Practice Consumer Law

Small Claims Court

time? We offer quick loans to anyone regardless of credit background; No interest payments. Just a nominal processing fee. CALL TODAY!!

The offer sounded too good to be true. But although the Johnsons were skeptical, they called. The operator saidshe would be happy to offer them a no–interest loan of $2,000 repayable in six easy monthly installments. All the Johnsons had to do was to pay a one–time $200 fee that the company would use to process the paperwork.

The Johnsons did not have to meet anybody from the loan company, and nobody bothered them at their home. They scraped together the $200 and sent Easy Money, Inc., a money order.

When they had not received their money in three weeks, they began to worry. They again called the number listed in the paper, but the line had been disconnected. Finally, after, two additional weeks, they realized they were not going to get their loan and would never see the “processing fee” again.

Problem–solving:

a.Did any unfair or deceptive practices take place in the John– sons’ story? Explain.

b.What could the Johnsons have done to prevent their loss?

c.What can they do now? Can any state or federal agencies help them?

d.How can merchants and consumers use small claims court?

Match the words on the left with the correct definition on the right:

Community	payment.
Filing	question to be decided in a law court.
Complicated	deal with.
Clerk	application.
Minor	statement of claim.
Handle	district.
Fee	trial of a case at law.
Complaint	anything that proves sth.
Case	less important.
Incur	person who gives evidence in a law court.

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Practice in Consumer Law

Evidence	difficult.
Postponement	a person employed to keep records and ac-
	counts, copy letters etc.
Hearing	ordered to appear in court.
Subpoenaed	public officer with authority to hear and decide
	cases in a law court.
Witness	bring upon oneself.
Judge	continuance.

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Door–to–Door and Telephone Sales

UNIT 10.

Door-to-Door and Telephone Sales

Read and translate the text.

Most door–to–door salespeople are honest. They offer products and services consumers may need and want. Some, however, use high–pressure tactics and smooth talk to get you to buy things that you otherwise wouldn’t buy. Once in the door, this type of salesperson won’t take no for an answer and will do almost anything to make the sale.

Some state laws and a Federal Trade Commission rule give consumers a “cooling–off” period of three business days after they have signed a contract for over $25 with a door–to–door salesperson. During this period, consumers can notify door–to–door sellers in writing that they wish to cancel the contract. The FTC rule also requires door–to–door salespeople to tell their customers about the right to cancel and to put this notice in writing. If the seller does not do this, the consumer may be able to cancel the contract by sending a letter or telegram to the seller.

Consumers should be cautious regarding sales offers made by telephone. Many fraudulent schemes are conducted this way. The cooling–off period of three days does not yet apply to telephone sales. Be particularly careful if a telephone salesperson asks for your credit card number. This person may not only fail to send what you order but may also make additional purchases using your credit card number!

Telemarketing Scams

According to the United States House Committee on Government Operations, consumers lose between $3 billion and $15 billion annually due to telemarketing fraud. The National Consumers League identifies the following top ten telemarketing scams:

1.Postcard guaranteed prize offers.

2.Advance fee loan scams.

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Practice in Consumer Law

3.Fraudulent 900 number promotions.

4.Precious metal investment schemes.

5.Toll call fraud.

6.“Free” airfare vacation offers.

7.Direct debit from checking accounts.

8.Phony Yellow Pages invoices.

9.Phone credit card promotions.

10.Collector’s items.

Phony Contests and Referral Sales

A seller may convince consumers that they can save money by referring the seller to other customers. The consumer then enters into a sales contract assuming that the price will be reduced if he or she gives a list of other potential purchasers of the product to the seller. However, the agreement usually provides savings to the consumer only if the potential customers actually buy the product. This selling technique is called a referral sale. Unless deceptive, referral sales are generally legal.

Find the equivalents of the following words and expressions in the text.

Агенты по продаже на дому, тактика давления и угово- ров, период обдумывания, право на расторжение контракта, мошенническая схема, продажа товара по телефону, между- городный телефонный разговор, убедить покупателя, жуль- ническое соревнование.

Answer the questions:

1.What are high–pressure tactics and smooth talk? Give your examples.

2.What is a “cooling–off” period? How long is it? Do we have it in this country?

3.Why should consumers be cautious regarding sales offers made by telephone?

4.How much do consumers lose annually due to telemarketing fraud according to the United States House Committee on Government Operations?

5.Comment on the top ten telemarketing scams. Have you heard of any of them?

