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UNIT 4 CONSUMER PROTECTION

UNIT 4 CONSUMER PROTECTION. WARRANTY Representation and promises a seller makes to the buyer that become part of the sale. Another name are warranty – guarantee Warranties are an inducement to buy.

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UNIT 4 CONSUMER PROTECTION

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  1. UNIT 4 CONSUMER PROTECTION

  2. WARRANTY Representation and promises a seller makes to the buyer that become part of the sale. Another name are warranty – guarantee Warranties are an inducement to buy. Sellers are willing to stand behind their product and guarantee it is not defective and suitable for the use intended. If something goes wrong, seller will assume cost to fix or replace product.

  3. TWO TYPES OF WARRANTIES 1) Express Warranty 2) Implied Warranty

  4. EXPRESS WARRANTY • Oral or written guarantee by manufacturer or seller (aka guarantee) • Read the fine print. • Get it in writing. 1 YEAR EXPRESS WARRANTY Our products are unconditionally warranted to be free of defects in material and workmanship under normal use. If a product defect is encountered during the warranty period, return it freight paid for a free replacement. This express warranty is in lieu of any other warranty, express, implied or statutory, including without limitation, any warranty of fitness or merchantability. The sole liability of the manufacturer under this warranty is limited to replacing the defective product. This warranty shall not apply to any other product that has been used in conjunction with products made by Nigel B Design, Inc In no event shall Nigel B Design, Inc be liable for special or consequential damages to any buyer, user or other person.

  5. EXPRESS WARRANTIES Statement of promises or fact - made by the seller (facts not opinions) to the buyer IF ORAL WARRANTY--consumers are advised to get oral warranties written down or to have a witness to an oral warranty, in case a dispute about a product arises Puffing – statement of opinion which does not create a warranty. Used to promote and enhance product sale. EXAMPLE: world's best” hamburgers, our facial scrub is like having plastic surgery; our batteries will last forever.

  6. EXPRESS WARRANTY – CAR ADVERTISEMENT • “This vehicle only needs an oil change every 10,000 miles with normal use.” • The manufacturer is making a clear statement about product quality, so how often would you schedule oil changes? • If the consumer waited the full recommended period and there was a problem, he or she could demand action from the manufacturer.

  7. EXPRESS WARRANTY • This toaster is guaranteed to work as advertised for one full year, or we will replace it.” • This type of express warranty ensures that if consumers use a product as directed and it fails, they can demand a replacement. • Express warranties may also include repairs, refunds, or replacement with a refurbished, rather than new, item.

  8. Description of Goods Any description of goods that is part of the transaction creates an express contract. EXAMPLE: CATALOG ORDERS BREACH OF EXPRESS WARRANTY –If what received is not the same as what is pictured or described. E1400 Upright Bike Specs ConsoleHTN LCD with Integrated Reading Rack Programming Five Program Profiles Console FeedbackLevel, RPM, Time, Distance, Heart Rate, Calories, Profile Display Heart Rate Contact Levels of Resistance 8 Drive Train Super silent Poly-V Belt Flywheel 21 lbs. Balanced Seat Molded Foam Seat Post Steel Handlebars Multi-Position Pedals Self-balancing, Easy-Adjust Straps Power Plug-In Product Weight 82 lbs Dimensions 40"L x 26"W x 50"H .Max. User Weight 300 lbs. Home Warranty Lifetime – Frame Lifetime - Magnetic Brake 2 Years - Parts & Electronics 1 Year - Labor

  9. USE OF SAMPLE OR MODEL --Any sample or model that is part of the transaction creates an express warranty. --Breach of express warranty if good is not the same as the sample or model shown.

  10. IMPLIED WARRANTIES • Guarantee imposed by law • and • Warranties a seller can limit • Implied warranties are hard to prove in court • THREE TYPES OF IMPLIED WARRANTIES: • Warranty for fitness for a particular purpose • Warranty of merchantability • Warranty of title

  11. WARRANTY OF MERCHANTABILITY GIVEN BY A MERCHANT---THE PERSON IN THE BUSINESS OF SELLING WHAT IS EXPECTED FROM THE GOOD? MINIMUM PERFORMANCE

  12. WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE Created when the buyer purchases merchandise for a particular purpose and relied upon the seller’s knowledge and advice when selecting the good. If no purpose indicated to seller, seller cannot be held liable for breach of implied warranty.

  13. WARRANTY OF TITLE • When goods are delivered from the seller to you, the seller warrants that the title was conveyed in: • good faith • free from liens and other financial obligations • lawful.

