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Consumer Protection

Consumer protection in the United States is viewed as a shared responsibility involving federal agencies, local authorities, consumer organizations, the business community, and consumers themselves. Over the years a substantial body of consumer law has been enacted to support basic consumer rights, especially the rights to safety, to choose, to be informed, to be heard, and to redress grievances.

At the national level the chief consumer watchdog is the Federal Trade Commission (FTC). The FTC, founded in 1914, enforces many of the nation's consumer protection and antitrust laws. The FTC prevents unethical and deceptive business practices, protects competitive markets, and otherwise deters criminal activity. The FTC enforces existing laws and regulations in the realms of advertising, lending practices, credit, domestic and international marketing, and other areas of consumer concern. The FTC, along with the Antitrust Division of the U.S. Department of Justice, enforces antitrust legislation such as the Sherman Act (1890), Clayton Act (1914), and Celler-Kevauver Act (1950). These acts prevent anticompetitive mergers and business practices. In recent years the FTC has also intensified its efforts to “deter, detect, and defend” against identity theft.[1]

Other federal agencies, such as the Consumer Production Safety Commission (CPSC) and the Food and Drug Administration (FDA), provide additional safeguards for consumers. The CPSC, founded in 1972, is a federal regulatory agency that protects consumers “against unreasonable risks of injuries associated with consumer products.”[2] The CPSC investigates complaints involving product safety and can order recalls to remove unsafe items from store shelves and showrooms. In 2011 the CPSC recalled 405 different products such as toys, clothing, and household items.[3] The FDA traces is roots to the passage of the Pure Food and Drug Act of 1906, although the agency's current name—Food and Drug Administration—was not formalized until 1930. The FDA is mainly concerned with protecting consumers from unsafe foods, medicines, and medical procedures. In 2012, for example, an FDA mandate required cigarette makers to add to all cigarette packaging significant new warnings about the health hazards of smoking.

Federal consumer law covers a wide variety of protections for U.S. consumers. Some legislation deals with product safety such the Flammable Fabrics Act (1953) and Hazardous Substances Labeling Act (1960). Other legislation protects people from unfair or unethical practices when they buy goods, borrow money, or use credit. For example, the Fair Housing Credit Act (1968) and the Equal Credit Opportunity Act (1974) prohibit discrimination in credit transactions based on race, national origin, gender, age, or marital status. The Truth in Lending Act (1968), the Consumer Leasing Act (1976), the Fair Credit and Charge Card Disclosure Act (1988), and the Truth in Savings Act (1991) ensure that sufficient financial information is made available to savers and borrowers. The more recent Credit Card Accountability, Responsibility, and Disclosure Act (2009) ensures that credit card holders understand the terms and costs of credit, and prevents unfair rate hikes and hidden fees.

In the private sector of the economy, business organizations and professional associations also support consumer interests. Local nonprofit Better Business Bureaus (BBBs) often provide information about area businesses and help reconcile consumer complaints made against local businesses. Similarly, professional associations, which represent people who work in a profession, monitor the quality of goods or services in certain markets. The American Medical Association (AMA) and the American Advertising Federation (AAF) are professional associations.

  • [1] FTC, “Identity Crisis . . . What to Do If Your Identity is Stolen,” FTC Facts for Consumers: Focus on Credit (Washington, DC: FTC, August 2005), 1; FTC
  • [2] U.S. Consumer Product Safety Commission (CPSC), “Frequently Asked Questions,”
  • [3] Consumer Product Safety Commission (CPSC), 2011 Performance and Accountability Report (USCPSC), November 2011, 7
 
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