6.What are referral sales? Are they legal?

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Door–to–Door and Telephone Sales

Read the story, finish it and retell:

Three months ago Mr Brown received a visit from a salesman representing Home Electrics Ltd, who persuaded him to buy an electric hair drier for $60. He told Mr Brown that if he sent a $15 deposit, they would send him the hair drier on a two–week home trial. If, after that time, he didn’t want to keep the drier, he should send it back and his deposit would be refunded. The salesman assured Mr Brown that he was under no obligation to buy the drier if he didn’t like it.

Mr Brown sent his deposit and received the drier a few days later. But when he tried it out he found it didn’t work, and the same afternoon his wife saw exactly the same drier in a local shop for only $50.

So he sent the drier back to Home Electrics with a letter. In the letter he explained that he didn’t want the drier because it didn’t work and pointed out that the same drier could be bought locally for $10 less.

Instead of getting his deposit back, as he expected, Mr Brown got a letter from Home Electrics in which they claimed that he had broken the hair drier by using it wrongly, and that he still owed them $45.

So Mr Brown wrote back to them. He strongly denied that he had broken the drier, and asked them again to return his $15.

A few days later he got a letter from the Managing Director, who insisted that the drier had reached Mr Brown in perfect condition, and warned him that if he did not pay the balance within seven days, the company would have to take legal action.

Match the words on the left with the correct definition on the right:

Consumer	phony.
Cautious	binding agreement.
Fraudulent	obliterate.
Scam	make less.
Debit	careful.
Referral sale	entry (in an account) of a sum owing.
Honest	fraud.
Cancel	deceptive selling technique.
Contract	not cheating.
Reduce	person who uses goods.

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Practice in Consumer Law

UNIT 11.

Advertising and the Consumer

Read and translate the text.

Advertising is everywhere. Each day, American consumers are bombarded by ads on radio and television, in newspapers and magazines, on billboards and bus shelters, even on blimps in the air and benches in the park.

The United States has always been a commercial society; but in recent years, advertising has become more widespread. In 1992, over $130 billion was spent on advertising in the mass media, and this doesn’t include non–mass–media advertising like direct mail ads. Advertising has also become more persistent and intrusive. As a result, people sometimes try to avoid advertising by flipping the channel during TV commercials or tossing unopened junk mail into the trash can.

The First Amendment to the U.S. Constitution protects advertising as an expression of free speech. However, courts have ruled that government may regulate and even prohibit certain types of advertising. One of the most controversial types of advertising involves tobacco. Tobacco advertising is controversial because smoking is the nation’s leading preventable cause of death. More people die from smoking each year than from AIDS, accidents, fires, homicides, suicides, and drunk driving combined. As a result, there have been efforts to eliminate or restrict tobacco advertising. In 1972, tobacco advertising was prohibited on radio and television, but it is still allowed in magazines, in newspapers, and on billboards and other forms of outdoor advertising. Tobacco ads on billboards are particularly controversial. Unlike newspapers and magazines, which can be ignored or thrown away, billboards make the American public a “captive audience” to huge, intrusive ads that can’t be avoided. What’s more, numerous studies have

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Advertising and the Consumer

shown that more billboards are located in neighborhoods where poor people live than elsewhere.

Advertising can, of course, be beneficial. For example, merchants use advertising to tell potential customers about their products. Ads can also help consumers by telling them about new goods and services and by providing other useful information. Although ads can be helpful, they can also mislead, deceive, and confuse.

Ads sometimes mislead consumers through vague claims or, in a few cases, outright lies. Other times, ads try to create a desire for products that consumers don’t really need or want. Many ads appeal to emotion rather than provide the kind of factual information needed to make a wise buying decision.

The federal and state governments have laws that prohibit false or deceptive advertising. However, these laws are difficult to enforce, and deception can take many forms.

When the public is widely exposed to a misleading ad, the FTC can order the seller to stop the false advertising. It can also order corrective advertising. This means that the advertiser must admit the deception in all future ads for a specified period of time. For example, a well–known mouthwash company advertised that its product cured sore throats and colds. When an investigation proved this claim false, the FTC ordered that all new ads state that the previous claims were untrue.