  14. NATIONAL WARRANTY ACT – 1975 MAGNUSON-MOSS WARRANTY ACT This federal act provides additional protection to consumers when written express warranties are made. If a product is valued at $15 or more, a warranty must be presented, if available, for that product. Manufacturers have three choices: 1) Issue no warranty 2) Issue a full warranty 3) Issue a limited warranty

  15. ISSUE NO WARRANTY Not good business WHAT DOES THIS TELL YOU? They do not stand behind their product

  16. Counterpoint Carpet Corp.Full Five Year Warranty What is Covered This warranty covers any defects in materials or workmanship, including installation, with the exceptions stated below. How Long Coverage LastsThis warranty runs for five years from the date your carpet is installed. What is not coveredThis warranty does not cover fading or discoloration caused by exposure to sunlight or chemicals such as ammonia, laundry detergent, or household bleach. (For information on how to prevent fading or discoloration, consult our manual "Care Tips From Counterpoint Carpet," available free from your Counterpoint dealer.) What Counterpoint Will DoCounterpoint will repair any carpet that proves to be defective in materials or workmanship. In the event repair is not possible, Counterpoint will either replace your carpet with new carpet of similar composition and price, or refund the full purchase price of your carpet, whichever you prefer. How To Get ServiceContact any Counterpoint dealer, listed in the Yellow Pages under "Carpet,"or contact Counterpoint at 800-987-6543. A service representative will come to your home and take any necessary action to correct problems covered by this warranty. How State Law AppliesThis warranty gives you specific legal rights, and you may also have other rights which vary from state to state. FULL WARRANTY Best warranty Covers everything for a reasonable length of time Fix or replace free policy If the product cannot be fixed, the owner may choose to receive a new product or get a full refund.

  17. Magnifisound CorporationLimited Warranty What Does This Warranty Cover? This warranty covers any defects or malfunctions in your new Magnifisound hearing aid. How Long Does The Coverage Last? This warranty lasts as long as you own your Magnifisound aid. Coverage terminates if you sell or otherwise transfer the aid. What Will Magnifisound Do? Magnifisound will replace any defective or malfunctioning part at no charge. You must pay any labor charges. What Does This Warranty Not Cover? Batteries, or any problem that is caused by abuse, misuse, or an act of God (such as a flood) are not covered. Also, consequential and incidental damages are not recoverable under this warranty. Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. How Do You Get Service? In order to be eligible for service under this warranty you MUST return the warranty registration card attached below within 30 days of purchasing the aid. If something goes wrong with your aid, send it postage paid with a brief written description of the problem to: Magnifisound Corp.Box 10000Auditory, Ohio We will inspect your aid and contact you within 72 hours to give the results of our inspection and an estimate of the labor charges required to fix the aid. If you authorize repairs, we will return the repaired aid to you COD within 72 hours. You must pay any labor charges upon receipt of the repaired aid. If you inform us that you wish us to provide necessary parts to you but you wish to have repairs performed elsewhere, we will return the aid and replacement parts to you within 72 hours. There is no charge for inspection. LIMITED WARRANTY Most common Restricted protection so READ FINE PRINT so you know what is covered EX: MAY COVER PARTS, NOT LABOR

  18. PRIVITY OF CONTRACT People who contract directly with each other have privity of contract which can include those in family/household. If goods obtained illegally, not covered.

  19. EXCLUSION OF WARRANTIES 1. Consequential Damages 2. “As is” “With all faults” 3. Final sale FINAL SALE – NO RETURNS

  20. CONSEQUENTIAL DAMAGES – Any loss that does not flow directly from an act but only from some of the consequences or result of the act. Results from exclusion of warranty Ex: smoke alarm, food within freezer

  21. AS IS/WITH ALL FAULTS No Warranties SIGN MUST BE POSTED Sign must be in plain view, clearly stated, and be in writing

  22. FINAL SALE MUST BE CLEARLY STATED IN PLAIN VIEW IN WRITING ALL SALES FINAL NO RETURNS NO EXCHANGES

  23. IMPLIED WARRANTY OF FITNESS FOR HUMAN CONSUMPTION 1. If you know you have an allergy to certain products and consume those produce anyway, you cannot claim breach of implied warranty of fitness for human consumption. 2. If you know you have an allergy to certain products and specify you CANNOT have certain products and given assurances, you consume them and have a reaction, you have a claim. TWO TESTS: FOREIGN/NATURAL TEST REASONABLY EXPECTED TEST

  24. FOREIGN/NATURAL TEST “Bones which are natural to the type of meat/fish served cannot be legitimately called a foreign substance Are these a breach of implied warranty of fitness for human consumption? Nail in mashed potatoes? Ant in lettuce? Stone in lettuce? If guaranteed to be boneless—negligence?

  25. REASONABLY EXPECTED TEST “What is reasonably expected by the consumer as served NOT What might not be natural to the ingredients of that prior to preparation”

  26. IN SUMMARY OF THESE TWO TESTS FOR IMPLIED WARRANTY OF FITNESS FOR HUMAN CONSUMPTION: Whatever in the food caused you to get ill—Was it natural to the product? Whatever in the food caused you to get ill—Was it reasonably expected?

