Consumer law, also termed consumer protection law, revolves around the state and federal laws and agency regulations established to protect the common consumer from inferior, hazardous and/or deceptively marketed products and services, as well as fraudulent or deceptive sales and promotional practices. Both Congress and state legislatures have passed consumer protection laws tailored to limit conflict in common law that would otherwise let the buyer beware.
Federal and state statutory laws govern consumer protection issues, such as credit transactions, inferior, adulterated, hazardous or deceptively advertised products, and deceptive or fraudulent sales practices. Federal statutes and regulations govern mail fraud, wholesome poultry and meat, misbranding and adulteration of food and cosmetics, truth in lending, false advertising, the soundness of banks, securities sales, standards of housing materials, flammable fabrics, and various business practices.
Congress passed the Consumer Protection Act in part to regulate the consumer credit industry. Credit card companies and credit reporting agencies are governed by the Act, as well as certain debt collectors. It requires creditors to disclose credit terms to consumers. The Consumer Protection Act also protects consumers from loan sharks, restricts the garnishing of wages, and established the National Commission on Consumer Finance to investigate the consumer finance industry. The Act also prohibits discrimination based on sex or marital status in the extending of credit.
The Magnuson-Moss Act (1973) sets minimum standards for product warranties, makes a company that financed the sale responsible for product defects, and creates liability for “implied” warranties (when the circumstances show that a warranty of the product was intended) as well as express (stated) warranties. Some states’ laws regulate door-to-door sales, false labeling, unsolicited merchandise, abusive collection practices, misleading advertising and referral and promotional sales.