Although, as a general rule, false or misleading ads are illegal, one type of ad is an exception to this rule. Ads based on the seller’s opinion, personal taste, or obvious exaggeration are called puffing. While perhaps not literally true, ads that puff are not illegal. For example, a used car dealer that advertises the “World’s Best Used Cars” is engaged in puffing. A reasonable person should know better than to rely on the truthfulness of such a statement. Similarly, announcing a sale at a furniture store, an ad reads: “2,750 items of furniture have to disappear tonight’.” This ad is not literally true; but again, a reasonable consumer should understand that it is just “seller’s talk.”

In contrast, consider an ad that reads: “Giant Sale–Top– Quality CD Players, formerly $300, now just $225.” If the compact

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Practice in Consumer Law

disc players were never sold at $300 and could have been purchased anytime for $225, this ad is illegal. It misleads consumers about an important fact concerning the product. The ad is not puffing, because it is not based on the seller’s opinion, personal taste, or obvious exaggeration.

The difference between illegal advertising and puffing may be small, so consumers should be on guard. If an ad tends to mislead about an important fact concerning the product, it is illegal; but if the ad is merely an exaggeration or a nonspecific opinion, it is probably puffing and legal.

Find the equivalents of the following words and expressions in the text.

Широко распространенный, средства массовой инфор- мации, настойчивая и навязчивая реклама, телевизионные рекламные ролики, свобода слова, сомнительная реклама, причина смерти, рекламный щит, сбивать с толку, откровен- ная ложь, взывать к чувствам, корректирующая реклама, при- знать обман, очевидное преувеличение, торговец подержан- ными автомобилями, быть начеку.

Answer the questions:

1.Why has advertising become more widespread in recent years?

2.What is non–mass–media advertising?

3.Do you sometimes try to avoid advertising? How?

4.Do you agree that “advertising is an expression of free speech”? Why? Why not?

5.How is tobacco advertising controversial? Is it legal in Russia? Are there any restrictions?

6.Give examples of beneficial advertising.

7.How can ads mislead consumers?

8.Do we have any laws that prohibit false or deceptive advertising in Russia?

9.What is the difference between illegal advertising and puffing? Give your examples.

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Advertising and the Consumer

Read the text and answer the questions:

The Guaranteed Jeep

Janine Gomez received a mailgram addressed to her with the word URGENT in bold letters across the front. She opened the envelope and read the letter. It told her she was a guaranteed prizewinner. The two prizes listed in large, bold letters were a brand new jeep and a big–screen color television. In much smaller print, the letter said that there were other valuable prizes that she could win instead. No matter what, she was preselected as a certain winner.

All she had to do to claim her prize was call a direct number: 1–900–NEW–JEEP. In even smaller print, the letter informed her that the call would cost $5 for the first minute and $3 for each additional minute and that it would take from three to five minutes to adequately discuss her prize. Although this was an expensive call, Janine decided that the prize she would get would be worth the cost of the call.

1.Assume that the prize Janine is offered is a kitchen appliance available in grocery stores for less than $2. What should she do?

2.What mistake, if any, did she make in deciding to respond to the mailgram?

3.Have you or has anyone in your family ever received notice of a guaranteed prize in the mail? How did you respond?

4.What, if anything, was deceptive about the mailgram?

5.In what way, if any, should the law regulate situations such as the one encountered by Janine?

Problem–solving:

To determine the impact of one form of advertising on you and your community, conduct a survey of outdoor advertising in your neighborhood and around your school. Next time you travel from home to school, note the following:

1.How many billboards do you see? If you don’t see any, do you see any other forms of outdoor advertising? Explain.

2.How many advertisements do you see for alcoholic beverages and cigarettes? How many for other products? What

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Practice in Consumer Law

percentage of the outdoor ads you see are for alcohol and tobacco?

3.How many billboards are located in inappropriate locations, such as near schools, churches, homes, or parks?

4.What is the character of the neighborhood around your school and home? Compare your answers with those of other students. Are there any differences in the number of outdoor ads among different types of neighborhoods? (Note: If you don’t see any outdoor advertising at all, it is probably because your city or town has an ordinance prohibiting this form of advertising.)

Problem–solving:

Study ads that appear in your local newspaper. Bring in three examples of puffing. For each, explain why the ad is not illegal, even though it may not be literally true.

Match the words on the left with the correct definition on the right:

Ad	influence.
Amend-	get rid of.
ment
Prohibit	make effective.
Eliminate	advertisement.
Restrict	an investigation or analysis of a market.
Beneficial	change proposed or made to a rule, regulation, etc.
Enforce	a telegram delivered by the postal service with the
	regular mail.
Survey	helpful.
Mailgram	limit.
Impact	forbid.

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