  27. OHIO CONSUMER SALES PRACTICES ACT & SUBSTANTIVE RULES 1. Prohibits unfair, deceptive, & unconscionable sales practices 2. Sets rules

  28. RULES UNDER THE OHIO ACT • Mail Order Sales • Rain Checks • Repairs and Services • Bait Advertising • New for Used • Posting of Store Policies • Prizes

  29. MAIL ORDER SALES After 30 days, if your order has not been shipped, you can notify the Federal Trade Commission. After 8 weeks, if you ordered something and sent the money, you can bring a lawsuit. If bought through the mail, eight weeks is the key time.

  30. RAIN CHECKS Must be honored within 60 days of issuance. EXCEPTIONS TO RAIN CHECKS: 1) Seasonal items 2) Limited quantity of items

  31. REPAIRS AND SERVICES • 1) Right to estimate if over $25 • CHOICES BY CONSUMER: • a) No estimate • b) Oral estimate • c) Written Estimate • 2) If between $25 - $50 estimate, written or oral, bill cannot be more than $5 over estimate. • If over $50 estimate, bill cannot be more than 10% higher than estimate.

  32. PENALTY 3 TIMES AMOUNT OVER ESTIMATE OR $200—WHICHEVER IS MORE PLUS REASONABLE ATTORNEY FEES (APPROXIMATELY $250/hr.)

  33. “Bait and Switch” Advertising The store advertises bargain prices that do not really exist to lure customers into store. Once in the the customer is escorted to higher priced items, never seeing the advertised low-priced product. KEY TO PROVING BAIT AND SWITCH: YOU NEVER GOT TO SEE THE ORIGINAL ITEM YOU CAME IN FOR.

  34. NEW FOR USED PERSON THINKING THEY ARE GETTING SOMETHING NEW AND THEY ARE NOT. EX: RENOVATED HOUSE DOES NOT CONSTITUTE NEW HOUSE.

  35. STORE POLICIES MUST BE CONSPICUOUSLY POSTED AND KEPT BY FRONT REGISTERS. Return polices should never be in the back of the store.

  36. PRIZES If giving prizes, must provide: 1) value of prizes 2) chance of winning

  37. USE OF WORD ‘FREE’ Be cautious There is no such thing as “free”

  38. OHIO LEMON LAW Applies to: new trucks new cars leased cars Within the first 12 months or 18,000 miles whichever comes first.

  39. WHAT CONSTITUTES A LEMON? • Did you make three or more attempts to repair one problem that will not go away? • It has been in a repair shop a total of 30 days— • does not have to be 30 consecutive days. • Eight or more attempts to fix a number of different problems that impair the use, value, or safety of the car. • One unsuccessful attempt to fix a problem that could cause death or serious injury.

  40. ARBITRATION MEDIATION Dissatisfied customer has 18 months to request arbitration or mediation. Arbitration will try to encourage both sides to agree to a mutual decision. Mediators hear the complaint and issue a decision which can be contested in court If the mediator finds the complaint valid, they will have to go ahead and fix it. If no results, you can bring a lawsuit for the full purchase price. Lawsuits for full purchase price--refund or new vehicle. Legal fees -- expensive ($5,000+.)

  41. ODOMETER ROLLBACK AND DISCLOSURE ACT Penalty is three times the amount of damages or $1500, whichever is more plus reasonable attorney fees.

  42. ODOMETER TAMPERING IS FRAUD AND IS A FELONY. • Annual consumer loss $4 to $10 billion • OHIO LAW: • A first offense is a fourth-degree felony, which carries a penalty of 6 to 18 months in jail and up to a $5,000 fine. • A second offense is a third-degree felony, which carries a penalty of one to five years in jail and up to a $10,000 fine

  43. PREPAID ENTERAINMENT CONTRACTS • DANCE STUDIO B. DATING SERVICES • C. MARTIAL ARTS D. HEALTH SPA • No lifetime contracts allowed – 3 years max. • 25-mile rule applies: • If you move less than 25 miles from the facility, they don’t have to refund unused money. • If facility is moved, as long as not 25 miles from original location, they don’t have to refund unused money.

  44. ANTI-PYRAMID SALES LAW • Prohibits schemes which require consumers to pay a fee merely to obtain the right to recruit investor • 1) Chain letters • Sales Pyramids • example: Amway (look up Amway and be ready to tell me what it is and why it is a pyramid sales program that is not illegal

  45. READY T0 BE SCAMMED??

  46. HOW MUCH DO YOU HAVE TO SEND? WHAT IS THE ADDRESS?

  47. BUSINESS OPPORTUNITY PURCHASES PROTECTION ACT Regulates the sales of business opportunity plans and provides required disclosure and cooling off periods to consumers before they sign contracts.

  48. HOME SALES • SOLICITATIONS ACT • 1) THREE DAY COOLING OFF PERIOD • 3 days to renege on an agreement but it MUST BE IN WRITING. • 2) APPLIES TO GOODS AND SERVICES • $25 OR MORE • If under $25, no help available. • If over $25, help available. • WRITING REQUIRED If must be in writing • to get out of it. Cannot be oral. • 4) PENALTY Minor misdemeanor $100 fine.

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