms. It requires creditors to provide clear, uniform disclosures to help consumers compare credit offers and understand their obligations. Key provisions include:   Open-end credit: Requires initial and periodic disclosures about finance charges, billing rights, and security interests. Closed-end credit: Requires disclosures about the total finance charge, annual percentage rate (APR), the amount financed, and payment terms. TILA protects consumers from hidden costs and facilitates informed credit decisions, especially for personal, family, or household purposes. These regulations balance consumer privacy, consumer protection, and credit transparency, helping to create a fairer marketplace and prevent deceptive practices.